Gov. Brown acts to speed up restitution to corporate fraud victims
A decade after the Legislature created a fund to pay victims of corporate fraud, the state has dispersed just a fraction of the money raised through a fee on corporate document filings.
In response, Gov. Jerry Brown has signed legislation this week to speed up payouts to those who have been scammed.
Sen. Ted Lieu (D-Torrance) introduced the bill in response to a column in the Sacramento Bee last October that said $14.6 million had been raised for the Victims of Corporate Fraud Compensation Fund since 2002, but that of hundreds of claims only seven had been settled, resulting in a total payout of $112,000.
The numbers have risen since then: As of today more than $2.3 million has been paid to more than 215 people, according to Nicole Winger, a spokeswoman for the secretary of State's office, which administers the fund. That is still only 16% of the money available.
The bill signed by Brown and supported by Secretary of State Debra Bowen calls for paying victims within 90 days. It also increases the maximum restitution payments from $20,000 to $50,000 per victim and allows a court judgment against a corporation to serve as proof that the victim is entitled to payment, blocking appeals.
“The bottom-line goal of SB 1058 is to revamp the existing fraud-compensation structure, gut red tape and ensure speedy financial help, if not recovery, for those who deserve it the most,” Lieu said.
-- Patrick McGreevy in Sacramento
Photo: Gov. Jerry Brown at a news conference this week. Credit: Justin Sullivan / Getty Images