BILL ANALYSIS �
SENATE COMMITTEE ON PUBLIC SAFETY
Senator Loni Hancock, Chair S
2013-2014 Regular Session B
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SB 1233 (Wyland) 3
As Amended April 21, 2014
Hearing date: April 29, 2014
Penal Code
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FINANCIAL CRIMES AGAINST DEPENDENT ADULTS AND THE ELDERLY:
INCREASED FINES
HISTORY
Source: Author
Prior Legislation: SB 543 (Block) - Ch. 543, Stats. 203
AB 332 (Butler) - Ch. 366, Stats. 2011
AB 1424 (Davis) - Ch. 152, Stats. 2008
SB 1018 (Simitian) - Ch.140, Stats. 2005
AB 484 (Benoit) - held Assembly Appropriations,
2005
AB 916 (Canciamilla) - held Senate Appropriations,
2005
AB 2611 (Simitian) - Ch. 886, Stats. 2004
AB 2474 (Wolk) -not heard in the Senate Judiciary
Committee, 2004
AB 1131 (Jackson) - Ch. 543, Stats. 2003
AB 255 (Zettel) - Ch. 54, Stats. 2002
AB 2140 (Simitian) - Ch. 369, Stats. 2002
AB 2735 (Chan) - Ch. 552, Stats. 2002
AB 109 (Alquist) -held Senate Appropriations, 2001
AB 559 (Nakano) - Ch. 214, Stats. 2000
AB 2253 (Jackson) - died Assembly Inactive File,
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2000
SB 2199 (Lockyer) - Ch. 946, Stats. 1998
AB 880 (Hertzberg) - Ch. 934, Stats. 1998
AB 3988 (Papan) - Ch. 769, Stats. 1986
SB 248 (Carpenter) - Ch. 968, Stats.
1983
Support: California Commission on Aging
Opposition:California Attorneys for Criminal Justice
KEY ISSUE
SHOULD FINES FOR FINANCIAL OR RELATED CRIMES AGAINST A DEPENDENT
ADULT OR ELDERLY PERSON IN WHICH MORE THAN $950 WAS TAKEN BE RAISED
FROM $2,500 TO $25,000 FOR A MISDEMEANOR CONVICTION AND FROM $10,000
TO $250,000 FOR A FELONY?
PURPOSE
The purpose of this bill is to provide that where more than $950
was taken in a financial crime against a dependent adult or
elderly person, the maximum fine for defendants convicted of a
misdemeanor shall be $25,000 and $250,000 for those convicted of
a felony.
Existing law defines a "dependent adult" as any person who is
between the ages of 18 and 64, who has physical or mental
limitations which restrict his or her ability to carry out
normal activities or to protect his or her rights, including,
but not limited to, persons who have physical or developmental
disabilities or whose physical or mental abilities have
diminished because of age. (Pen. Code � 368(h).)
Existing law defines "elder" as any person who is 65 years of
age or older. (Pen. Code � 368, subd. (g).)
Existing law establishes fines and other punishment for theft,
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embezzlement, forgery, fraud, and identity theft against an
elder or dependent adult, as follows:
Where the defendant is not a caretaker and knows or
reasonably should know that the victim is an elder or a
dependent adult, and the value of the property, labor or
services does not exceed $950, the defendant may be punished
by a fine not exceeding $1,000, by imprisonment in a county
jail not exceeding one year, or both. (Pen. Code � 368
(d).)
Where the defendant is not a caretaker and knows or
reasonably should know that the victim is an elder or a
dependent adult, and the value of the property, labor or
services exceeds $950, the defendant may be punished by
imprisonment of up one year in a county jail and a fine of up
to $1,000, or by felony imprisonment 2, 3 or 4 years in state
prison or the county jail pursuant to Penal Code Section
1170, subdivision (h). (Pen. Code � 368 (d).)
Where the defendant is a caretaker and the value of the
property, labor or services does not exceed $950, the
defendant may be punished by a fine not exceeding $1,000,
imprisonment in a county jail not exceeding one year, or
both. (Pen. Code � 368 (e).)
A person who is a caretaker, and the value of the labor,
goods, services, funds, or real and/or personal property
taken exceeds $950 may be punished by up to one year in a
county jail or 2, 3 or 4 years in state prison. (Pen. Code
� 368(e).)
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 for
any unlawful purpose without consent (Pen. Code � 530.5, subd.
(a).)
Existing law includes numerous specific crimes involving
unauthorized use or possession of the personal identifying
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information of another. The crimes are misdemeanors or
alternate felony misdemeanors, depending on the fraudulent
intent of the defendant and the number of identity profiles
involved in the offense. (Pen. Code � 530.5, subds. (a)-(d).)
Existing law provides that an identity theft crime against an
elderly person or dependent adult may be prosecuted under Penal
Code Section 368, a section that imposes special penalties for
such crimes and authorizes specific counseling if probation is
granted to the defendant. When prosecuted under Section 368,
the maximum misdemeanor fine for identity theft - as defined in
Penal Code Section 530.5 - committed against an elderly person
or dependent adult is $2,500.<1> (Pen. Code � 368, subds.
(d)-(e).)
This bill raises the maximum misdemeanor fine from $2,500 to
$25,000 for a defendant convicted of a crime of theft, fraud or
identity theft involving a dependent adult or elderly person
This bill raises the maximum felony fine from $10,000 to
$250,000<2> for a defendant convicted of a crime of theft, fraud
or identity theft involving a dependent adult or elderly person.
RECEIVERSHIP/OVERCROWDING CRISIS AGGRAVATION
For the last several years, severe overcrowding in California's
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<1> The $2,500 maximum misdemeanor fine applies where the value
of the property involved in the offense was $950 or more. In
other cases, the maximum fine is $1,000. (Pen. Code � 368,
subds. (d)-(e).)
<2> Because of the unusual construction of the section this bill
amends, it appears that the bill authorizes the court to impose
a misdemeanor fine of up to $250,000. That is, if a defendant
is convicted of an alternate felony-misdemeanor, imposition of a
fine alone makes the crime a misdemeanor. (Pen. Code � 17,
subd. (b)(1).) This bill separately describes the $250,000 fine,
such that the court could apparently impose for a misdemeanor
conviction.
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prisons has been the focus of evolving and expensive litigation
relating to conditions of confinement. On May 23, 2011, the
United States Supreme Court ordered California to reduce its
prison population to 137.5 percent of design capacity within two
years from the date of its ruling, subject to the right of the
state to seek modifications in appropriate circumstances.
Beginning in early 2007, Senate leadership initiated a policy to
hold legislative proposals which could further aggravate the
prison overcrowding crisis through new or expanded felony
prosecutions. Under the resulting policy, known as "ROCA"
(which stands for "Receivership/ Overcrowding Crisis
Aggravation"), the Committee held measures that created a new
felony, expanded the scope or penalty of an existing felony, or
otherwise increased the application of a felony in a manner
which could exacerbate the prison overcrowding crisis. Under
these principles, ROCA was applied as a content-neutral,
provisional measure necessary to ensure that the Legislature did
not erode progress towards reducing prison overcrowding by
passing legislation, which would increase the prison population.
In January of 2013, just over a year after the enactment of the
historic Public Safety Realignment Act of 2011, the State of
California filed court documents seeking to vacate or modify the
federal court order requiring the state to reduce its prison
population to 137.5 percent of design capacity. The State
submitted that the, ". . . population in the State's 33 prisons
has been reduced by over 24,000 inmates since October 2011 when
public safety realignment went into effect, by more than 36,000
inmates compared to the 2008 population . . . , and by nearly
42,000 inmates since 2006 . . . ." Plaintiffs opposed the
state's motion, arguing that, "California prisons, which
currently average 150% of capacity, and reach as high as 185% of
capacity at one prison, continue to deliver health care that is
constitutionally deficient." In an order dated January 29,
2013, the federal court granted the state a six-month extension
to achieve the 137.5 % inmate population cap by December 31,
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2013.
The Three-Judge Court then ordered, on April 11, 2013, the state
of California to "immediately take all steps necessary to comply
with this Court's . . . Order . . . requiring defendants to
reduce overall prison population to 137.5% design capacity by
December 31, 2013." On September 16, 2013, the State asked the
Court to extend that deadline to December 31, 2016. In
response, the Court extended the deadline first to January 27,
2014 and then February 24, 2014, and ordered the parties to
enter into a meet-and-confer process to "explore how defendants
can comply with this Court's June 20, 2013 Order, including
means and dates by which such compliance can be expedited or
accomplished and how this Court can ensure a durable solution to
the prison crowding problem."
The parties were not able to reach an agreement during the
meet-and-confer process. As a result, the Court ordered
briefing on the State's requested extension and, on February 10,
2014, issued an order extending the deadline to reduce the
in-state adult institution population to 137.5% design capacity
to February 28, 2016. The order requires the state to meet the
following interim and final population reduction benchmarks:
143% of design bed capacity by June 30, 2014;
141.5% of design bed capacity by February 28, 2015; and
137.5% of design bed capacity by February 28, 2016.
If a benchmark is missed the Compliance Officer (a position
created by the February 10, 2016 order) can order the release of
inmates to bring the State into compliance with that benchmark.
In a status report to the Court dated February 18, 2014, the
state reported that as of February 12, 2014, California's 33
prisons were at 144.3 percent capacity, with 117,686 inmates.
8,768 inmates were housed in out-of-state facilities.
The ongoing prison overcrowding litigation indicates that prison
capacity and related issues concerning conditions of confinement
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remain unresolved. While real gains in reducing the prison
population have been made, even greater reductions may be
required to meet the orders of the federal court. Therefore,
the Committee's consideration of ROCA bills -bills that may
impact the prison population - will be informed by the following
questions:
Whether a measure erodes realignment and impacts the
prison population;
Whether a measure addresses a crime which is directly
dangerous to the physical safety of others for which there
is no other reasonably appropriate sanction;
Whether a bill corrects a constitutional infirmity or
legislative drafting error;
Whether a measure proposes penalties which are
proportionate, and cannot be achieved through any other
reasonably appropriate remedy; and,
Whether a bill addresses a major area of public safety
or criminal activity for which there is no other
reasonable, appropriate remedy.
COMMENTS
1. Need for This Bill
According to the author:
Elder financial abuse spans a broad spectrum of
conduct. Senior citizens are the most vulnerable
members of our society. Some examples include forging
an older person's signature, taking money or property,
telemarketing scams and coercion. They are often
preyed upon or taken advantage of. Exploiting the
elderly for financial gain cannot be tolerated. By
imposing a harsher fine on these abusers, SB 1233 will
deter future abuse of the elderly.
2. Mandatory Penalty Assessments Quadruple the Actual Amount of a
Criminal Fine
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Mandatory penalty assessments and fees - 310% as of April, 2013
- are assessed on the base fine for a crime. That is, the
actual amount the defendant must pay is 1) the base fine, and 2)
310% of the bases fine - four times the base fine. A maximum
fine of $250,000 imposed pursuant to this bill would actually
require a defendant to pay $1 million.
Penalty assessments generally have little or nothing to do with
the crime for which the fine-paying defendant was convicted.
Assuming a defendant was fined $10,000 as the maximum fine, the
following penalty assessments would be imposed pursuant to the
Penal Code and the California Government Code:
Base Fine:
$10,000
Penal Code 1464 assessment:
$10,000 ($10 for every $10)
Penal Code 1465.7 surcharge:
2,000 (20% surcharge)
Penal Code 1465.8 assessment:
40 ($40 fee per offense)
Government Code 70372 assessment:
5,000 ($5 for every $10)
Government Code 70373 assessment:
30 ($30 for felony or misd.)
Government Code 76000 assessment:
7,000 ($7 for every $10)
Government Code 76000.5 assessment:
2,000 ($2 for every $10)
Government Code 76104.6 assessment:
1,000 ($1 for every $10)
Government Code 76104.7 assessment
4,000 ($4 for every $10)
Total Fine with Assessments:
$41,070
Distribution of Penalty Assessments:
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State penalty of $10 for every $10. 70 % is transmitted
to the state and 30 percent remains with the county. The
state portion of penalty is distributed in specified
percentages among: the Fish and Game Preservation Fund
(0.33 percent); the Restitution Fund (32.02 percent); the
Peace Officers Training Fund (23.99 percent); the Driver
Training Penalty Assessment Fund (25.70 percent); the
Corrections Training Fund (7.88 percent); the Local Public
Prosecutors and Public Defenders Fund (0.78 percent, not to
exceed $850,000 per year); the Victim-Witness Assistance
Fund (8.64 percent); and the Traumatic Brain Injury Fund
(0.66 percent). (Penal Code � 1464.)
County penalty assessment of $7 for every $10 upon every
fine or penalty including all Vehicle Code offense and any
local ordinance adopted pursuant to the Vehicle Code except
parking offenses. The money collected shall be placed in
any of the following funds if established by a County Board
of Supervisors: Courthouse Construction Fund; a Criminal
Justice Facilities Construction Fund; Automated Fingerprint
Identification Fund; Emergency Medical Services Fund; DNA
Identification Fund. (Gov. Code � 76000 et seq.)
State surcharge of 20 % for deposit in the General Fund.
(Pen. Code � 1465.7.)
"State Court Facilities Construction Fund" - up to $5
for every $10. Each county determines the amount - for
local courthouse construction. (Gov. Code � 70372, 76100.)
$1 on every $10 for DNA databank implementation. (Gov.
Code � 76104.6.)
State-only penalty of $4 for every $10. (Gov. Code �
76104.7.)
$2 on every $10 to support emergency medical services.
(Gov. Code � 76000.5.)
$4 on every Vehicle Code violation or local ordinance
for the Emergency Medical Air Transportation Act Fund.
(Government Code � 76000.10.)
Flat fee of $40 to ensure adequate funding for court
security. (Penal Code � 1465.8.)
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3. Deterrence Value of Criminal Penalties
It appears that the major rationale for imposing very severe
fines on defendants convicted of financial abuse of an elderly
person is that such fines would deter potential perpetrators.
Criminologists generally accept the general deterrence of
criminal statutes - the tendency of people to avoid doing acts
that would subject them to criminal penalties. Criminologists
have, however, long been skeptical of the value of special
deterrence - deterring commission of a particular crime through
the specific penalty for that crime.<3> Research appears to
clearly establish that certainty of punishment is a much more
effective deterrent than the severity of punishment.<4>
Perpetrators of financial crimes against the elderly may be
particularly likely to believe that they will never be caught.
The perpetrator may control the victim's finances or believe
that the victim will be unaware of the crime. Perhaps most
important, it is unlikely that a potential perpetrator of
financial crimes against a dependent adult or elderly person
would be aware of the severe fines authorized pursuant to this
bill. The fines are not included in the statutes defining the
individual crimes - theft, fraud, forgery, embezzlement or
identity theft - but in a stand-alone section that authorizes
higher penalties and specific probation conditions where the
victim of one of the specified crimes is a dependent adult or
elderly person.
WOULD THE SEVERE PENALTIES IN THIS BILL DETER POTENTIAL
PERPETRATORS OF FINANCIAL CRIMES AGAINST DEPENDENT ADULTS AND
THE ELDERLY?
WOULD POTENTIAL PERPETRATORS BE AWARE OF THE SEVERE FINES THAT
COULD BE IMPOSED UNDER THIS BILL?
4. Restitution Issues in Cases of Financial Crimes Against
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<3> http://bjc.oxfordjournals.org/content/21/2/136.extract.
<4>
http://www.sentencingproject.org/doc/deterrence%20briefing%20.pdf
.
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Elderly and Dependent Adults
This bill authorizes a court to impose extremely high fines on
defendants convicted of financial abuse of a dependent adult or
elderly person. Arguably, however, the most important
consideration in a case of financial abuse of an elderly person
is the ability of the victim to obtain restitution. A criminal
fine is of no value to the victim.
Many elderly persons have fixed, minimal incomes. A loss of
income or assets can severely limit an elderly person's ability
to pay for basic needs, such as utilities and rent. Elderly
persons who are the victims of theft or fraud may have
difficulty dealing with the stress of victimization. Further,
recent research<5> has found that changes in the brains of the
elderly render them less able to recognize a fraudulent scheme
or scam. Also, a dependent adult who has a limited ability to
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<5> Why It's Easier to Scam the Elderly, NPR Morning Edition,
December 6, 2012:
http://www.npr.org/blogs/health/2012/12/06/166609270/why-its-easi
er-to-scam-the-elderly.
care for himself or herself, or who has an intellectual
disability, may also be especially vulnerable to perpetrators of
fraudulent schemes.
The California Constitution and relevant statutes provide that
all persons who suffer losses as a result of criminal activity
shall have the right to restitution from the perpetrators.
(Cal. Const. Art. 1 � 28(b); Pen. Code � 1202.4, subds. (a) and
(f).) Nevertheless, it is often difficult for elderly victims
to obtain restitution from perpetrators of financial crimes.
The stolen assets may have been dissipated well before
conviction and sentencing. While restitution has priority over
other fines, collection is often difficult, whether done by the
victim or a government entity on behalf of the victim. Although
a restitution order is collectible as though it were a civil
judgment, many judgments go unsatisfied.
The sheer complexity of the fine system and limited county
resources affects collection of all fines and fees.<6> Each
county has a victim-witness program, usually in the office of
the district attorney, that can direct victims to the agency
designated to collect restitution. Prosecutors are authorized
to help victims collect restitution, but they are not required
to do so. (Pen. Code �� 1202.4, subd. (h) and 1202.4, subd.
(g).) However, the agency designated to collect restitution
varies from county to county and typically has myriad additional
duties. Victims' names and addresses might be lost or not
entered into court records.<7> Representatives of victim
advocacy groups have noted that the restitution system is
disorganized, especially where the victim resides in one county
and the offender in another.
Because defendants are required to pay restitution as a
condition of probation, victims may receive partial restitution
over the perpetrator's term of probation. After probation ends,
the criminal court has no authority over the defendant. The
restitution is likely to essentially be just another judgment
against an impecunious former defendant.
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<6> https://www.library.ca.gov/crb/06/03/06-003.pdf.
<7> http://abclocal.go.com/kgo/story?id=9112950.
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WOULD REFORMS IN THE RESTITUTION SYSTEM BE MORE EFFECTIVE IN
HELPING ELDERLY VICTIMS OF FINANCIAL FRAUD THAN INCREASING THE
FINES ON PERPETRATORS?
5. Legislative Efforts to Authorize Victim Compensation for
Elderly Victims of Fraud
California law includes an extensive program for compensation
for victims of violent crime who did not receive restitution
from the perpetrators of the crime. Compensation is made from
the Victims of Crime Fund, administered by the Victims
Compensation and Government Claims Board (VCGCB - board). The
fund is largely funded by "restitution fines" that must be
imposed on every convicted defendant. The restitution fine for
a misdemeanor is $150 to $1,000 and $300 to $10,000 for a
felony. The board has been consistently concerned that the fund
is not funded well enough to compensate all eligible victims or
to expand the class of eligible victims.
Two recent bills have sought to allow elderly fraud victims to
obtain limited compensation from the Victims Compensation Fund.
SB 60 (Wright) Ch. 147, Stats. 2013, was originally drafted to
extend compensation to dependent adult and elderly victims of
financial abuse. The bill was amended to only extend
eligibility to victims of human trafficking.
SB 847 (Block), which passed this Committee 7-0, is set for
hearing in Senate Appropriations on April 28, 2014. SB 847
would allow elderly victims of financial abuse to obtain
reimbursement of up to $2,000 for financial and mental health
counseling. Two major issues have been raised regarding an
extension of compensation to elderly and dependent adult victims
of financial fraud. One concern is that compensation through
the fund has always been limited to victims of violent crimes
covered by the program. The second major concern is that the
fund is chronically low on reserves or heading toward a deficit.
While the compensation program has long been criticized for
overspending on administrative costs, it is clear that victims
could certainly benefit if the victims compensation program had
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more money and a steadier flow of receipts.
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