California Penal Code 186.11 – Freeze and Seize Law

California Penal Code Section 186.11, often called the “Freeze and Seize” law, is a legal tool that enhances penalties for major white-collar crimes and gives the government authority to freeze and seize assets connected to financial crimes. It was created to ensure that convicted individuals do not escape financial responsibility for their actions and that victims are properly compensated.

What Is Penal Code 186.11?

This law applies in criminal cases involving multiple felony convictions related to fraud or embezzlement where the total financial loss to victims is over $100,000. It includes both a sentencing enhancement and a powerful asset freezing mechanism that can take effect even before a conviction.

Known formally as the “aggravated white-collar crime enhancement,” this section of the Penal Code is used when multiple financial crimes are committed through a connected scheme or plan. Prosecutors must show that the crimes are part of a pattern of criminal behavior, not isolated events.

Criteria for Application

To apply Penal Code 186.11, the prosecution must prove:

• The defendant committed two or more felony offenses

• The crimes are related in method or target (for example, they were carried out against the same victim or involved similar fraudulent tactics)

• The total loss from the criminal activity exceeds $100,000

• The offenses involved fraud or embezzlement

This law is commonly applied in cases such as health care fraud, investment scams, corporate embezzlement, and other high-value financial schemes.

Prison Sentence Enhancements

If convicted under this law, the defendant faces an enhanced prison sentence that is served in addition to the penalties for the underlying crimes.

• When the loss is between $100,000 and $500,000, the court may impose an additional one or two years of prison time.

• When the loss is over $500,000, the court may impose up to five extra years.

These sentencing enhancements are discretionary, which means the court evaluates the facts of the case before applying them.

Additional Fines and Financial Penalties

In addition to prison time, significant financial penalties can be imposed. The fines are based on the greater of either a flat dollar amount or double the value of the financial loss:

• If the total loss is under $500,000, the court may fine the greater of $100,000 or twice the amount taken.

• If the loss is $500,000 or more, the court may fine the greater of $500,000 or double the loss.

These fines are separate from any restitution that the defendant is ordered to pay to victims.

Freezing Assets Before Trial

A unique and powerful aspect of Penal Code 186.11 is that it allows the government to freeze a defendant’s assets before the trial even concludes. This is done to prevent the defendant from hiding, spending, or transferring property that could be used to compensate victims later.

With court approval, prosecutors can request a temporary restraining order or injunction to freeze bank accounts, vehicles, real estate, investment assets, and other valuables. The court may also appoint a receiver to manage the assets during the criminal case.

This asset freeze is based on a showing of probable cause. If the prosecution can convince a judge that the defendant is likely to be convicted and that the assets are tied to the criminal behavior, the freeze will be granted.

Property That Can Be Frozen

The law allows the freezing of a wide range of property, including:

• Personal and business bank accounts

• Stocks and retirement accounts

• Real estate, such as homes or commercial property

• Vehicles, including boats and luxury cars

• Jewelry, art, and collectibles

• Business interests and intellectual property

Even assets that were transferred to another person may be subject to seizure if the transfer was made to avoid forfeiture.

Asset Seizure After Conviction

After a conviction, frozen assets can be officially seized and sold to help satisfy court-ordered restitution, fines, and other penalties. The court prioritizes how the proceeds are distributed:

1. Administrative costs of receivership

2. Secured liens and creditors with valid claims

3. Restitution to crime victims

4. Fines imposed under the Penal Code

5. Any remaining funds may be directed to public funds or returned to the defendant

Victim restitution is the highest priority, and by law, at least 70% of seized assets must go toward compensating victims when possible.

Rights of Third Parties

Innocent third parties—such as spouses, family members, or business partners—may have legal claims to property frozen under PC 186.11. The law gives these individuals the right to file a verified claim in court to challenge the freeze and assert their ownership.

The court will schedule a hearing where both the prosecution and the claimant present evidence. If the court finds that the third party’s interest in the property is legitimate and unconnected to the crime, it may release that portion of the property from the freeze.

The law also allows courts to release frozen funds for reasonable living expenses, legal fees, or bail in appropriate cases.

Legal Safeguards

While the law is strict, it includes important protections to ensure that defendants and innocent parties are treated fairly. Courts consider the potential harm caused by freezing assets and aim to balance that against the need to preserve resources for restitution.

Defendants are entitled to legal representation and have the right to argue against the freezing or seizure of assets. A court must be satisfied that there is enough evidence to support the freeze and that doing so will not cause undue hardship.

Importance of PC 186.11 in White-Collar Crime Cases

This law is widely used in high-stakes financial crime cases to:

• Discourage large-scale fraud and embezzlement

• Prevent defendants from hiding or spending money while under investigation

• Ensure that victims receive compensation through restitution

• Support fair punishment for crimes involving significant financial damage

Law enforcement and prosecutors view this law as a crucial tool in dismantling white-collar criminal enterprises and restoring losses to victims.

Common Questions About Penal Code 186.11

Can the government freeze assets before a conviction?
Yes. If there is probable cause that the defendant committed a qualifying crime, assets can be frozen before trial.

What happens to the assets after conviction?
They may be sold, and the proceeds are used to pay court-ordered restitution and fines.

What if someone else owns the property?
That person can file a verified claim in court to try and have their share of the property released.

Does this apply to misdemeanors?
No. PC 186.11 only applies to felony-level fraud and embezzlement cases involving major financial losses.

Can I use frozen funds to pay for my lawyer?
Possibly. Courts have discretion to release funds for necessary legal and living expenses in some cases.

Conclusion

California Penal Code Section 186.11 gives the state powerful tools to pursue justice in cases involving complex and costly financial crimes. While it enables serious consequences for those who commit fraud or embezzlement, it also includes procedures to protect defendants’ rights and the interests of third parties. If you or someone you know is involved in a case where this law may apply, seeking legal advice early is critical.