Q-SOFT, INC. v. Superior Court

The “Freeze and Seize Law” (Pen. Code, § 186.11) is designed to provide restitution to white collar crime victims from assets under the convicted criminal’s control. Here, a corporate victim claims that the trial court misapplied the “innocent spouse” exception in the Freeze and Seize Law by permitting the embezzler’s former husband to retain his one-half community interest in the family residence, and by further permitting the embezzler’s current husband to retain most (but not all) of his community interest.

Ignored by the parties is the central fact that a substantial amount of the community interests already have been distributed to the corporation. We issue a writ of mandate to give the trial court the opportunity to clarify whether its distribution orders of August 3, 2004 and July 26, 2005, will accord the corporation the full restitution to which it is entitled under the law. If yes, the distribution orders have been appropriately made. If no, the trial court should make further findings as to the extent of the shortfall, and whether the spouses legitimately acquired their community interests in the remaining assets that would be used to satisfy any unpaid…