Penal Code 186.11 PC sets forth an additional consecutive prison term (of one to five years) if
- a person is convicted of two or more fraud or embezzlement related felonies in a single case, and
- the criminal activity involves the taking of over $100,000.
If imposed, the defendant serves the prison time immediately after serving time for the underlying felonies.
The law also authorizes the confiscation of a defendant’s assets or property to cover victim restitution and to pay any applicable fines. Fines under the code section may be as steep as $500,000 or double the value of the seized property taken (whichever is greater).
186.11 PC states that “(a)(1)Any person who commits two or more related felonies, a material element of which is fraud or embezzlement, which involve a pattern of related felony conduct, and the pattern of related felony conduct involves the taking of, or results in the loss by another person or entity of, more than one hundred thousand dollars ($100,000), shall be punished, upon conviction of two or more felonies in a single criminal proceeding, in addition and consecutive to the punishment prescribed for the felony offenses of which he or she has been convicted, by an additional term of imprisonment in the state prison as specified in paragraph (2) or (3). This enhancement shall be known as the aggravated white collar crime enhancement. The aggravated white collar crime enhancement shall only be imposed once in a single criminal proceeding. For purposes of this section, “pattern of related felony conduct” means engaging in at least two felonies that have the same or similar purpose, result, principals, victims, or methods of commission, or are otherwise interrelated by distinguishing characteristics, and that are not isolated events. For purposes of this section, “two or more related felonies” means felonies committed against two or more separate victims, or against the same victim on two or more separate occasions.”
Fraud involves the deception or trickery of another person for personal or financial gain. There are several forms of fraud under California law. Some include:
Penal Code 503 PC is the State statute on embezzlement. A person commits the offense if he/she:
- unlawfully takes property that has been entrusted to him/her and
- does so with the intent of depriving the rightful owner of the use of the property.
Our California criminal defense attorneys will explain the following in this article:
- 1. What is California’s “freeze and seize” law?
- 2. What are the 186.11 PC penalties?
- 3. Can the court seize assets to pay for fines and victim restitution?
- 4. What are the crimes of fraud and embezzlement?
1. What is California’s “freeze and seize” law?
A prosecutor must prove the following to sustain the white-collar “freeze and seize” penalty enhancement:
- he/she committed two or more related felonies,
- the felonious acts included elements of fraud or embezzlement,
- the acts involved a pattern of related felony conduct, and
- the felonies resulted in a taking, or loss of, $100,000 or more.1
A “pattern of related felony conduct” means engaging in at least two felonies that had similar:
- victims, or
- methods of commission.2
The felonies can also make up a pattern if they are:
- interrelated by distinguishing characteristics, and
- are not isolated events.3
Related felonies are felonies committed against:
- two or more separate victims, or
- the same victim on two or more separate occasions.4
2. What are the 186.11 PC penalties?
A party guilty under this law receives an additional and consecutive term in state prison. This means the defendant must serve extra time in prison immediately after the time served for the underlying felony criminal conviction.
The specific amount of prison time depends on the amount of money the defendant took. A party will receive a consecutive term of one to two years in prison if he/she took:
- more than $100,000, but
- less than $500,000.5
In this case, the defendant can also be punished with a fine of the greater of:
- $100,000, or
- double the value of the taking.6
A defendant would receive a consecutive prison term of up to five years if he took $500,000 or more.7
In this case, the party can also be punished with a fine of the greater of:
- $500,000, or
- double the value of the taking.8
3. Can the court seize assets to pay for fines and victim restitution?
PC 186.11 authorizes the court to initiate the confiscation of assets and forfeiture proceedings of a defendant’s assets in order to pay:
- any applicable fines under the law, and
- restitution to the victim(s).9
Courts can attempt the following seizure of assets:
- any property that was under the defendant’s control, and/or
- any property that may have been transferred to a third party.10
Note that, if there was a transfer to a third party such as a financial institution, that party can challenge the court’s possible seizure of the property or assets. This is provided that the party did not know that anyone else had a claim to it.11
Note too that the statute authorizes the court to pursue the following to take control of any applicable property:
- a temporary restraining order, and/or
- a preliminary injunction.12
4. What are the crimes of fraud and embezzlement?
Penal Code 186.11 applies if a defendant committed felonious acts that included elements of:
- fraud, or
These are two very distinct acts under California law. Many of these cases are prosecuted by the California Attorney General as opposed to a county district attorney.
A person violates California’s criminal fraud laws anytime he/she:
- commits an act that results in an unfair or undeserved benefit for him/her, and/or
- causes harm or loss to another person.
Fraudulent acts are most frequently driven by two motives:
- financial gain, or
- the desire to escape criminal culpability.
Fraud-related crimes can come in many forms. These include:
- automobile insurance fraud,
- health care fraud,
- Medi-Cal insurance fraud,
- unemployment insurance fraud,
- real estate fraud,
- check fraud,
- identity theft,
- nursing home fraud,
- mail fraud, and
- gambling fraud.
Penal Code 503 PC is the California statute that defines the crime of embezzlement.
A prosecutor must prove the following to convict a person under this law:
- an owner entrusted his/her property to the defendant,
- the owner did so because he/she trusted the defendant,
- the defendant fraudulently converted or used that property for his/her own beneﬁt, and
- he/she intended to deprive the owner of its use.13
Examples of the crime are when:
- a cashier pockets some cash from her drawer.
- the treasurer of a neighborhood sports club takes some money out of the club’s bank account.
- an investor takes some of his client’s money to pay off a gambling debt.
Embezzling property valued at $950 or less is a misdemeanor. The offense is punishable by up to 6 months in county jail.
Embezzlement of property greater than $950 can be charged as a felony. The crime can carry a sentence of up to 3 years in custody.
For additional help…
For additional guidance on the white-collar crime enhancement or to discuss your case with a criminal defense attorney, we invite you to contact our criminal law firm Shouse Law Group.
See our related article on criminal asset forfeiture/forfeiture of property in California, which discusses due process civil proceedings and the claimant’s and respondent’s burden of proof/standard of proof re. criminal/civil forfeiture laws.
For federal law information, refer to the Department of Justice’s Money Laundering and Asset Recovery Section – justice.gov. Federal law enforcement agencies always get involved when a case involves foreign states and jurisdictions as opposed to domestic law cases.
- California Penal Code 186.11 PC. See also CALCRIM No. 3221 – Aggravated White-Collar Crime. Judicial Council of California Criminal Jury Instructions (2017 edition)
- CALCRIM No. 3221 – Aggravated White-Collar Crime. See also the case law People v. Frederick (California Court of Appeals, 2006) 142 Cal.App.4th 400.
- CALCRIM No. 3221 – Aggravated White-Collar Crime.
- See same.
- California Penal Code 186.11a3 PC. See also California Penal Code 12022.6.
- California Penal Code 186.11c PC.
- California Penal Code 186.11a2 PC.
- California Penal Code 186.11c PC.
- California Penal Code 186.11d1 PC.
- See same.
- California Penal Code 186.11d6 PC. See also People v. Semaan (California Supreme Court, 2007) 42. Cal.4th 79.
- California Penal Code 186.11d2 PC.
- CALCRIM No. 1806 – Theft by Embezzlement.