Three legislators are contemplating an overhaul of a dysfunctional fund intended to compensate corporate fraud victims.
Assemblyman Roger Dickinson, D-Sacramento; Sen. Alex Padilla, D-Los Angeles; and Sen. Ted Lieu, D-Torrance, each have said in recent days that they are looking at legislative fixes. Dickinson also said he may hold an oversight hearing.
"Let's compensate the people," Dickinson said Thursday.
Secretary of State Debra Bowen oversees the California Victims of Corporate Fraud Compensation Fund, and continued to balk Thursday at distributing money to almost 500 elderly people fraud victims.
The elderly people were victims of James A. Walker, disbarred attorney, who passed himself off as a financial adviser catering to elderly people.
The situation was the focus of this column on Sunday.
Created in 2002, the fund is fueled by $2.50 payments by California corporations. Over the years, it has generated $14 million, but less than $120,000 has been paid to fraud victims.
Last year, Gov. Arnold Schwarzenegger and the Legislature seized $10 million from the fund to pay other state costs.
On Thursday, advocates for elderly people and about 15 victims of the disbarred Roseville attorney held a press conference demanding that Bowen pay them.
Prescott Cole, of California Advocates for Nursing Home Reform, said at the press conference that the senior citizens provided proof of their loss and filled out four-page application forms, only to be denied payment. Cole noted that several of the original 514 elderly victims of Walker have died.
"When will this be resolved?" Cole demanded. "It's not fair and it is kind of cruel."
Bowen spokeswoman Nicole Winger said after the press conference that based on the Secretary of State's own regulations, the soonest Bowen could make any payments would be at the end of the fiscal year, meaning the end of June.
"We're going to pay eligible claims," Winger said.
The Secretary of State's regulations are patterned after California Department Real Estate regulations governing a fund for victims of real estate scams. The real estate fund has paid out $30 million to fraud victims over the years.
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