Amended in Senate June 21, 2016

Amended in Assembly January 4, 2016

California Legislature—2015–16 Regular Session

Assembly BillNo. 1395

Introduced by Assembly Member Salas

February 27, 2015

An act to amend Section 186.9 of the Penal Code, relating to money laundering.


AB 1395, as amended, Salas. Money laundering: criminal activity: lotteries and gaming.

Existing law makes it a felony or a misdemeanor to engage in money laundering, defined as conducting a transaction involving a monetary instrument of specified value through a financial institution with the specific intent to promote or facilitate criminal activity. Existing law defines criminal activity for these purposes as any criminal offense punishable as a felony.

This bill would expand the definition of criminal activity for purposes of money laundering to include various offenses punishable asbegin delete infractions andend delete misdemeanorsbegin insert that areend insert related to illegal lotteries and gaming. By expanding the definition of a crime,begin delete thisend deletebegin insert theend insert bill would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes.

The people of the State of California do enact as follows:

P2    1


Section 186.9 of the Penal Code is amended to



As used in this chapter:

4(a) “Conducts” includes, but is not limited to, initiating,
5concluding, or participating in conducting, initiating, or concluding
6a transaction.

7(b) “Financial institution” means, when located or doing
8business in this state, any national bank or banking association,
9state bank or banking association, commercial bank or trust
10company organized under the laws of the United States or any
11state, any private bank, industrial savings bank, savings bank or
12thrift institution, savings and loan association, or building and loan
13association organized under the laws of the United States or any
14state, any insured institution as defined in Section 401 of the
15National Housing Act (former 12 U.S.C. Sec. 1724(a)), any credit
16union organized under the laws of the United States or any state,
17any national banking association or corporation acting under
18Chapter 6 (commencing with Section 601) of Title 12 of the United
19States Code, any agency, agent or branch of a foreign bank, any
20currency dealer or exchange, any person or business engaged
21primarily in the cashing of checks, any person or business who
22regularly engages in the issuing, selling, or redeeming of traveler’s
23checks, money orders, or similar instruments, any broker or dealer
24in securities registered or required to be registered with the
25Securities and Exchange Commission under the Securities
26Exchange Act of 1934 or with the Commissioner of Corporations
27under Part 3 (commencing with Section 25200) of Division 1 of
28Title 4 of the Corporations Code, any licensed transmitter of funds
29or other person or business regularly engaged in transmitting funds
30to a foreign nation for others, any investment banker or investment
31company, any insurer, any dealer in gold, silver, or platinum bullion
32or coins, diamonds, emeralds, rubies, or sapphires, any pawnbroker,
33any telegraph company, any person or business regularly engaged
34in the delivery, transmittal, or holding of mail or packages, any
35person or business that conducts a transaction involving the transfer
P3    1of title to any real property, vehicle, vessel, or aircraft, any personal
2property broker, any person or business acting as a real property
3securities dealer within the meaning of Section 10237 of the
4Business and Professions Code, whether licensed to do so or not,
5any person or business acting within the meaning and scope of
6subdivisions (d) and (e) of Section 10131 and Section 10131.1 of
7the Business and Professions Code, whether licensed to do so or
8not, any person or business regularly engaged in gaming within
9the meaning and scope of Section 330, any person or business
10regularly engaged in pool selling or bookmaking within the
11meaning and scope of Section 337a, any person or business
12regularly engaged in horse racing whether licensed to do so or not
13under the Business and Professions Code, any person or business
14engaged in the operation of a gambling ship within the meaning
15and scope of Section 11317, any person or business engaged in
16controlled gambling within the meaning and scope of subdivision
17(f) of Section 19805 of the Business and Professions Code, whether
18registered to do so or not, and any person or business defined as
19a “bank,” “financial agency,” or “financial institution” by Section
205312 of Title 31 of the United States Code or Section 1010.100 of
21Title 31 of the Code of Federal Regulations and any successor
22provisions thereto.

23(c) “Transaction” includes the deposit, withdrawal, transfer,
24bailment, loan, pledge, payment, or exchange of currency, or a
25monetary instrument, as defined by subdivision (d), or the
26electronic, wire, magnetic, or manual transfer of funds between
27accounts by, through, or to, a financial institution as defined by
28subdivision (b).

29(d) “Monetary instrument” means United States currency and
30coin; the currency, coin, and foreign bank drafts of any foreign
31country; payment warrants issued by the United States, this state,
32or any city, county, or city and county of this state or any other
33political subdivision thereof; any bank check, cashier’s check,
34traveler’s check, or money order; any personal check, stock,
35investment security, or negotiable instrument in bearer form or
36otherwise in a form in which title thereto passes upon delivery;
37gold, silver, or platinum bullion or coins; and diamonds, emeralds,
38rubies, or sapphires. Except for foreign bank drafts and federal,
39state, county, or city warrants, “monetary instrument” does not
40include personal checks made payable to the order of a named
P4    1party which have not been endorsed or which bear restrictive
2endorsements, and also does not include personal checks which
3have been endorsed by the named party and deposited by the named
4party into the named party’s account with a financial institution.

5(e) “Criminal activity” means a criminal offense punishable
6under the laws of this state by death, imprisonment in the state
7prison, or imprisonment pursuant to subdivision (h) of Section
81170 or a criminal offense committed in another jurisdiction
9punishable under the laws of that jurisdiction by death or
10imprisonment for a term exceeding one year. “Criminal activity”
11also means a criminal offense specified inbegin delete Chapter 9 (commencing
12with Section 319) or Chapter 10 (commencing with Section 330)
13of Title 9.end delete
begin insert Section 321, 322, 323, 326, 330a, 330b, 330c, or 330.1.end insert

14(f) “Foreign bank draft” means a bank draft or check issued or
15made out by a foreign bank, savings and loan, casa de cambio,
16credit union, currency dealer or exchanger, check cashing business,
17money transmitter, insurance company, investment or private bank,
18or any other foreign financial institution that provides similar
19financial services, on an account in the name of the foreign bank
20or foreign financial institution held at a bank or other financial
21institution located in the United States or a territory of the United


SEC. 2.  

No reimbursement is required by this act pursuant to
24Section 6 of Article XIII B of the California Constitution because
25the only costs that may be incurred by a local agency or school
26district will be incurred because this act creates a new crime or
27infraction, eliminates a crime or infraction, or changes the penalty
28for a crime or infraction, within the meaning of Section 17556 of
29the Government Code, or changes the definition of a crime within
30the meaning of Section 6 of Article XIII B of the California