2009 California Penal Code - Section 186-186.8 :: Chapter 9. Criminal Profiteering

PENAL CODE
SECTION 186-186.8

186.  This act may be cited as the "California Control of Profits of
Organized Crime Act."

186.1.  The Legislature hereby finds and declares that an effective
means of punishing and deterring criminal activities of organized
crime is through the forfeiture of profits acquired and accumulated
as a result of such criminal activities. It is the intent of the
Legislature that the "California Control of Profits of Organized
Crime Act" be used by prosecutors to punish and deter only such
activities.

186.2.  For purposes of this chapter, the following definitions
apply:
   (a) "Criminal profiteering activity" means any act committed or
attempted or any threat made for financial gain or advantage, which
act or threat may be charged as a crime under any of the following
sections:
   (1) Arson, as defined in Section 451.
   (2) Bribery, as defined in Sections 67, 67.5, and 68.
   (3) Child pornography or exploitation, as defined in subdivision
(b) of Section 311.2, or Section 311.3 or 311.4, which may be
prosecuted as a felony.
   (4) Felonious assault, as defined in Section 245.
   (5) Embezzlement, as defined in Sections 424 and 503.
   (6) Extortion, as defined in Section 518.
   (7) Forgery, as defined in Section 470.
   (8) Gambling, as defined in Sections 337a to 337f, inclusive, and
Section 337i, except the activities of a person who participates
solely as an individual bettor.
   (9) Kidnapping, as defined in Section 207.
   (10) Mayhem, as defined in Section 203.
   (11) Murder, as defined in Section 187.
   (12) Pimping and pandering, as defined in Section 266.
   (13) Receiving stolen property, as defined in Section 496.
   (14) Robbery, as defined in Section 211.
   (15) Solicitation of crimes, as defined in Section 653f.
   (16) Grand theft, as defined in Section 487.
   (17) Trafficking in controlled substances, as defined in Sections
11351, 11352, and 11353 of the Health and Safety Code.
   (18) Violation of the laws governing corporate securities, as
defined in Section 25541 of the Corporations Code.
   (19) Any of the offenses contained in Chapter 7.5 (commencing with
Section 311) of Title 9, relating to obscene matter, or in Chapter
7.6 (commencing with Section 313) of Title 9, relating to harmful
matter that may be prosecuted as a felony.
   (20) Presentation of a false or fraudulent claim, as defined in
Section 550.
   (21) False or fraudulent activities, schemes, or artifices, as
described in Section 14107 of the Welfare and Institutions Code.
   (22) Money laundering, as defined in Section 186.10.
   (23) Offenses relating to the counterfeit of a registered mark, as
specified in Section 350.
   (24) Offenses relating to the unauthorized access to computers,
computer systems, and computer data, as specified in Section 502.
   (25) Conspiracy to commit any of the crimes listed above, as
defined in Section 182.
   (26) Subdivision (a) of Section 186.22, or a felony subject to
enhancement as specified in subdivision (b) of Section 186.22.
   (27) Any offenses related to fraud or theft against the state's
beverage container recycling program, including, but not limited to,
those offenses specified in this subdivision and those criminal
offenses specified in the California Beverage Container Recycling and
Litter Reduction Act, commencing at Section 14500 of the Public
Resources Code.
   (28) Human trafficking, as defined in Section 236.1.
   (29) Theft of personal identifying information, as defined in
Section 530.5.
   (30) Offenses involving the theft of a motor vehicle, as specified
in Section 10851 of the Vehicle Code.
   (31) Abduction or procurement by fraudulent inducement for
prostitution, as defined in Section 266a.
   (b) (1) "Pattern of criminal profiteering activity" means engaging
in at least two incidents of criminal profiteering, as defined by
this chapter, that meet the following requirements:
   (A) Have the same or a similar purpose, result, principals,
victims, or methods of commission, or are otherwise interrelated by
distinguishing characteristics.
   (B) Are not isolated events.
   (C) Were committed as a criminal activity of organized crime.
   (2) Acts that would constitute a "pattern of criminal profiteering
activity" may not be used by a prosecuting agency to seek the
remedies provided by this chapter unless the underlying offense
occurred after the effective date of this chapter and the prior act
occurred within 10 years, excluding any period of imprisonment, of
the commission of the underlying offense. A prior act may not be used
by a prosecuting agency to seek remedies provided by this chapter if
a prosecution for that act resulted in an acquittal.
   (c) "Prosecuting agency" means the Attorney General or the
district attorney of any county.
   (d) "Organized crime" means crime that is of a conspiratorial
nature and that is either of an organized nature and seeks to supply
illegal goods and services such as narcotics, prostitution,
loan-sharking, gambling, and pornography, or that, through planning
and coordination of individual efforts, seeks to conduct the illegal
activities of arson for profit, hijacking, insurance fraud,
smuggling, operating vehicle theft rings, fraud against the beverage
container recycling program, or systematically encumbering the assets
of a business for the purpose of defrauding creditors. "Organized
crime" also means crime committed by a criminal street gang, as
defined in subdivision (f) of Section 186.22. "Organized crime" also
means false or fraudulent activities, schemes, or artifices, as
described in Section 14107 of the Welfare and Institutions Code, and
the theft of personal identifying information, as defined in Section
530.5.
   (e) "Underlying offense" means an offense enumerated in
subdivision (a) for which the defendant is being prosecuted.

186.3.  (a) In any case in which a person is alleged to have been
engaged in a pattern of criminal profiteering activity, upon a
conviction of the underlying offense, the assets listed in
subdivisions (b) and (c) shall be subject to forfeiture upon proof of
the provisions of subdivision (d) of Section 186.5.
   (b) Any property interest whether tangible or intangible, acquired
through a pattern of criminal profiteering activity.
   (c) All proceeds of a pattern of criminal profiteering activity,
which property shall include all things of value that may have been
received in exchange for the proceeds immediately derived from the
pattern of criminal profiteering activity.

186.4.  (a) The prosecuting agency shall, in conjunction with the
criminal proceeding, file a petition of forfeiture with the superior
court of the county in which the defendant has been charged with the
underlying criminal offense, which shall allege that the defendant
has engaged in a pattern of criminal profiteering activity, including
the acts or threats chargeable as crimes and the property
forfeitable pursuant to Section 186.3. The prosecuting agency shall
make service of process of a notice regarding that petition upon
every individual who may have a property interest in the alleged
proceeds, which notice shall state that any interested party may file
a verified claim with the superior court stating the amount of their
claimed interest and an affirmation or denial of the prosecuting
agency's allegation. If the notices cannot be given by registered
mail or personal delivery, the notices shall be published for at
least three successive weeks in a newspaper of general circulation in
the county where the property is located. If the property alleged to
be subject to forfeiture is real property, the prosecuting agency
shall, at the time of filing the petition of forfeiture, record a lis
pendens in each county in which the real property is situated which
specifically identifies the real property alleged to be subject to
forfeiture. The judgment of forfeiture shall not affect the interest
in real property of any third party which was acquired prior to the
recording of the lis pendens.
   (b) All notices shall set forth the time within which a claim of
interest in the property seized is required to be filed pursuant to
Section 186.5.

186.5.  (a) Any person claiming an interest in the property or
proceeds may, at any time within 30 days from the date of the first
publication of the notice of seizure, or within 30 days after receipt
of actual notice, file with the superior court of the county in
which the action is pending a verified claim stating his or her
interest in the property or proceeds. A verified copy of the claim
shall be given by the claimant to the Attorney General or district
attorney, as appropriate.
   (b) (1) If, at the end of the time set forth in subdivision (a),
an interested person, other than the defendant, has not filed a
claim, the court, upon motion, shall declare that the person has
defaulted upon his or her alleged interest, and it shall be subject
to forfeiture upon proof of the provisions of subdivision (d).
   (2) The defendant may admit or deny that the property is subject
to forfeiture pursuant to the provisions of this chapter. If the
defendant fails to admit or deny or to file a claim of interest in
the property or proceeds, the court shall enter a response of denial
on behalf of the defendant.
   (c) (1) The forfeiture proceeding shall be set for hearing in the
superior court in which the underlying criminal offense will be
tried.
   (2) If the defendant is found guilty of the underlying offense,
the issue of forfeiture shall be promptly tried, either before the
same jury or before a new jury in the discretion of the court, unless
waived by the consent of all parties.
   (d) At the forfeiture hearing, the prosecuting agency shall have
the burden of establishing beyond a reasonable doubt that the
defendant was engaged in a pattern of criminal profiteering activity
and that the property alleged in the petition comes within the
provisions of subdivision (b) or (c) of Section 186.3.

186.6.  (a) Concurrent with, or subsequent to, the filing of the
petition, the prosecuting agency may move the superior court for the
following pendente lite orders to preserve the status quo of the
property alleged in the petition of forfeiture:
   (1) An injunction to restrain all interested parties and enjoin
them from transferring, encumbering, hypothecating or otherwise
disposing of that property.
   (2) Appointment of a receiver to take possession of, care for,
manage, and operate the assets and properties so that such property
may be maintained and preserved.
   (b) No preliminary injunction may be granted or receiver appointed
without notice to the interested parties and a hearing to determine
that such an order is necessary to preserve the property, pending the
outcome of the criminal proceedings, and that there is probable
cause to believe that the property alleged in the forfeiture
proceedings are proceeds or property interests forfeitable under
Section 186.3. However, a temporary restraining order may issue
pending that hearing pursuant to the provisions of Section 527 of the
Code of Civil Procedure.
   (c) Notwithstanding any other provision of law, the court in
granting these motions may order a surety bond or undertaking to
preserve the property interests of the interested parties.
   (d) The court shall, in making its orders, seek to protect the
interests of those who may be involved in the same enterprise as the
defendant, but who were not involved in the commission of the
criminal profiteering activity.

186.7.  (a) If the trier of fact at the forfeiture hearing finds
that the alleged property or proceeds is forfeitable pursuant to
Section 186.3 and the defendant was engaged in a pattern of criminal
profiteering activity, the court shall declare that property or
proceeds forfeited to the state or local governmental entity, subject
to distribution as provided in Section 186.8. No property solely
owned by a bona fide purchaser for value shall be subject to
forfeiture.
   (b) If the trier of fact at the forfeiture hearing finds that the
alleged property is forfeitable pursuant to Section 186.3 but does
not find that a person holding a valid lien, mortgage, security
interest, or interest under a conditional sales contract acquired
that interest with actual knowledge that the property was to be used
for a purpose for which forfeiture is permitted, and the amount due
to that person is less than the appraised value of the property, that
person may pay to the state or the local governmental entity which
initiated the forfeiture proceeding, the amount of the registered
owner's equity, which shall be deemed to be the difference between
the appraised value and the amount of the lien, mortgage, security
interest, or interest under a conditional sales contract. Upon that
payment, the state or local governmental entity shall relinquish all
claims to the property. If the holder of the interest elects not to
make that payment to the state or local governmental entity, the
property shall be deemed forfeited to the state or local governmental
entity and the ownership certificate shall be forwarded. The
appraised value shall be determined as of the date judgment is
entered either by agreement between the legal owner and the
governmental entity involved, or if they cannot agree, then by a
court-appointed appraiser for the county in which the action is
brought. A person holding a valid lien, mortgage, security interest,
or interest under a conditional sales contract shall be paid the
appraised value of his or her interest.
   (c) If the amount due to a person holding a valid lien, mortgage,
security interest, or interest under a conditional sales contract is
less than the value of the property and the person elects not to make
payment to the governmental entity, the property shall be sold at
public auction by the Department of General Services or by the local
governmental entity which shall provide notice of that sale by one
publication in a newspaper published and circulated in the city,
community, or locality where the sale is to take place.
   (d) Notwithstanding subdivision (c), a county may dispose of any
real property forfeited to the county pursuant to this chapter
pursuant to Section 25538.5 of the Government Code.

186.8.  Notwithstanding that no response or claim has been filed
pursuant to Section 186.5, in all cases where property is forfeited
pursuant to this chapter and, if necessary, sold by the Department of
General Services or local governmental entity, the money forfeited
or the proceeds of sale shall be distributed by the state or local
governmental entity as follows:
   (a) To the bona fide or innocent purchaser, conditional sales
vendor, or holder of a valid lien, mortgage, or security interest, if
any, up to the amount of his or her interest in the property or
proceeds, when the court declaring the forfeiture orders a
distribution to that person. The court shall endeavor to discover all
those lienholders and protect their interests and may, at its
discretion, order the proceeds placed in escrow for up to an
additional 60 days to ensure that all valid claims are received and
processed.
   (b) To the Department of General Services or local governmental
entity for all expenditures made or incurred by it in connection with
the sale of the property, including expenditures for any necessary
repairs, storage, or transportation of any property seized under this
chapter.
   (c) To the general fund of the state or local governmental entity,
whichever prosecutes.
   (d) In any case involving a violation of subdivision (b) of
Section 311.2, or Section 311.3 or 311.4, in lieu of the distribution
of the proceeds provided for by subdivisions (b) and (c), the
proceeds shall be deposited in the county children's trust fund,
established pursuant to Section 18966 of the Welfare and Institutions
Code, of the county that filed the petition of forfeiture. If the
county does not have a children's trust fund, the funds shall be
deposited in the State Children's Trust Fund, established pursuant to
Section 18969 of the Welfare and Institutions Code.
   (e) In any case involving crimes against the state beverage
container recycling program, in lieu of the distribution of proceeds
provided in subdivision (c), the proceeds shall be deposited in the
penalty account established pursuant to subdivision (d) of Section
14580 of the Public Resources Code, except that a portion of the
proceeds equivalent to the cost of prosecution in the case shall be
distributed to the local prosecuting entity that filed the petition
of forfeiture.
   (f) In any case involving human trafficking of minors for purposes
of prostitution or lewd conduct, or in any case involving a
violation of Section 266a in which the victim is a minor, in lieu of
the distribution provided for in subdivision (c), the proceeds shall
be deposited in the Victim-Witness Assistance Fund to be available
for appropriation to fund child sexual exploitation and child sexual
abuse victim counseling centers and prevention programs under Section
13837. Fifty percent of the funds deposited in the Victim-Witness
Assistance Fund pursuant to this subdivision shall be granted to
community-based organizations that serve minor victims of human
trafficking.

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