Yes, and they instantly teleport to your location now.
*somewhere in a far off cave; a Lich's lair*
Player: "This lich had a lot of cool treasure!" *grabs gold*
*Guards materialize* "STOP! YOU'VE BROKEN THE LAW!"
Player: "How...where did you all come from?"
Guards: "YOU SHOULD HAVE PAID THE FINE!"
THIS! It actually happened to me one time, I was pretty far away from a city, I accidentally picked something up(machine said stolen), and before I could put the item back, my perspective changes to move around and see an angry gaurd screaming that at me. I nearly crapped my pants the first time it happened because I was totally caught off guard. My other pet peeve is being hunted by them halfway across the land, I steal something in the capital, then I am on the other-side of the map and all of a sudden they popup out of the blue and screaming in my face (again), I was like WTF?!?!
These are the most dedicated guards I have ever seen anywhere. I have to ask what the hell are these guys getting paid? They have a house of gold? Their own harem? The promise of immortality? Whatever it is, its the best motivator ever!