AB 1395 Assembly Bill – Bill Analysis u s anti money laundering laws


AB 1395

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1395 (salas)

As amended january 4, 2016

Majority vote


|committee |votes|ayes |noes |

| | | | |

| | | | |

| | | | |


|public safety |4-1 |quirk, jones-sawyer, |melendez |

| | |low, santiago | |

| | | | |


|appropriations |16-0 |gomez, bigelow, | |

| | |bloom, bonilla, | |

| | |bonta, calderon, | |

| | |chang, daly, eggman, | |

| | |gallagher, eduardo | |

| | |garcia, holden, | |

| | |jones, quirk, weber, | |

| | |wood | |

| | | | |

| | | | |


SUMMARY: adds to the list of crimes for which a person can be

Prosecuted for money laundering. Specifically, this bill

u s anti money laundering laws

Expands the definition of criminal activity to include

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Misdemeanor gambling violations for purposes of money



1)states that any person who conducts or attempts to conduct a

Transaction within a seven-day period involving a monetary

Instrument or instruments of a total value exceeding $5,000,

Or a total value exceeding $25,000 within a 30-day period,

Through one or more financial institutions with the specific

Intent to promote, manage, establish, carry on, or facilitate

The promotion, management, establishment, or carrying on of

Any criminal activity, or knowing that the monetary instrument

Represents the proceeds of, or is derived directly or

Indirectly from the proceeds of, criminal activity, as

Defined, is guilty of the crime of money laundering.

2)defines criminal activity for purposes of money laundering

To mean a criminal offense punishable under the laws of this

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State by death, imprisonment in the state prison, or

Imprisonment in a county-jail-eligible felony or from a

Criminal offense committed in another jurisdiction punishable

Under the laws of that jurisdiction by death or imprisonment

For a term exceeding one year.

3)provides that a person convicted of money laundering may be

Punished by imprisonment in county jail for either a

Misdemeanor with a maximum of one year or a felony and by a

Fine of not more than $250,000 or twice the value of the

Property transacted, whichever is greater. On a second or

Subsequent conviction, the maximum fine that may be imposed is

$500,000 or five times the value of the property transacted,

Whichever is greater.

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4)enhances the penalty of a person convicted of money laundering

As follows:

A) A mandatory additional term of one year to be served

Consecutive to the punishment if the value of the

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Transaction or transactions exceeds $50,000 but is less

Than $150,000;

B) A mandatory additional term of two years to be served

Consecutive to the punishment if the value of the

Transaction or transactions exceeds $150,000 but is less

Than $1,000,000;

C) A mandatory additional term of three years to be served

Consecutive to the punishment if the value of the

Transaction or transactions exceeds $1,000,000 but is less

Than $2,500,000; or

D) A mandatory additional term of four years to be served

Consecutive to the punishment if the value of the

Transaction or transactions exceeds $2,500,000.

5)prohibits lotteries, with exceptions for the california state

Lottery, bingo for charitable purposes, and charitable raffles

Conducted by a non-profit, tax-exempt organization, and makes

The violation of those crimes punishable as a misdemeanor.

6)defines a lottery as any scheme for the disposal or

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Distribution of property by chance, among persons who have

Paid or promised to pay any valuable consideration for the

Chance of obtaining such property or a portion of it, or for

Any share or any interest in such property, upon agreement,

Understanding or expectation that it is to be distributed or

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Disposed of by lot or chance whether called a lottery, raffle,

Or gift enterprise, or by whatever name the same may be known.

7)states that every person who deals, plays, or carries on,

Opens, or causes to be opened, or who conducts either as owner

Or employee, whether for hire or not, any game of faro, monte,

Roulette, lansquenet, rouge et noire, rondo, tan, fan-tan,

Seven-and-a-half, twenty-one, hokey-pokey, or any banking or

Percentage game played with cards, dice, or any device, for

Money, checks, credit, or other representative of value, and

Every person who plays or bets at or against any of those

u s anti money laundering laws

Prohibited games is guilty of a misdemeanor punishable by a

Fine not less than $1,000 or by imprisonment in the county

Jail not exceeding six months, or by both the fine and


FISCAL EFFECT: according to the assembly appropriations

Committee, moderate costs to the california department of

Corrections and rehabilitation (CDCR) of less than $150,000

(general fund), if less than five persons are sentenced to

Prison per a year, instead of county jail. According to CDCR,

The annual contracted bed rate is $27,000 per inmate.

Moderate nonreimbursable local costs for incarceration, offset

To a degree by fee revenue.

COMMENTS: according to the author, in 2014, I authored

Assembly bill (AB) 1439 [chapter 592] to clarify that gambling

At sweepstakes cafes is illegal. Specifically, the bill made

Internet gambling sweepstakes at these cafes an unfair business

Practice and gave the attorney general, district attorneys, and

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City attorneys the authority to bring civil suit to subject

Operators to civil penalties for violations.

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On june 25, 2015 the california supreme court ruled in people

Ex rel. V. Grewal that computerized sweepstakes found at

Internet cafes are illegal under state gambling laws. In a

Unanimous ruling, the court rejected arguments that the

Sweepstakes are different from slot machines because they have

Predetermined outcomes.

Despite AB 1439 and the grewal decision, new examples of

Illegal gambling establishments have emerged. These operators

Claim they are not offering gambling or sweepstakes, but rather

‘social gaming and mining.’ while the business model may have

Changed, the underlying nature of the games these cafes are

Offering has not.

AB 1395 would provide law enforcement with the ability to use

Criminal remedies when combatting egregious cases of organized,

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Illegal gambling. Specifically, the bill incorporates

Violations of the gambling laws into organized crime and money

Laundering statutes. This approach has been used successfully

In other states and will give law enforcement the right tools to

Go after illegal gambling.

Analysis prepared by:

Stella choe / PUB. S. / (916) 319-3744 FN:


AB 1395

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