BILL ANALYSIS Ó
AB 1395
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ASSEMBLY THIRD READING
AB
1395 (Salas)
As Amended January 4, 2016
Majority vote
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|Committee |Votes|Ayes |Noes |
| | | | |
| | | | |
| | | | |
|----------------+-----+----------------------+--------------------|
|Public Safety |4-1 |Quirk, Jones-Sawyer, |Melendez |
| | |Low, Santiago | |
| | | | |
|----------------+-----+----------------------+--------------------|
|Appropriations |16-0 |Gomez, Bigelow, | |
| | |Bloom, Bonilla, | |
| | |Bonta, Calderon, | |
| | |Chang, Daly, Eggman, | |
| | |Gallagher, Eduardo | |
| | |Garcia, Holden, | |
| | |Jones, Quirk, Weber, | |
| | |Wood | |
| | | | |
| | | | |
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SUMMARY: Adds to the list of crimes for which a person can be
prosecuted for money laundering. Specifically, this bill
expands the definition of "criminal activity" to include
AB 1395
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misdemeanor gambling violations for purposes of money
laundering.
EXISTING LAW:
1)States that any person who conducts or attempts to conduct a
transaction within a seven-day period involving a monetary
instrument or instruments of a total value exceeding $5,000,
or a total value exceeding $25,000 within a 30-day period,
through one or more financial institutions with the specific
intent to promote, manage, establish, carry on, or facilitate
the promotion, management, establishment, or carrying on of
any criminal activity, or knowing that the monetary instrument
represents the proceeds of, or is derived directly or
indirectly from the proceeds of, criminal activity, as
defined, is guilty of the crime of money laundering.
2)Defines "criminal activity" for purposes of money laundering
to mean a criminal offense punishable under the laws of this
state by death, imprisonment in the state prison, or
imprisonment in a county-jail-eligible felony or from a
criminal offense committed in another jurisdiction punishable
under the laws of that jurisdiction by death or imprisonment
for a term exceeding one year.
3)Provides that a person convicted of money laundering may be
punished by imprisonment in county jail for either a
misdemeanor with a maximum of one year or a felony and by a
fine of not more than $250,000 or twice the value of the
property transacted, whichever is greater. On a second or
subsequent conviction, the maximum fine that may be imposed is
$500,000 or five times the value of the property transacted,
whichever is greater.
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4)Enhances the penalty of a person convicted of money laundering
as follows:
a) A mandatory additional term of one year to be served
consecutive to the punishment if the value of the
transaction or transactions exceeds $50,000 but is less
than $150,000;
b) A mandatory additional term of two years to be served
consecutive to the punishment if the value of the
transaction or transactions exceeds $150,000 but is less
than $1,000,000;
c) A mandatory additional term of three years to be served
consecutive to the punishment if the value of the
transaction or transactions exceeds $1,000,000 but is less
than $2,500,000; or
d) A mandatory additional term of four years to be served
consecutive to the punishment if the value of the
transaction or transactions exceeds $2,500,000.
5)Prohibits lotteries, with exceptions for the California State
Lottery, bingo for charitable purposes, and charitable raffles
conducted by a non-profit, tax-exempt organization, and makes
the violation of those crimes punishable as a misdemeanor.
6)Defines a "lottery" as any scheme for the disposal or
distribution of property by chance, among persons who have
paid or promised to pay any valuable consideration for the
chance of obtaining such property or a portion of it, or for
any share or any interest in such property, upon agreement,
understanding or expectation that it is to be distributed or
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disposed of by lot or chance whether called a lottery, raffle,
or gift enterprise, or by whatever name the same may be known.
7)States that every person who deals, plays, or carries on,
opens, or causes to be opened, or who conducts either as owner
or employee, whether for hire or not, any game of faro, monte,
roulette, lansquenet, rouge et noire, rondo, tan, fan-tan,
seven-and-a-half, twenty-one, hokey-pokey, or any banking or
percentage game played with cards, dice, or any device, for
money, checks, credit, or other representative of value, and
every person who plays or bets at or against any of those
prohibited games is guilty of a misdemeanor punishable by a
fine not less than $1,000 or by imprisonment in the county
jail not exceeding six months, or by both the fine and
imprisonment.
FISCAL EFFECT: According to the Assembly Appropriations
Committee, moderate costs to the California Department of
Corrections and Rehabilitation (CDCR) of less than $150,000
(General Fund), if less than five persons are sentenced to
prison per a year, instead of county jail. According to CDCR,
the annual contracted bed rate is $27,000 per inmate.
Moderate nonreimbursable local costs for incarceration, offset
to a degree by fee revenue.
COMMENTS: According to the author, "In 2014, I authored
Assembly Bill (AB) 1439 [Chapter 592] to clarify that gambling
at sweepstakes cafes is illegal. Specifically, the bill made
internet gambling sweepstakes at these cafes an unfair business
practice and gave the Attorney General, district attorneys, and
city attorneys the authority to bring civil suit to subject
operators to civil penalties for violations.
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"On June 25, 2015 the California Supreme Court ruled in People
ex rel. v. Grewal that computerized sweepstakes found at
internet cafes are illegal under state gambling laws. In a
unanimous ruling, the court rejected arguments that the
sweepstakes are different from slot machines because they have
predetermined outcomes.
"Despite AB 1439 and the Grewal decision, new examples of
illegal gambling establishments have emerged. These operators
claim they are not offering gambling or sweepstakes, but rather
'social gaming and mining.' While the business model may have
changed, the underlying nature of the games these cafes are
offering has not.
"AB 1395 would provide law enforcement with the ability to use
criminal remedies when combatting egregious cases of organized,
illegal gambling. Specifically, the bill incorporates
violations of the gambling laws into organized crime and money
laundering statutes. This approach has been used successfully
in other states and will give law enforcement the right tools to
go after illegal gambling."
Analysis Prepared by:
Stella Choe / PUB. S. / (916) 319-3744 FN:
0002576
AB 1395
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