California’s Unclaimed Property Regime Turns Private Assets into a State Revenue Stream

California State Controller Malia Cohen oversees more than $15 billion in unclaimed property. The program is described as a consumer-protection effort whose purpose is to safeguard private assets until they can be returned to their owners. California law imposes an indefinite obligation to make those returns. Yet under her direction the same program functions as a substantial and reliable source of General Fund revenue—approximately $1 billion annually—and has long ranked among the state’s top revenue sources. The Legislative Analyst’s Office identified the built-in conflict years ago: because unreunited property becomes General Fund money, the law creates an incentive for the state to reunite less of it. Cohen has shown little grasp of how to resolve that conflict.

Cohen is not a bystander to that conflict. As Controller she serves as trustee of the Unclaimed Property Fund. A trustee’s core duty is to protect the beneficiaries—the rightful owners—not to treat their property as a convenient fiscal resource for the state. She has subordinated that duty to the state’s revenue interest, managing the program in a manner that prioritizes the General Fund’s benefit over the aggressive reunification of private assets. That is a fundamental conflict of interest, not mere administrative inertia.

The consequences for owners are concrete and irreversible. Publicly traded securities delivered to the Controller must generally be sold between 18 and 20 months after the relevant report is filed. Once sold, the owner is entitled only to the net proceeds of that sale. All subsequent market appreciation and compounding are permanently lost. If the Controller had taken shares of a high-growth stock such as NVIDIA a decade ago and liquidated them on the statutory timetable, the owner would today hold only the far smaller cash value realized at the time of sale, not the multiplied worth of continued ownership.

That is not a technical inconvenience. It is the forced conversion of a long-term investment into a fixed, inferior sum for the state’s convenience.

Cohen has been named both individually and in her official capacity as Controller and trustee in repeated challenges to the program’s notice, seizure, and recovery practices. The Palmer Law Group litigation—including Hashim v. Cohen, related actions, and Peters v. Cohen—has alleged due-process failures and inadequate notice before property is taken and liquidated. In the Peters matter the record describes the escheat and sale of 1,029 Amazon shares (pre-split) belonging to a German resident; the Controller later returned approximately $1.6 million in sale proceeds. Adjusted for the subsequent 20-for-1 split, those shares would represent 20,580 post-split shares. At recent market prices near $270, the same position would be worth roughly $5.5 million. The pattern of individual-capacity suits against the sitting Controller, and the concrete loss of appreciation illustrated in Peters, underscores the seriousness with which owners and their counsel view the adequacy of notice and the irreversible effects of liquidation under her tenure.

Private contractors labeled “auditors” by the State Controller’s Office are compensated as a percentage of the property they identify and deliver into state custody. They do not perform traditional financial audits. Their financial interest rises with the volume of private assets they bring under state control. That arrangement creates an obvious misaligned incentive: the more property transferred from private owners into the state’s hands, the greater their reward. Cohen’s office has continued to operate within, and benefit from, this structure.

Cohen’s response to criticism has been selective outreach campaigns presented as evidence of diligence. The June 2026 mailing of notices to roughly 130,000 Californians matched through Franchise Tax Board records is one such effort. It demonstrates that better identification is possible when the Controller chooses to use the state’s data resources. It does not demonstrate that reunification has been made the overriding performance objective. A state that can locate residents with efficiency when it is owed money can locate them with equal determination when it is holding their money. Cohen is too little and too late—an attempt to convince the public that she is finally doing the job the office has long failed to prioritize.

As the elected official charged with administering the fund and protecting its beneficiaries, Cohen owns the responsibility for how the conflict is managed. She has not been the loudest voice demanding reforms that would prioritize measurable reunification, limit irreversible liquidation of securities, or eliminate percentage-based incentives for private examiners. The public is left with a system in which private property sits under state control, securities are sold on a fixed timetable, subsequent appreciation is lost to the owner, unreunited balances ultimately support the General Fund, and the Controller continues to face litigation over whether notice and recovery procedures adequately protect the people whose assets she holds in trust.

That is not fiduciary stewardship. It is the operation of a government program whose incentives remain misaligned with its stated purpose, under an official who has failed to confront those incentives with the urgency the duty requires. Californians are entitled to a Controller who treats unclaimed property as property that must be returned—not as a quiet revenue stream that happens to belong to someone else.