California’s Aggravated White Collar Crime Enhancement

As state prosecutors continue to heavily investigate criminal violations involving fraud, embezzlement, and related financial schemes in California, the government is equipped with a powerful tool under Penal Code § 186.11. This statute is often called the “aggravated white collar crime enhancement.” It does not create a new crime. Instead, it enhances the consequences by adding major penalties, including prison, and severe fines to existing criminal charges when the case involves a large amount of money and a pattern of related felony conduct. Pen. Code § 186.11(a).

What Triggers Penal Code § 186.11?

This provision applies when the prosecution claims that a defendant’s criminal conduct involved: 

(1) Two or more related felonies: committed against two or more separate victims, or against the same victim on two or more separate occasions;
(2) Part of a pattern of related felony conduct: “pattern” is defined as conduct that have the same or similar purpose, result, principals, victims, or methods of commission, or are otherwise interrelated by distinguishing characteristics;
(3) Large Loss Amount: a total loss or attempted loss more than $100,000; and
(4) Fraud Related: the criminal conduct involved theft, fraud, embezzlement, money laundering, or other crimes where the material element is fraud or embezzlement.

This provision is designed to address ongoing financial schemes, and not merely one-time mistakes or isolated incidents. The prosecution must allege it and prove it beyond a reasonable doubt at trial. 

The Enhancement is Serious and Carries Significant Risks

When Penal Code § 186.11 is alleged, defending the case changes in important ways. The prosecution’s election to charge the section clearly demonstrates that it is seeking to treat the case as a serious white collar criminal case. Alleged losses over $500,000 are especially serious given the significant exposure to a consecutive state prison term for up to five (5) additional years. The prosecution leverages this powerful tool against the charged individual, carrying with it exposure to significant consequences. Having experienced defense counsel build a robust defense to this enhancement is critical to one’s case because it impacts all stages of the matter including arraignment, release, bail, preliminary hearing, and trial. 

• Additional Custody Time: If proven, the court must add extra custody time to any sentence for the underlying offense: one (1) year if the loss exceeds $100,000 and two (2) years if the loss exceeds $200,000 but under $500,000. Pen. Code §§ 186.11(a)(3) and 12022.6(a). 

• Prison Enhancement for Losses Over $500,000: If proven, the court must add an extra consecutive term of either two (3), three (3), or five (5) years in State Prison to any sentence where the amount of the taking or loss by the victim is over $500,000. Pen. Code § 186.11(a)(2). This additional prison term is on top of and in addition to the underlying sentence for the offense and any other additional custody time imposed under any other enhancements such as Penal Code § 12022.6(a). See, Pen. Code §186.11(b)(2) (this prison enhancement is not limited by any other provision of law). 

• Asset Freezes Before Trial: The court can freeze bank accounts and property at the government’s request before any conviction upon a showing of probable cause that the funds or property in question are related to the fraud. Pen. Code § 186.11(e)(1).

• Mandatory Restitution: If convicted, the court must order full restitution to victims. Pen. Code § 186.11(j) and Cal. Const., Art. I, § 28(b).

Defending Against a § 186.11 Allegation

Not every theft or fraud case qualifies for this enhancement. Effective defenses may include, among other theories, showing that:

• There was not a pattern of related felony conduct because the conduct was isolated and not part of a scheme.

• The losses were below the threshold and did not exceed $100,000.

• The government engaged in improper aggregation of losses and transactions that cannot be combined to reach the thresholds (People v. Whitmer (2014) 59 Cal. 4th. 733 and People v. Bailey (1961) 55 Cal. 2d 514).

• The asset tracing of assets that do not have a nexus to the alleged wrongdoing. 

Having an experienced defense to advise through the complexities of Penal Code § 186.11 is critical, especially when challenges to improper enhancements and limits on prison exposure and severe fines is of utmost importance as part of a favorable resolution. 

George Tran

George Tran is an experienced trial lawyer with a proven record of success in high-stakes litigation and government investigations. As a former prosecutor with the U.S. Department of Justice and Santa Clara County District Attorney’s Office, he has led scores of complex criminal investigations into fraud, embezzlement, money laundering, tax evasion, and public corruption. He has tried over 30 cases to verdict in federal and state courts across the country and brings substantial experience navigating courtroom proceedings. Learn more here.