Embezzlement

Embezzlement, classified under white-collar crimes, is punishable under California Penal Code Section 503. You commit this offense when you fraudulently appropriate property entrusted to you. Often misconstrued as a crime exclusively committed by high-level executives in large-scale financial schemes, embezzlement, in reality, encompasses a broader spectrum. It includes various forms of employee theft where individuals in positions of trust, whether in large corporations or small businesses, misappropriate funds or assets.

The fundamental distinction between embezzlement and other theft crimes lies in the legal requirement of trust. The property must have been entrusted to you by its owner. This entrustment implies a relationship of trust, typically found in employer-employee dynamics or scenarios where individuals are given authority over someone else's property or finances.

The legal consequences of a conviction vary depending on the value and nature of the misappropriated property. Embezzlement can be classified as petty or grand theft, with penalties ranging from misdemeanor to felony charges for larger-scale embezzlements.

Defendants facing charges for violating PC 503 should seek the assistance of competent criminal defense attorneys. At Monterey Criminal Attorney, we specialize in this field and can build various defense strategies to challenge the allegations against you.

Definition of Embezzlement Under California Law

Under California PC 503, you commit embezzlement when you fraudulently appropriate property entrusted to you. This legal definition demonstrates a key element of embezzlement, which is the trust factor. To face embezzlement charges, the value of the appropriated property must exceed $950, constituting a felony. Otherwise, the crime is charged as a misdemeanor.

For a successful conviction, the prosecution must establish four case elements:

The property owner entrusted their property to you.
This trust was the basis for the property being entrusted.
You used or converted the property fraudulently for personal gain.
Your actions were driven by the intent to temporarily deprive the property owner of its use.

A Relationship of Trust

Under California PC 503, this concept is central to the crime of embezzlement. This relationship exists when property is entrusted to an individual due to the owner's trust. Common scenarios include the following:

Employer-Employee Trust. When an employee is given control over an employer's property or funds, a trust relationship is established. However, merely being an employee is not sufficient for embezzlement charges. There must be enough evidence of confidence or trust.
Temporary Possession. Instances where the property is temporarily handed over, such as valet services or borrowing items, can constitute a trust relationship.
Management of Property or Money. People who manage other people's property or finances are in a trust-based relationship, making them potential subjects for embezzlement charges if they misuse the property.

This relationship is a key factor in distinguishing embezzlement from other types of theft, emphasizing the betrayal of trust as a core element of the crime.

Fraudulently Used

"Fraudulently used" refers to misappropriating entrusted property for personal benefit. Two main actions characterize this misuse:

Taking Undue Advantage. This occurs when the entrusted individual exploits their position or the property for personal gain beyond the scope of the trust granted by the property owner.
Causing a Loss through Breach of Trust. This involves actions that result in a loss to the property owner due to the violation of trust, duty, or confidence initially placed in the individual.

The element of fraudulent use distinguishes embezzlement from mere possession or handling of another’s property. It signifies the betrayal inherent in embezzlement, where the perpetrator abuses their trust for personal gain, leading to loss or harm to the property owner.

The Intention to Deprive

Under California PC 503, this element is critical in embezzlement cases. This intent refers to the accused's purpose to deprive the property owner of their property or its use, even if the intent is only temporary. A key aspect of this element is that a short-term intention to deprive can also lead to embezzlement charges.

The law does not require the intent to be permanent. For example, if someone takes property temporarily, intending to keep it as their own, even briefly, it qualifies as embezzlement. However, an intention to return it when taking it is not typically a valid defense unless the property was restored before charges were filed.

Defenses to PC 503 Charges

Under Penal Code 503, several legal defenses can be employed against embezzlement charges:

You did not use the Property Fraudulently

In California, a primary defense is demonstrating the absence of fraudulent use of the entrusted property. This defense asserts that you did not take undue advantage of the property owner and cause a loss to them by breaching a duty or confidence.

To successfully use this defense, you must show that your actions concerning the property were neither deceptive nor exploitative of the trust placed in it by the owner. The burden is on the accused to prove their actions did not constitute an abuse of the trust inherent in their relationship with the property owner.

Claim of Right To Property

The assertion of a good-faith belief involves proving that you genuinely believed you had the authority or permission to use the property as you did. The court evaluates this defense by examining the facts surrounding the case. Note that this belief can be considered valid even if it turns out to be unreasonable or mistaken, as long as it was held in good faith at the time of the alleged embezzlement.

You did not Intend To Deprive

Another legal defense in embezzlement cases, with no intention to deprive the owner of their property, is centered around the argument that you did not have the purpose or intention to permanently or temporarily deprive the property owner of their property or its use.

The defense can be applied in situations where the action might have been misconstrued as embezzlement, but there was no actual intent to take away the property from its rightful owner. Demonstrating a lack of this intent can effectively counteract embezzlement charges.

Insufficient Evidence

The "insufficient evidence" defense hinges on highlighting weaknesses, gaps, or ambiguities in the prosecution's case. Direct evidence that unambiguously links the defendant to the crime might be absent. For example, there might be no direct witness testimony or video evidence showing you appropriated funds or property.

Often, the prosecution relies on circumstantial evidence, which requires interpretation. If this evidence is open to multiple reasonable interpretations, some of which are consistent with the defendant's innocence, this can be a strong point in the defense. The defense may aim to undermine the reliability of prosecution witnesses. This can involve highlighting inconsistencies in their testimony or questioning their motives.

In embezzlement cases, financial records are crucial. Demonstrating inaccuracies or inconsistencies in these documents can be a key defense strategy. Any forensic methods used by the prosecution can be scrutinized for their accuracy and the validity of their application in the specific case. Evidence obtained for violating the defendant's constitutional rights, like illegal searches, can be suppressed.

You Had Consent

You could use this legal defense if the alleged wrongful act was, in fact, permissible due to the owner's consent. The defense hinges on proving that the property owner explicitly allowed you to use or take the property. This consent must be unequivocal.

The owner's consent must be given with full knowledge and understanding of the circumstances surrounding the use or taking of the property. Consent should not result from deception, misrepresentation, or a lack of awareness. Consent must be given freely, without coercion, duress, or undue influence. It is not legally valid if the consent was obtained through pressure or manipulation.

The defense also depends on the scope of the consent given. For instance, if the owner consented to use the property under specific conditions or for a particular purpose and the defendant exceeded these terms, the defense may not apply.

In embezzlement and similar cases, if you had permission to use or take the property, it negates the intent to defraud, which is a critical component of such offenses. The defendant must provide evidence of consent, including written agreements, communications, or witness testimony. The strength of this evidence can significantly influence the defense's effectiveness.

Punishment, Sentencing, and Penalties For a PC 503 Violation

In California, the punishment for embezzlement depends on the misappropriated property’s type and value. The offense is categorized and penalized as grand or petty theft:

Grand Theft - The offense is considered grand theft when the embezzled property is a firearm, a vehicle, or something valued over $950. This is considered a "wobbler," so it could be classified as a misdemeanor or felony. If charged as a misdemeanor, it carries a sentence of not more than one year in county jail. If charged with a felony, the offender faces not more than a three-year jail sentence.
Petty Theft - Embezzlement is charged as misdemeanor petty theft for property valued at $950 or lower. The punishment for petty theft embezzlement as a misdemeanor is serving time in jail, not more than six months.

Immigration Consequences For An Embezzlement Charge

A conviction for a PC 503 violation could have severe immigration consequences in the United States. According to U.S. immigration law, certain criminal convictions may result in an immigrant being deported or marked as inadmissible.

Specifically, crimes termed "aggravated felonies" include certain types of embezzlement. If an immigrant is charged with felony grand theft embezzlement and the case qualifies the felony as an aggravated felony, the individual could face significant immigration repercussions, including the possibility of deportation or being declared inadmissible to the United States.

Expunging Your PC 503 Conviction

In California, individuals convicted of PC 503 violations could be eligible for expungement. Eligibility for expungement depends on completing certain requirements, including:

Successful Completion of Probation. You are eligible for expungement if you were placed on probation and completed it.
Completion of Jail Term. If your sentence included jail time and you completed this term, you may be eligible for expungement.

Even if you violated a term of your probation, you might still be eligible for expungement, but this would be subject to the judge's discretion. Per PC 1203.4, expungement effectively releases you from almost all penalties and disabilities resulting from the conviction.

The Difference Between Grand Theft and Embezzlement

The primary distinction between embezzlement and grand theft lies in the trust and the circumstances of the property's acquisition:

Embezzlement involves stealing property or money entrusted to you. Embezzlement is specific to scenarios where the accused had lawful access to the property due to a relationship of trust.
Grand theft pertains to stealing property or money not entrusted to you. Grand theft covers instances like shoplifting or taking property without being given lawful access or trust.

For example, a cashier who takes money from a register is committing embezzlement because they were entrusted with handling that money. In contrast, a person who shoplifts an item from a store is committing grand theft, as they were never entrusted with it.

Interestingly, while there is a clear difference between the two crimes, in California, embezzlement and grand theft carry identical penalties.

Related Offenses to Embezzlement Offense

Embezzlement has several offenses closely related to its elements, including:

Burglary, California Penal Code 459

Burglary under PC 459 is legally defined by the following elements:

Entering a Structure. This includes any building, room, locked vehicle, or structure.
Intent to Commit Theft or Felony. At the time of entry, the individual must intend to commit either a theft, including grand or petty theft, or any felony.
Value or Type of Structure. Certain conditions, such as the value of the stolen property exceeding $950 or the type of structure entered as commercial or non-commercial, impact the classification of the burglary.

First-degree burglary involving residential burglary is always considered a felony. Penalties include felony probation, 2 to 6 years in state prison, and fines up to $10,000. Additional years may be added for vulnerable victims or previous felony convictions. First-degree burglary counts as a strike under California’s Three Strikes law.

Legal defenses for the offense could include:

An argument that you had zero intention to commit a theft or felony when entering the structure.
Mistake of Fact. Asserting a belief that one had permission to take the item or thought it belonged to them.
Mistaken Identity or False Accusations. Challenging the identity of the perpetrator or the validity of the accusations.
Police Misconduct. Alleging violations of rights such as fabricating evidence or coercing confessions.

Forgery, California Penal Code 470

Burglary is punishable under California Penal Code 459. You commit the offense when you enter a structure, including any building, room, locked vehicle, or structure. At the time of entry, you must intend to commit either theft (grand or petty theft) or a felony.

Certain conditions, such as the value of the stolen property exceeding $950 or the type of structure entered (commercial or non-commercial), impact the classification of the burglary. The penalties include:

First-degree burglary, involving residential burglary, is considered a felony. Penalties include felony probation, 2 to 6 years in state prison, and fines up to $10,000. Additional years may be added for vulnerable victims or those with previous felony convictions. First-degree burglary counts as a strike under California’s Three Strikes law.

You can fight your burglary charges by employing legal defenses such as:

Lack of intent.
Mistake of fact.
Mistaken identity.
False accusations.
Police misconduct.

Misappropriation Of Public Funds, California Penal Code 424

Misappropriating public funds occurs when you appropriate public funds without authority. This occurs when a public officer or someone responsible for public funds uses these funds for personal use or someone else without legal authority. Elements of this crime include being a government officer or someone in charge of public funds and knowingly misappropriating these funds without legal authorization.

You also violate PC 424 for unauthorized loans of public money, profiting from public money, or using public money not authorized by law to fall under this category. It involves knowing or being criminally negligent about the illegality of the actions.

Another act that constitutes Keeping materially false accounts, making false entries or erasures in accounts relating to public money, or intentionally tampering with such accounts to commit fraud constitutes this form of misappropriation.

Refusing to pay or transfer public funds can also cause you to face criminal charges. This involves willfully refusing or omitting to pay or transfer public money under your control when required by law to do so. However, California law provides an exception for misusing public funds if the amounts involved are incidental and minimal.

Misappropriating public funds is a felony punishable by up to 4 years in jail or prison, fines of up to $10,000, and permanent disqualification from holding public office.

Legal defenses to the offense include a lack of required criminal intent or negligence and the misappropriated funds being incidental and minimal.

Misappropriation or Embezzlement by a Public Officer, California Penal Code 504

California Penal Code 504 addresses embezzlement or misappropriation by public officers. This statute is invoked when public officers fraudulently use public property, resources, or funds beyond their official authority. Examples include a mayor selling public lands for personal gain, a secretary diverting public funds, or a transportation head giving a city car to a family member for personal use.

Violating PC 504 is treated as grand or petty theft, contingent on the value and type of property involved. As a wobbler, charges can be filed as either a misdemeanor or a felony. Misdemeanor penalties include not over one year in jail and fines not exceeding $1,000.

Felony penalties entail 16 months to three years in jail and up to $10,000 in fines. Judges may grant probation with possible requirements like restitution, community service, or counseling. Petty theft charges apply for amounts less than $950, with a maximum sentence of six months in county jail.

Defenses against charges under PC 504 include:

Not being a public officer.
Not committing fraud.
Acting under duress.

Negotiating with the district attorney for reduced charges or dismissal may be possible, depending on the case.

Civil Remedies For Embezzlement Victims

Victims of embezzlement under California Penal Code 503 PC have several avenues for seeking civil remedies, including:

Filing a Civil Lawsuit

Victims can file a civil lawsuit for monetary damages against the embezzler. Common claims in such lawsuits include unjust enrichment, conversion, and breach of contract. If the victim wins the lawsuit, the judge may order the embezzler to pay full restitution of the damages.

Additionally, the court may establish a constructive trust to return the money. This option is particularly relevant when the embezzled funds involve a breach of fiduciary duty, as in the case of Bernie Madoff's Ponzi scheme.

Seeking Payment from the California Victim Compensation Board (CalVCP)

For victims of violent crimes, including those that may involve embezzlement, there is an option to seek compensation from the CalVCP. This board assists victims and their families in recovering losses incurred due to the crime.

Obtaining Restitution from the California Criminal Court

If the perpetrator is found or pleads guilty in a criminal court, the judge could order that you pay restitution to the embezzlement victim. This restitution is part of the criminal process and is separate from any civil lawsuits the victim may file.

Domestic Violence Victims Leave from Work

Although not directly related to embezzlement, this option is available for victims of domestic violence, which can include financial abuse or embezzlement within domestic relationships.

Victims do not need to choose one approach over the others; they can pursue all these remedies simultaneously. Civil remedies provide an additional layer of recourse for victims to recover their losses and hold the embezzler accountable beyond the scope of criminal prosecution.

Find a Criminal Attorney Near Me

In California, a Penal Code 503 violation is harshly prosecuted. Embezzlement, defined as the fraudulent appropriation of property by a person entrusted with it, can lead to substantial legal consequences, including misdemeanor or felony charges based on the value of the embezzled property. Legal defenses like lack of intent, good faith belief, or false allegations require skilled legal interpretation and presentation.

Given the consequences of a conviction, if you are facing charges for violating PC 503, you should seek the expertise of a criminal lawyer. At Monterey Criminal Attorney, we can provide critical guidance and representation. We are adept at navigating the nuances of embezzlement cases, examining the details of the allegations, and formulating effective defense strategies.

We understand the significant impact these charges can have on your life. We work diligently to secure the best possible outcome, whether challenging the prosecution's evidence, negotiating plea deals, or representing clients in court. Contact us at 831-574-1791 today for your case representation.