Actions that involve concealment, deceit, or violation of trust and are not dependent on the application of force or threat of violence are classified under white-collar crimes. Embezzlement is one such crime. The crime involves the misappropriation of company, organization, or government funds for personal use. This action violates the trust relationship between the company, organization, or the government and its employees.
Embezzlement charges result in misdemeanor or felony consequences upon conviction. You can avoid either or face reduced charges with the help of an experienced criminal defense attorney. The California Criminal Lawyer Group is ready to offer legal counsel and representation if you or a loved one faces embezzlement charges in Anaheim.
California’s PC 503 offers the framework for prosecuting embezzlement. It defines the crime and provides the penalties upon conviction.
Under PC 503, it is unlawful to take property entrusted to you by the owner. It can be argued that embezzlement is a form of theft. However, embezzlement is distinguishable from other theft cases because the property under consideration was entrusted to you by its rightful owner.
Convictions under PC 503 hinge on proving the following elements beyond a reasonable doubt.
- The property’s owner entrusted his/her property to you, the defendant. The owner did so because he/she trusted you
- You, through fraud, converted the property to your own benefit
- Your actions were intended to deprive the owner or deprived the owner of the benefits of said property
Three elements stand out from PC 503’s definition of embezzlement.
- Trust relationship
- Fraudulent use
- Intention to deprive
A relationship of trust exists in several areas. Three stand out:
- A trust relationship between an employer and his/her employees — Employees are expected, through their actions, to manage and care for their employer’s investments in the best interest of their employer.
For employment relationships, a mere employee-employer relationship is not adequate. It has to be clear that the employee enjoyed a degree of confidence and trust from their employer. For example, a firm’s accountant enjoys a trust relationship, unlike an employer and the firm’s security officer.
- Situations where the property is transferred to another temporarily — An example would be valets being handed vehicles to park.
- Management relationships, where owners hand over the management of their property or money to another — For example, the relationship between an investor and their fund manager.
Fraudulent Use of the Property
When using another’s property, fraud occurs when said property benefits you to the owner’s disadvantage. These actions often lead to a breach of trust, duty of confidence.
Using another person’s property for different use but to the owner’s advantage is not embezzlement.
For embezzlement, your actions must have caused you an unfair advantage while causing a loss for the property’s owner.
For example, John receives funds from his boss to pay a supplier. However, John decided to buy office supplies that were needed urgently. While John did not use the funds for their original intended use, he did not violate PC 503.
However, if John used the funds to pay his rent, he would be guilty of embezzlement. He used company funds to offset his personal expenses.
Intent to Deprive
Intent to deprive another of the benefits they enjoy from their property is integral for a conviction. The intent must not be permanent. A temporary intent is enough to result in a conviction for embezzlement.
How does intent to return the property feature in an embezzlement case?
It is widely believed that a defendant can use their intention to return the property to the owner in their defense against PC 503 violation charges. This belief is a misconception. Intent to return the property is not a defense. However, you will not face charges under PC 503 if you returned the property before the charges were instituted.
Examples of Actions Considered as Embezzlement
It is worth looking at a few actions that fit PC 503’s definition of embezzlement.
For employer-employee relationships, the following actions by employees amount to embezzlement.
- Charging products at a price higher than the recommended and pocketing the difference
- Padding the expense account
- Borrowing funds from the register or company’s accounts
- Taking company’s supplies or inventory for personal use
- Transferring funds to private accounts
- Receiving kickbacks and bribes
- Depositing checks from vendors into personal accounts
- Adding a fictitious employee to the company payroll
- Manipulating account records to conceal illicit transactions
- Manipulating employee time records
- Transferring customer funds to personal accounts
The following activities amount to embezzlement for property or funds held in trust or managed through trust relationships.
- Adjusting records to conceal misappropriation of funds
- Using another’s social security check for personal ends
- Selling property and pocketing the proceeds without accounting for the transaction to your clients
- Using a client’s lawsuit award to offset operating expenses
- Stealing funds through a Ponzi scheme
Embezzlement by a Public Officer
Fraudulently using public funds or property in a manner inconsistent with an official obligation is a violation of PC 504. Actions inconsistent with an official obligation are diverse. Most people guilty of violating PC 504 use public funds or property for personal ends.
Penalties Embezzlement Charges Attract Upon Conviction
Penalties for embezzlement convictions are informed by the value and type of property misappropriated or stolen. Stolen, in this case, refers to using the property or funds to enjoy an undue personal advantage. Therefore, the penalties you receive upon conviction will be those described under PC 487, grand theft, or PC 488, petty theft.
Additionally, both PC 503 and 504 violations receive similar penalties. Both offenses are wobblers. It follows that you can either be charged for a misdemeanor or a felony violation.
PC 487, grand theft penalties will be issued if the value of the property or funds in the case exceeds $950, was a vehicle or a firearm. You will spend up to one year in jail if convicted of a misdemeanor grand theft violation. A felony charge will result in up to three years in jail. Both misdemeanor and felony grand theft offenses attract a $1,000 fine.
If the property in the case was a firearm, you could face 16 months, 2, or 3 years in prison. Additionally, you will receive a strike in your record because violations involving firearms are serious offenses.
If the property or funds in the case is less than $950, you will face petty theft penalties under PC 488. The offense is punishable by a jail sentence of up to six months. Additionally, the crime attracts a fine not exceeding $1,000.
If you are convicted of two or more felonies related to embezzlement in the same case, prosecutors will then invoke the use of PC 186.11. PC 186.11 requires prosecutors to prove the following:
- You committed two or more related felonies
- The actions under consideration include elements of embezzlement or fraud
- Your actions establish a pattern of involvement in felonious conduct
- Your efforts resulted in a combined loss of $100,000 or more
If found guilty, you will receive additional prison time to be served consecutively. The value of the property in the case determines the additional prison terms.
You will receive an additional one to two years in prison if the combined loss exceeds $100,000 but less than $500,000. Further, a fine will be imposed and will be the greater of $100,000 or double the value of the loss.
Up to five years will be added to your prison sentence if the value of the loss exceeds $500,000. Additionally, a fine, which is the greater of $500,000 or double the value of the taking, will be imposed.
You also risk facing additional penalties if the victim in your case was an elder or a dependent.
Additional Consequences of an Embezzlement Conviction
An embezzlement conviction will affect your immigration status and gun rights.
Under immigration law, certain crimes are labeled as inadmissible or deportable offenses. These crimes include felonies and aggravated felonies. A felony grand theft conviction will result in your deportation. Additionally, you will be marked as inadmissible.
Those convicted for felonies are prohibited from owning, acquiring, or possessing a firearm in California. Therefore, a felony grand theft conviction negatively impacts your gun rights.
An embezzlement conviction adversely impacts your life. Fines, jail, or prison time are not the only consequences you should worry about. A criminal record has far-reaching implications on your social, professional, and economic life. It is, therefore, in your best interest to hire an attorney to avoid or reduce the consequences of a conviction.
Fighting Embezzlement Charges
Defense strategies are arrived at after careful consideration of the circumstances of a case. Therefore, they can vary. A defense attorney will opt for one that maximizes the possibility of the best outcome. The following are the most common:
No Fraudulent Use of the Property or Funds
Fraud is pivotal for a conviction. Prosecutors must prove that you took unfair advantage of another, and through your actions, you breached trust and caused your victim to suffer loss. Therefore, if prosecutors fail to establish their case under fraudulent activity, your attorney will use this argument in your defense.
Good Faith Belief of a Right to the Property
Acting in a good faith belief, mistaken or unreasonable, that you were entitled to or had a right over the property or funds creates reasonable doubt. Therefore, you will not be held guilty of the crime if your attorney proves your innocence under this defense argument.
It should be noted that the facts of the case inform the judge and jury’s determination if your belief was warranted.
Your Intentions Were Not to Deprive
Your intention is also crucial for a conviction. If you lacked the intention to deprive the owner of their funds or property, you would not be found guilty. Your actions could have been simply a joke.
Offenses Related to Embezzlement
Certain offenses are closely related to embezzlement. They include:
- Misappropriation of public funds, a violation of PC 424
- Burglary, a violation of PC 459
- Forgery, a violation of PC 470
Misappropriation of Public Funds
According to PC 424, public funds can be misappropriated in several ways. They include:
- Appropriating public funds without the needed authority
- Profiting, misusing, or loaning public funds without authority
- Fraudulently altering, destroying, or falsifying accounts
- Decline to pay or transfer public funds
Appropriating Public Funds Without Authority
Prosecutors must prove particular elements in this form of misappropriation of public funds. It must be evident that:
- You were an officer employed by the state or local government — Alternatively, you were charged with receiving, safeguarding, transferring, or disbursing public funds. Public officials include government appointees, elected officials, rank-and-file government employees, attorneys, and accountants under the government’s employ.
The list also includes individuals who are not employed by the government but are entrusted with safeguarding, receiving, or disbursing public funds.
- You allocated public funds for personal or another person’s use without the law’s authority.
- You either were aware that your actions contravened the law or were criminally negligent in failing to establish whether you had the legal authority to disburse the funds — Knowledge in this context does not mean you knew all the details of the law. Knowing that the law prohibits your actions is enough.
On the other hand, criminal negligence refers to action beyond ordinary negligence. Actions like an error in judgment or failure to exercise reasonable care best describe ordinary negligence. However, for criminal negligence, your actions must have been reckless, aggravated, or gross.
Profiting, Misusing or Loaning Public Funds Without Authority
The following must be true under this form of misappropriation of public funds.
- You were an officer employed by the state or local government. Alternatively, you were charged with receiving, safeguarding, transferring, or disbursing public funds.
- You were prohibited from using public funds under certain circumstances or prohibited from loaning public funds by a non-penal law.
- You loaned out public funds, generated a profit from the funds, or used the money for a purpose not authorized by the law.
- You were aware that your actions were illegal, or you were criminally negligent in not establishing whether your actions were legal or not.
Fraudulently Altering, Destroying, or Falsifying Accounts
Knowingly tampering, falsifying accounts through entries or erasure relating to public funds violates PC 424. Additionally, concealing or obliterating accounts connected to the use or appropriation of public money is also a violation of the same law. Prosecutors need to produce further evidence to demonstrate that you committed the above actions to commit fraud or you to be found guilty under this section.
Declining to Pay or Transfer Public Funds
Payments regarding public money are to be paid according to the law without exception. Knowingly omitting to pay, refusing to transfer funds in your control when required to do so upon request or when presented with an order, draft, or warrant from competent authorities is considered a misappropriation of public funds.
Penalties Under PC 424
Most cases pursued by prosecutors involve significant sums of money. Therefore, you may avoid prosecution if the sums are relatively minuscule, often referred to as incidental and minimal amounts of funds.
Misappropriation of public funds is a felony violation. A conviction results in a two, three, or four-year jail or prison sentence. Probation is an option instead of time behind bars. Additionally, you will part with $10,000 in fines.
Entering another’s property or locked vehicle with the intent of committing petty, grand theft, or a felony offense is burglary as defined by PC 459. Property under this section refers to either a commercial or residential structure.
It must be clear that:
- You entered a room, building, or locked structure or vehicle
- You intended to commit a felony offense, petty, or grand theft at the time of accessing the property
- The property you intended to steal or stole was valued at $950 or more, or
- The property you gained access to was not a commercial establishment, or
- The property was a commercial establishment, but you accessed it outside business hours,
for you to be found guilty of the crime.
Intent is key in proving your culpability. Therefore, you need not have succeeded in stealing another’s property while in the building for you to be found guilty under PC 459.
You can either be charged with first or second-degree burglary. Charges of burglary in the first degree are pursued if the property was residential. Properties under this category include hotel or motel rooms, inhabited boats or houses, inhabited floating homes, or trailer coaches. Additionally, a room within an inhabited house or an inhabited portion of any other building is a residential structure.
For second-degree burglary charges, the structure has to be commercial.
When you enter a commercial establishment, within business hours, with the intent to steal a good worth $950 or less, you will face shoplifting charges. Your case will be prosecuted pursuant to PC 459.5.
Penalties Under PC 459
First-degree burglary is a felony offense. A conviction results in formal probation or two, four, or six years in prison. Additionally, you will have to part with up to $10,000 in fines. The offense is strikeable. Meaning, under California’s Three Strikes law, you will receive additional penalties if the first-degree burglary conviction is a subsequent strike on your record.
For second-degree convictions, they can result in either misdemeanor or felony penalties. Misdemeanor convictions are punishable by a one-year jail sentence. You can serve a summary probation sentence instead of going to jail. Additionally, you will have to pay a fine not exceeding $1,000. Felony convictions, on the other hand, are punishable by either formal probation or 16 months, 2, or 3 years in jail. You will also be required to pay up to $10,000 in fines.
Forgery’s definition under PC 470 is best described under the following activities:
- Altering, forging, or falsifying documents including a will, bonds, checks, money orders, contracts, lottery tickets, and property deeds.
- Signing a document in someone else’s name without their approval
- Falsifying or changing a legal document
- Forging or counterfeiting someone else’s handwriting or seal
You can only be found guilty of forgery if you intend to defraud your victim. That is, you deceived your victim into depriving them of their property, legal right, or money. If proven, you could either face misdemeanor or felony charges.
You can be found guilty of forgery even if no one is defrauded or no loss is incurred.
Penalties Under PC 470
Forgery is a wobbler offense. You can either be convicted on misdemeanor or felony charges. Misdemeanor violations result in summary probation or time in jail for up to one year. Additionally, a maximum of $1,000 fine will be imposed. Misdemeanor violations focus on specific forged documents, including money orders, checks, or similar instruments, whose value is no more than $950.
Felony offenses are punishable by formal probation or up to three years in jail. You will also be required to pay a fine not exceeding $10,000.
Expungement of an Embezzlement Conviction
An expungement would be only an option if you did not serve prison time. If you completed your probation or jail term, your attorney could help you expunge your conviction from your record.
What if I violated my probation terms?
Your conviction can still be expunged even if you violated the terms of your probation. The judge will exercise his/he authority to decide the fate of your application.
Contact a Anaheim Criminal Defense Criminal Attorney Near Me
Embezzlement convictions have far-reaching consequences beyond time behind bars and fines. Securing employment, owning a home, and loss of trust among friends, family, and colleagues are some of the aspects of your life that will be negatively impacted. Having a reputable attorney defending you against these charges increases the possibility of a favorable outcome. The California Criminal Lawyer Group is experienced in handling embezzlement cases. This experience has resulted in the dismissal or reduced charges of our client’s cases.
Contact our Anaheim team at 714-766-0965 if you are under investigation for embezzlement or face prosecution for the same.