California lawmakers are advancing legislation - Assembly Bill 2432 (“AB 2432”) - that
seeks to impose enhanced penalties on corporations found guilty of felonies and
misdemeanors. The bill was introduced in February of this year and co-sponsored by
the California Attorney General in April. The proposed measure aims to increase
support for crime victim services by generating additional funding through increased
corporate fines.
Under AB 2432, if a corporation is convicted of a crime, it shall be subject to a separate
and additional restitution fine of up to $1,000 for a misdemeanor or $10,000 for a felony,
in addition to any other penalty provided or authorized by law. The restitution fine shall
be commensurate with the seriousness of the offense. Such fine must be imposed on
each criminal corporation unless the court finds compelling and extraordinary reasons
for not doing so and states those reasons on the record.
Further, AB 2432 proposed the corporate white collar criminal enhancement, an
additional fine on the corporation if the corporation is convicted of a crime. The court
may, but is not required, to impose this fine, in addition to any other penalty or fine
provided by law. Such fine shall not exceed the greater of either (i) $25,000,000 or (ii)
two times the value of the taking or loss, whichever is greater, if the offense resulted in
the taking of the money, labor, or real or personal property of another person or entity.
The court shall consider all factors in determining the amount of the enhancement fine,
including (a) the nature and seriousness of the offense, (b) the number of offenses
committed, (c) the persistence of the criminal conduct, (d) the length of time over which
the criminal conduct occurred, (e) the willfulness of the corporation’s criminal conduct,
and (f) the assets, liabilities and net worth of the corporation.
It is important to note that AB 2432’s definition of a corporation is relatively broad and
was amended for a third time in April. A corporation under the bill includes a firm,
association, organization, partnership, business trust, company, corporation, limited
liability company, public entity, or any other legal entity.
It is understood that this proposed bill seeks to be broadly applicable, on the one hand,
to hold business and non-business entities criminally responsible for certain harms
committed against victims, and, on the other hand, to provide greater assistance to
victims and their families. It will face votes of the full Assembly and Senate.