Proposed California Bill to Increase Fines for Corporate Offenders
2024-09-24 10:30:28
California lawmakers are advancing Assembly Bill 2432 (AB 2432), which aims to impose harsher penalties on corporations convicted of felonies and misdemeanors. The proposed bill entered the legislative process in February of this year, and in April, the California Attorney General became a co-sponsor. Legislators hope to generate additional funds by increasing corporate fines to bolster support for crime victim services.
Under AB 2432, if a corporation is convicted of a criminal offense, it will be subject to a separate and additional compensatory fine, in addition to any other penalties prescribed or authorized by law. The fine would be up to 1,000foramisdemeanor∗∗andupto∗∗10,000 for a felony, with the amount proportionate to the severity of the offense. Corporations convicted of crimes would generally be required to pay such fines unless the court finds compelling and extraordinary reasons not to impose them, which must be documented in the record.
Additionally, AB 2432 introduces enhanced penalties for corporate white-collar crimes. If a corporation is convicted, the court may, but is not required to, impose an enhanced fine. This fine would be in addition to any other penalties or fines prescribed by law and would not exceed the greater of: (i) $25,000,000, or (ii) twice the value of the misappropriation or loss (whichever is greater) if the criminal conduct resulted in the misappropriation of money, labor, real property, or personal property of another person or entity. When determining the amount of the enhanced fine, the court must consider all relevant factors, including: (a) the nature and seriousness of the offense, (b) the number of violations, (c) the persistence of the misconduct, (d) the duration of the misconduct, (e) the willfulness of the corporation's misconduct, and (f) the corporation's assets, liabilities, and net worth.
Notably, AB 2432 defines "corporation" broadly. The definition, revised for the third time in April, includes corporations, associations, organizations, partnerships, business trusts, companies, limited liability companies, public entities, or any other legal entities.
The proposed bill has a clear intent: to hold both corporate and non-corporate entities more accountable for criminal conduct that causes harm to victims and to provide as much assistance as possible to victims and their families. The bill will now face votes in both the California State Assembly and Senate.