BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | AB 2721| |Office of Senate Floor Analyses | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- CONSENT Bill No: AB 2721 Author: Rodriguez (D) Introduced:2/19/16 Vote: 21 SENATE PUBLIC SAFETY COMMITTEE: 7-0, 6/14/16 AYES: Hancock, Anderson, Glazer, Leno, Liu, Monning, Stone SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8 ASSEMBLY FLOOR: 78-0, 5/12/16 (Consent) - See last page for vote SUBJECT: Elder and dependent adult fraud: informational notice SOURCE: Author DIGEST: This bill requires the Department of Justice to develop and distribute an informational notice that warns the public about elder and dependent adult fraud and provides information regarding how and where to file complaints. ANALYSIS: Existing law: 1)Defines "elder" as "any person who is 65 years of age or older." (Penal Code § 368, subd. (g).) 2)States that upon conviction of any felony it shall be considered a circumstance in aggravation in imposing the upper term if the victim of an offense is particularly vulnerable, or unable to defend himself or herself, due to age or AB 2721 Page 2 significant disability. (Penal Code § 1170.85, subd. (b).) 3)Specifies that any person who is not a caretaker who violates any provision of law proscribing theft, embezzlement, forgery, fraud, or identity theft, with respect to the property or personal identifying information of an elder or a dependent adult, and who knows or reasonably should know that the victim is an elder or a dependent adult, is punishable as follows: a) By a fine not exceeding $2,500, or by imprisonment in a county jail not exceeding one year, or by both that fine and imprisonment, or by a fine not exceeding $10,000, or by imprisonment in the county jail for two, three, or four years, or by both that fine and imprisonment, when the moneys, labor, goods, services, or real or personal property taken or obtained is of a value exceeding $950; or b) By a fine not exceeding $1,000, by imprisonment in a county jail not exceeding one year, or by both that fine and imprisonment, when the moneys, labor, goods, services, or real or personal property taken or obtained is of a value not exceeding $950. (Penal Code § 368, subd. (d).) 4)Provides that any caretaker of an elder or a dependent adult who violates any provision of law proscribing theft, embezzlement, forgery, fraud, or identity theft, with respect to the property or personal identifying information of that elder or dependent adult, is punishable as follows: a) By a fine not exceeding $2,500, or by imprisonment in a county jail not exceeding one year, or by both that fine and imprisonment, or by a fine not exceeding $10,000, or by imprisonment in the county jail for two, three, or four years, or by both that fine and imprisonment, when the moneys, labor, goods, services, or real or personal property taken or obtained is of a value exceeding $950; or b) By a fine not exceeding $1,000, by imprisonment in a county jail not exceeding one year, or by both that fine and imprisonment, when the moneys, labor, goods, services, or real or personal property taken or obtained is of a AB 2721 Page 3 value not exceeding $950. (Penal Code § 368, subd. (e).) This bill requires the Department of Justice (DOJ) to develop and distribute an informational notice that warns the public about elder and dependent adult fraud and provides information regarding how and where to file complaints, and requires the notice to be made available on the Internet Web site of the Attorney General. Background Over 44 million Americans, or nearly one in four seniors, are victims of elder abuse each year with a substantial proportion of it being financial abuse. The senior population loses a combined total of over $36 billion every year due to fraud and financial abuse (https://www.truelinkfinancial.com/research). Every 10 seconds a senior in California is a victim of financial abuse, and over $4.8 billion in assets are at stake every year in California. There are more residents over 65 in California than in any other state, and the state's elderly population will almost double within the next 20 years from 3.7 million to more than 6.4 million according to the U.S. Census Bureau (http://www.cwda.org/publication/anna-and-joe-importance-adult-pr otective-services-fight-against-elder-financial-abuse). Financial abuse is often committed by serial abusers who will come back again for money. For example, a senior who loses $20 due to financial exploitation will go on to lose an average of $2,000 to other scams in the course of five years (http://www.forbes.com/sites/johnwasik/2016/05/04/how-to-beat-the -elder-financial-abuse-epidemic/#52e3645c72ea). The typical profile of perpetrators is likely to be individuals who are between 40 and 59 years old with females being just as likely as males to be the perpetrator. The vast majority of perpetrators have a close relationship to victim, such as a caregiver, family member or friend where approximately two-thirds are family members of the victim, but these crimes also come from random individuals posing as sweepstakes, lottery or IRS representatives alongside romantic, healthcare, or magazine claims, among other scams. The Federal Trade Commission says that fraud complaints to its AB 2721 Page 4 offices by individuals 60 and older have risen at least 47 percent between 2012 and 2014, but it is difficult to know the actual amount of elderly fraud cases. (http://www.consumerreports.org/cro/consumer-protection/preventin g-elder-abuse) Seniors are often deeply ashamed and humiliated after they have figured out that they have been scammed and consequently fail to report the crime or tell family members that they have been victims of elderly financial abuse. Research confirms that in New York State, only 1 in 44 cases of elderly financial abuse were actually reported. In California specifically, 1 in 100 incidents of elder financial abuse is actually reported (http://www.cwda.org/publication/anna-and-joe-importance-adult-pr otective-services-fight-against-elder-financial-abuse). A sample voicemail left by a fraudster goes as follows: This is the Internal Revenue Service and this call is for you. The issue is extremely time sensitive. As soon as you receive this message, I need you to leave your work aside and dial the following number?this is Officer John Smith and I am working with the IRS. If you or your lawyer fails to return the call, then the only thing I can do is wish you good luck as this situation unfolds on you. Goodbye. Legislative history and Intent of Elder Abuse Elder abuse was identified as a discrete crime in 1986 and abuse of a dependent person was in 1984. Although the statute has been renumbered, the language originally stated: Any person, who, under circumstances or conditions likely to produce great bodily harm or death, willfully causes or permits any elder or dependent adult, with knowledge that he or she is an elder or dependent adult, willfully causes or permits the person or health of the elder or dependent adult to be placed in a situation in which his or her person or health is endangered is punishable by imprisonment in the county jail not exceeding one year or in state prison for two, three or four years. [Original AB 2721 Page 5 Penal Code § 368, subd. (a) as cited in People vs. Heitzman (1994) 9 Cal.4th 189, 194] In 1994, the California Supreme Court construed Penal Code Section 368 as requiring a tort grounded duty of care to save the statute from being unconstitutionally vague. The Court in Heitzman stated: In 1983, the Legislature passed the state's first law focusing exclusively on those 65 years of age or older, requiring elder care custodians and other specified professionals to report instances of elder abuse. (Welfare & Institutions Code, § 9380- 9386, added by Stats. 1983, ch. 1273, § 2 and repealed by Stats. 1986, ch. 769, § 1.3, eff. Sept. 15, 1986.) That same year, Senate Bill No. 248, 1983-1984 Regular Session, was introduced at the request of the Santa Ana Police Department. An analysis of the bill prepared for the Senate Committee on the Judiciary indicates that the goal of the legislation was to aid in the prosecution of people who harm or neglect dependent adults. (Senate Committee on Judiciary, Analysis of Senate. Bill No. 248 (1983-1984 Reg. Sess.) p. 2.) According to this document, law enforcement agencies receiving reports concerning suspected abuse or neglect of dependent adults were having difficulty finding Penal Code sections under which they could prosecute such cases. (Ibid.) The solution proposed by the bill was to establish the same criminal penalties for the abuse of a dependent adult as those found in sections 273a and 273d for child abuse. (Sen. Com. on Judiciary, Analysis of Sen. Bill No. 248.) When drafting the new legislation, the bill's author lifted the language of the child abuse statutes in its entirety, replacing the word 'child' with 'dependent adult' throughout (internal citation omitted). After the statute was enacted late in 1983, several non-substantive changes were made. (Stats. 1984, ch. 144, § 160, p. 482.) Later, in conjunction with legislation designed to consolidate the two sets of conflicting reporting laws for elder abuse and dependent adult abuse, a 1986 amendment to section 368(a) made the AB 2721 Page 6 section expressly applicable to elders as well as dependent adults. (Stats. 1986, ch. 769, § 1.2, p. 2531, urgency measure eff. Sept. 15, 1986.) [Heitzman id at 245.] In 2004, AB 3095 (Committee on Aging and Long Term Care, Chapter 893, Statutes of 2004), related to conditions of probation when an offender is guilty of the crime of elder abuse, as specified. However, the Senate amended AB 3095 to strike "with knowledge that he or she is an elder or dependent adult" and instead included any person who "knows or reasonably should know that a person is an elder or dependent adult." This language is presumably broader than simple knowledge because it includes persons who reasonably should have known of the victim's status as an elderly or dependent person. FISCAL EFFECT: Appropriation: No Fiscal Com.:YesLocal: No SUPPORT: (Verified6/27/16) None received OPPOSITION: (Verified6/27/16) None received ASSEMBLY FLOOR: 78-0, 5/12/16 AYES: Achadjian, Alejo, Travis Allen, Arambula, Atkins, Baker, Bigelow, Bloom, Bonilla, Bonta, Brough, Brown, Calderon, Campos, Chang, Chau, Chávez, Chiu, Chu, Cooley, Cooper, Dababneh, Dahle, Daly, Dodd, Eggman, Frazier, Beth Gaines, Gallagher, Cristina Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray, Grove, Hadley, Harper, Roger Hernández, Holden, Irwin, Jones, Kim, Lackey, Levine, Linder, Lopez, Low, Maienschein, Mathis, Mayes, McCarty, Medina, AB 2721 Page 7 Melendez, Mullin, Nazarian, Obernolte, O'Donnell, Olsen, Patterson, Quirk, Ridley-Thomas, Rodriguez, Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting, Wagner, Waldron, Weber, Wilk, Williams, Wood, Rendon NO VOTE RECORDED: Burke, Jones-Sawyer Prepared by:Molly Lao / PUB. S. / 6/29/16 15:50:52 **** END ****