BILL ANALYSIS
SENATE COMMITTEE ON PUBLIC SAFETY
Senator Mark Leno, Chair S
2009-2010 Regular Session B
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SB 1087 (Alquist) 7
As Introduced February 17, 2010
Hearing date: April 20, 2010
Penal Code
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IDENTITY THEFT: RESTITUTION
HISTORY
Source: San Francisco County District Attorney
Prior Legislation: SB 612 (Simitian) - Ch. 47, Stats. 2008
AB 1773 (Wayne) - Ch. 908, Stats. 2002
SB 1254 (Alpert) - Ch. 254, Stats. 2002
SB 245 (Wyland) - Ch. 478, Stats. 2001
SB 125 (Alpert) - Ch. 493, Stats. 2001
SB 168 (Bowen) - Ch. 720, Stats. 2001
AB 1897 (Davis) - Ch. 956, Stats. 2000
AB 1862 (Torlakson) - Ch. 632, Stats. 2000
AB 156 (Murray) - Ch. 768, Stats. 1997
Support: San Bernardino County Sheriff's Department
Opposition:Taxpayers for Improving Public Safety; California
Public Defenders Association
KEY ISSUE
IN AN IDENTITY THEFT CASE, SHOULD RESTITUTION INCLUDE EXPENSES FOR A
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PERIOD OF THREE YEARS FOR REPAIR OF A VICTIM'S CREDIT AND MONITORING
OF THE VICTIM'S CREDIT REPORT?
PURPOSE
The purpose of this bill is to specifically provide that
restitution in an identity theft case shall include, for three
years, the cost of repairing the victim's credit and monitoring
the victim's credit report.
Identity Theft and Related Statutes
Existing law provides that any person who falsely personates
another person in his or her private or official capacity is
guilty of an alternate felony-misdemeanor. False personation
generally involves subjecting the person whose identity was
assumed to prosecution, suit or to pay a debt. (Pen. Code
529.)
Existing law provides that it is an alternative
felony-misdemeanor for a person to willfully obtain the personal
identifying information of another person and to use such
information to obtain, or attempt to obtain, credit, goods, or
services in the name of the other person without consent. (Pen.
Code 530.5, subd. (a).)
Existing law defines "personal identifying information" to mean
name, address, mother's maiden name, place of employment, date
of birth, unique biometric data including fingerprint, facial
scan identifiers, voiceprint, retina or iris image, or other
unique physical representation, unique electronic data including
information identification number assigned to the person,
address or routing code, telecommunication identifying
information or access device, information contained in a birth
or death certificate, following identifying numbers: telephone,
health insurance, credit card, taxpayer identification, school
identification, state or federal driver's license, state or
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federal identification number, social security, employee
identification number, professional or occupational, demand
deposit account, savings account, checking account, PIN or
password, alien registration, government passport, or any form
of identification that is equivalent to those listed above.
(Pen. Code 530.55.)
Existing law provides that every person who, with the intent
to defraud, acquires or retains possession of the personal
identifying information of another person, and who has
previously been convicted of a violation of provisions
proscribing identity theft, or who, with the intent to
defraud, acquires or retains possession of the personal
identifying information of 10 or more other persons, shall be
punished by a fine, by imprisonment in a county jail not to
exceed one year, or by both a fine and imprisonment, or by
imprisonment in the state prison. (Pen. Code 530.5, subd.
(b)(3).)
Existing law provides that any person who, with intent to
defraud, sells, transfers, or conveys the personal identifying
information of another person shall be punished by a fine, by
imprisonment in a county jail not to exceed one year, or by both
a fine and imprisonment, or by imprisonment in the state prison.
Further, any person who, with actual knowledge that the
personal identifying information of a specific person will be
used in violation of identity theft provisions who sells,
transfers, or conveys that personal identifying information
shall be punished by a fine or by both a fine and imprisonment,
or by imprisonment in the state prison. (Pen. Code 530.5,
subd. (d).)
Existing law provides that a person who believes that he or she
is the victim of identity theft may initiate an investigation of
the matter by contacting the law enforcement agency with
jurisdiction over the person's residence or place of business.
The victim may then obtain information from various financial
entities concerning the suspected identity theft incident and
may further investigate the matter, as specified. The victim
may petition a court for an expedited determination of his or
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her factual innocence concerning misuse of his or her
identifying information. (Pen. Code 530.6.)
Restitution and Related Statutes
The California Constitution provides that all persons who suffer
losses as a result of criminal activity shall have the right to
restitution from the perpetrators of these crimes. Restitution
shall be ordered in every case unless compelling and
extraordinary reasons exist to the contrary. The Legislature
shall adopt provisions to implement this section during the
calendar year following adoption of this section. (Ca. Const.
Art. 1 28(b).)
Existing law states legislative intent that a victim of crime
who incurs any economic loss as a result of the commission of a
crime shall receive restitution directly from any defendant
convicted of that crime. (Pen. Code 1202.4, subd. (a)(1).)
Existing law directs the court to order full restitution for the
losses caused by the defendant's crime unless the court finds
and states compelling and extraordinary reasons for not doing
so. (Pen. Code 1202.4, subd. (f).)
Existing law provides that "when the economic losses of a victim
cannot be ascertained at the time of sentencing pursuant to
subdivision (f) of Section 1202.4, the court shall retain
jurisdiction over a person subject to a restitution order for
purposes of imposing or modifying restitution until such time as
the losses may be determined. Nothing in this section shall be
construed as prohibiting a victim, the district attorney, or a
court on its own motion from requesting correction, at any time,
of a sentence when the sentence is invalid due to the omission
of a restitution order or fine without a finding of compelling
and extraordinary reasons pursuant to Section 1202.4." (Pen.
Code 1202.46, subd. (f).)
Existing decisional law provides that restitution must be
determined from the losses actually caused by the defendant's
crime. (People v. Lyon (1996) 49 Cal.App.4th 1521.) With the
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exception of lewd conduct cases, compensable losses are limited
to economic losses. (People v. Giordano (2007) 42 Cal.4th 644.
Existing decisional law provides in broadest terms that the
restitution "ensures that amends . . . be made to society for the
breach of the law, enables people who suffer loss as a result of
criminal activity [to] be compensated for those losses, and acts
as a deterrent to future criminality . . . and to rehabilitate
the criminal." (People v. Crow (1993) 6 Cal.4th 952, 958,
internal quotation marks omitted.) Restitution orders in
probation cases can be somewhat broader than in cases where
probation is denied. (People v. Giordano, supra, 2007) 42
Cal.4th 644, 653; Pen. Code 1203.1.)
Existing law provides in every case where a person is convicted
of a crime, the court shall impose a separate and additional
restitution fine unless the court finds compelling and
extraordinary reasons for not doing so and states those reasons
on the record. The restitution fine for a misdemeanor shall be
no less than $100 and no more than $1,000. The restitution fine
for a felony shall be no less than $200 and no more than
$10,000. Where a defendant is committed to prison, the court
may set the restitution fine as the product of the number of
years of imprisonment and $200. Restitution fines are not
subject to penalty assessments. (Pen. Code 1202.4, subd.
(b).)
Existing law provides that where a defendant is committed
to prison and subject to parole, the court shall impose a
separate parole restitution fine in the same amount as the
restitution fine itself. The parole restitution fine shall
be suspended until and unless the defendant's parole is
revoked. (Pen. Code 1202.45.)
Existing law provides that restitution orders are enforceable as
a civil judgment - to ensure that a victim of a crime who incurs
any economic loss shall receive restitution directly from any
defendant convicted of that crime. If a restitution order is
made, the defendant has the right to a hearing before the court
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to dispute the determination of the amount of the order. A
restitution order may be modified upon motion of the district
attorney, the victim or victims, or the defendant. (Pen. Code
1202.4, subds. (f) and (i).)<1>
Existing law provides that if the amount of restitution
cannot be determined at the time of sentencing, the order
shall state that the specific amount of restitution shall be
"determined at the direction of the court" in a reasonable
manner in the discretion of the court. (Pen. Code 1202.4,
subd. (f).)
Existing law provides that a restitution order shall be prepared
by the court and identify each victim and each loss. (Pen. Code
1202.4, subd. (f)(3).)
This Bill - Restitution to Repair Credit and Monitor Credit
Reports
This bill provides that restitution shall include "expenses for
a period of three years, for the costs to monitor the credit
report of, and for the costs to repair the credit of, a victim
of identity theft, as defined in Section 530.5."
RECEIVERSHIP/OVERCROWDING CRISIS AGGRAVATION
The severe prison overcrowding problem California has
experienced for the last several years has not been solved. In
December of 2006 plaintiffs in two federal lawsuits against the
Department of Corrections and Rehabilitation sought a
court-ordered limit on the prison population pursuant to the
federal Prison Litigation Reform Act. On January 12, 2010, a
federal three-judge panel issued an order requiring the state to
reduce its inmate population to 137.5 percent of design capacity
-- a reduction of roughly 40,000 inmates -- within two years.
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<1> Penal Code 1202.4 (f)(2) further specifies that a
restitution order may also be paid directly to the Restitution
Fund to the extent that the victim has received assistance from
the Victims of Crime Program.
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In a prior, related 184-page Opinion and Order dated August 4,
2009, that court stated in part:
"California's correctional system is in a tailspin,"
the state's independent oversight agency has reported.
. . . (Jan. 2007 Little Hoover Commission Report,
"Solving California's Corrections Crisis: Time Is
Running Out"). Tough-on-crime politics have increased
the population of California's prisons dramatically
while making necessary reforms impossible. . . . As a
result, the state's prisons have become places "of
extreme peril to the safety of persons" they house . .
. (Governor Schwarzenegger's Oct. 4, 2006 Prison
Overcrowding State of Emergency Declaration), while
contributing little to the safety of California's
residents . . . California "spends more on
corrections than most countries in the world," but the
state "reaps fewer public safety benefits." . . . .
Although California's existing prison system serves
neither the public nor the inmates well, the state has
for years been unable or unwilling to implement the
reforms necessary to reverse its continuing
deterioration. (Some citations omitted.)
. . .
The massive 750% increase in the California prison
population since the mid-1970s is the result of
political decisions made over three decades, including
the shift to inflexible determinate sentencing and the
passage of harsh mandatory minimum and three-strikes
laws, as well as the state's counterproductive parole
system. Unfortunately, as California's prison
population has grown, California's political
decision-makers have failed to provide the resources
and facilities required to meet the additional need
for space and for other necessities of prison
existence. Likewise, although state-appointed experts
have repeatedly provided numerous methods by which the
state could safely reduce its prison population, their
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recommendations have been ignored, underfunded, or
postponed indefinitely. The convergence of
tough-on-crime policies and an unwillingness to expend
the necessary funds to support the population growth
has brought California's prisons to the breaking
point. The state of emergency declared by Governor
Schwarzenegger almost three years ago continues to
this day, California's prisons remain severely
overcrowded, and inmates in the California prison
system continue to languish without constitutionally
adequate medical and mental health care.<2>
The court stayed implementation of its January 12, 2010 ruling
pending the state's appeal of the decision to the U.S. Supreme
Court. That appeal, and the final outcome of this litigation,
is not anticipated until later this year or 2011.
This bill does not appear to aggravate the prison overcrowding
crisis described above.
COMMENTS
1. Need for This Bill
According to the author
Every year an ever-growing number of Californians
become victims of identity theft. With changes in
technology, increasing amounts of personal identifying
information available electronically, and a souring
economy, identity theft is becoming a much more
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<2> Three Judge Court Opinion and Order, Coleman v.
Schwarzenegger, Plata v. Schwarzenegger, in the United States
District Courts for the Eastern District of California and the
Northern District of California United States District Court
composed of three judges pursuant to Section 2284, Title 28
United States Code (August 4, 2009).
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lucrative and sophisticated crime. The result is not
only more victims, but deeper and more extensive
victimization.
It is increasingly common for victims of identity
theft to suffer for years after the crime initially
occurs. Victims' personal identifying information is
getting distributed for use among many identity
thieves. Even when an identity theft defendant is
prosecuted, the victimization does not necessarily
end. Today, victims must monitor and repair their
credit for years after the crime occurred.
Victims deserve to have a specific right to
restitution for credit monitoring and repair for long
after the crime occurred. Credit repair costs and
three years of credit monitoring should be mandated as
part of restitution to all identity theft victims.
2. Background on Statutory Restitution
California law directs a court to determine a victim's losses
from a crime and to order the perpetrator to pay restitution.
(Pen. Code 1202.4.) Typically, the court directs the
probation office to determine the amount of restitution. The
amount of restitution often may not have been determined by the
date the defendant is sentenced. That amount will be determined
at a later time and ordered by the court. The defendant may
challenge the amount of restitution determined by the probation
officer. Upon such challenge, the court shall hold a hearing on
the issue. Further, under existing law, when a defendant is
committed to CDCR, the probation department must send a report
to CDCR of the circumstances of the crime and the defendant's
criminal record and social history. (Pen. Code 1203c.)
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3. Problems Encountered by Victims Led to Enactment of the
Identity Theft Crime in Penal Code Section 530.5
In recent decades, identity theft has become a growing and
daunting crime problem. Traditional investigative techniques
did not work well to combat identity theft, a crime that was
often committed by unseen, electronic means. In 1997,
California was one of the first states to create a crime
specifically described as identity theft in Penal Code section
530.5.<3> Prior to that time, law enforcement agencies
generally considered the defrauded business entity that was
defrauded to be the victim of identity theft, not the
person whose identity was stolen so that the fraud could be
committed, although applicable statutes described a person whose
identity was misused as a crime victim. However, advocates
believed that the person who was the actual victim often found
himself or herself given no respect or standing in repairing the
damage done by the crime.
It would appear that the greatest value in the current identity
theft statutes is to allow a victim to clear his or her name.
Penal Code section 530.6 allows an identity theft victim to
require the police to investigate an identity theft report and
further allows the victim to use the report to obtain a court
order declaring that he or she did not commit certain crimes or
accumulate certain debts. Pursuant to this judicial procedure,
a person may be listed in a database of identity theft victims
maintained by the Department of Justice.
One of the most daunting and frustrating problems encountered by
identify theft victims is the damage to one's credit. As the
current recession, particularly the crash of the real estate
market demonstrates, good credit is essential to financial
stability. An identity theft victim may well face months of
work and substantial expense repairing his or credit. Companies
marketing credit repair services. Credit card companies compete
for business, in part, by including credit monitoring and repair
in a credit account.
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<3> AB 156 (Murray) Ch. 768, Stats. 1997
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4. Issues Raised by Calculating the Restitution over a Period of
Three Years' Time
This bill provides that a court shall grant restitution for a
period of three years for repairing an identity theft victim's
credit and monitoring his or her credit report. The statutory
requirement that restitution shall make a victim whole could not
be achieved in identity theft cases if restitution for credit
repair and monitoring were limited to short periods of time.
Credit problems can often arise throughout a three-year period
and even well-beyond that time.
Credit problems may only arise when a person seeks a loan to
purchase a house or vehicle, long after the person's identifying
information was used. Perhaps the bill should simply provide
that restitution in an identity theft case shall include the
cost of credit repair and monitoring. Courts still must make
reasonable restitution orders. Convicted defendants may
challenge the orders.
Existing law recognizes that courts may find it difficult to
adequately compensate a victim as of the date of sentencing.
Penal Code Section 1204.46 explicitly provides that where the
specific amount or restitution cannot be determined on the date
of sentencing, the court retains jurisdiction to determine
restitution at a later date. Restitution can even be determined
after a defendant has served his or her sentence. (People v.
Buford (2007) 146 Cal.App.4th 966.)
Nevertheless, the court in many cases could reasonably determine
at the time of sentencing the cost to monitor and repair credit
for a three-year period. Sentencing may not take place for
months or even years after the date of the crime. If the victim
can demonstrate the cost to repair or monitor credit over the
time prior to sentence, the court could calculate the cost for a
period of three years. Restitution for loss of income for sales
commissions can serve as an example. Courts are directed to
determine loss of commission income as follows: "Commission
income shall be established by evidence of commission income
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during the 12-month period prior to the date of the crime ?
unless good cause for a shorter period is shown." (Pen. Code
1202.4, subd. (f)(3)(A).) Similar methods could be used to
determine the costs of credit repair and monitoring.
DO IDENTITY THEFT VICTIMS SUFFER COSTLY, FRUSTRATING AND
TIME-CONSUMING DAMAGE TO THEIR CREDIT STATUS?
SHOULD RESTITUTION IN AN IDENTITY THEFT CASE INCLUDE THE COSTS
FOR THREE YEARS OF CREDIT REPAIR AND MONITORING CREDIT REPORTS
BE INCLUDED IN RESTITUTION IN AN IDENTITY THEFT CASE?
SHOULD THE BILL PERHAPS BE AMENDED TO ELIMINATE A REFERENCE TO A
SPECIFIC TIME PERIOD FOR WHICH A VICTIM MAY RECEIVE RESTITUTION
FOR THE EXPENSES OF CREDIT REPAIR AND MONITORING?
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