Embezzlement is a serious crime in California. Despite facing a sentence or incurring fines, you may end up with a criminal record showing that you were charged with embezzlement. Such a record would affect your employment since potential employers would be reluctant to hire someone with a theft-related offense. Thus, you should seek legal help as early as possible, and work closely with your attorney to help in your defense. If you are in Los Angeles, we invite you to contact the LA Criminal Defense Attorney in case you are facing embezzlement or related charges.
What is Considered Embezzlement in California?
Embezzlement is defined in Penal Code 503 of the state of California as the misappropriation of funds or property that belongs to someone else. This is done by an individual to which the property was entrusted. This is a white-collar offense and a type of theft offense otherwise known as employee theft. The crime of embezzlement is on the basis that the defendant had authorized access to someone else’s property or funds but did not have its legal ownership. Additionally, the property has to be entrusted to the defendant. For instance, if the defendant took funds or property for his/her personal gain, then it would be stealing. However, if that stealing occurred in violation of a special level of trust, it qualifies to be a crime of embezzlement.
The crime of embezzlement takes many forms. For instance, when a county, state or municipal official who is entrusted with taxpayers’ money decides to use that money for his/her own gain, such persons would be charged under Penal Code 504. Private and public entities who defraud their clients a given sum of money are also violating the provisions under Penal Code 503. Also, there have been many cases of family members caring for their loved ones being accused of embezzlement in Los Angeles. For example, a family attorney fighting a case for one of his/her relatives, a family doctor entrusted to treat a member of the family or a family member entrusted with money to take care of an aging person or a child. Embezzlement can also occur across different job types and among people of different relationships and it involves both large and small sums of money or property. Note that you can face charges of embezzlement even if you were only borrowing the property in question temporarily and did not intend to keep it.
Key Elements of an Embezzlement Crime (What a Prosecutor Must Prove)
- Relationship of trust
You will only be convicted of embezzlement if the owner of the property gave it to you because s/he trusted you. The property owner might have trusted you because you are his/her employee, or you are a board member, a trustee of an institution and you had the right to manage that property. Working for your employer alone is not enough proof that you had a relationship of trust. The prosecutor must provide solid proof of existing trust between you and your employer.
- The element of fraud
The prosecution needs to prove beyond doubt that when you were entrusted with property or money, you used it in a fraudulent manner and for self-gain in order for the owner to incur losses or damages. This is to mean that you will not be guilty of embezzlement if by using the property you did not bring any loss to the property owner, you did not damage the property neither did you benefit in any way.
- Intent to deprive the property owner of its use
The prosecution must demonstrate that when taking that property you had every intention of denying the owner the right to use the property. This is exhibited when you use the property to enrich yourself. For instance, if your boss gives you money to deposit for him in his bank account then you deposit in yours instead, the boss has a right to accuse you of embezzlement. Note that the deprivation of the property need not be permanent for you to be prosecuted. You will be in violation of Penal Code 503 even if you deprived the property owner of its use for a short period of time. In addition, the fact that you intended to return the property is not considered a valid defense.
What Differentiates Embezzlement from Theft?
These two crimes involve an unauthorized taking of funds or property. The main factor that differentiates them, however, is the element of trust which legally defines an embezzlement offense. The crime of embezzlement is charged under Penal Code 503 and not Penal Code 484 which dictates that ‘a person who misappropriates property or money entrusted to him/her is guilty of theft.’ This is because due to the level of trust, Penal Code 503 goes ahead and classifies embezzlement as a more serious and severe kind of theft.
Penalties for Embezzlement
Embezzlement is a wobbler offense and its punishments depend on the type and the value of the property in question. Where the value of the property was less than $950, the crime becomes a misdemeanor and if the money or property value is worth $950 or more, it becomes a felony. This crime can be charged under either petty theft or grand theft embezzlement.
Penalties for grand theft embezzlement
If found guilty of grand theft embezzlement, you will face the punishments of grand theft under Penal Code 487. It qualifies to be grand theft embezzlement if;
- The property value is more than $950
- The property was an automobile (grand theft auto)
- The property was a firearm (grand theft firearm)
Note that if you embezzle multiple sums that are less than $950 but the sums come to add up to $950 or more within a one-year period, you will face charges of grand theft embezzlement. You can be convicted as either a felony or a misdemeanor offender depending on the criminal history of the defendant and the circumstances surrounding the case. However, it is always a felony grand theft embezzlement in the event that the property was a firearm.
Grand theft embezzlement as a misdemeanor is punishable by summary probation and/or a maximum of one-year imprisonment in county jail, and/or a fine not exceeding $1,000. Grand theft embezzlement as a felony is punishable by formal probation, 16 months, 2 or 3 years imprisonment in county jail and/or a maximum fine of $10,000. If it is grand theft embezzlement of a firearm, the penalty is 16 months, 2, or 3 years imprisonment in state prison, a maximum fine of $10, 000 and/or formal probation.
Penalties for petty theft embezzlement
This is any form of embezzlement that does not meet the definition of grand theft embezzlement. This is punishable under Penal Code 488 petty theft. It is treated a misdemeanor offense and its penalties include;
- Summary probation
- A maximum period of 6 months imprisonment in a county jail
- A fine of not more than $1,000
- Both ii and iii
If in the commission of the crime the victim suffered a huge-value property loss, you will face an additional prison term. The possible sentence enhancements include;
- An extra 2 years in case the property value exceeded $200,000
- An additional one-year in case the property value was more than $65,000
- An additional 3 years in case the property value was $1.3 million and
- An extra 4 years in case the value of the property amounted to $3.2 million
Aggravating and Mitigating Factors to an Embezzlement Offense
These are factors that determine conviction. For instance, you will face a tougher sentence in case the victim was a senior citizen or a person with a physical or a mental disability that limits their daily activities. In this case, you can face additional charges of abuse of an elderly (Penal Code 368) or face extreme punishment if the victim with the disability was dependent. On the other hand, you will face a lenient punishment if you willingly gave back the property you are alleged to have embezzled before you are charged with the crime. Returning property does not shield you from being convicted.
Can an Embezzlement Conviction be Expunged?
Expungement is whereby your record of embezzlement conviction is deleted from the databases of companies responsible to perform criminal background checks. Even if the record is erased, your court files are kept on other law enforcement records which may be used as a consideration when applying for employment or licensing and to enhance your sentence in case of a subsequent crime. Your embezzlement offense records may be expunged if you have not had any criminal record and you have not served any time in state prison for a similar charge.
As earlier explained, grand theft embezzlement is always charged as a felony if an automobile or a firearm is the stolen item. For this, therefore, your records will not be expunged. Rather, you will be eligible for other post-conviction relief.
For other embezzlement cases, if it is a wobbler crime and you are charged with a felony, your attorney could negotiate and have it reduced to a misdemeanor before being expunged as per Penal Code 17(b)(3). This is because a misdemeanor is a less offense and you will not be deprived of any civil rights. However, some employers might still treat it as a negative consideration when deciding to hire you.
If you haven’t served time in state prison for an embezzlement conviction, your attorney can petition for expungement as long as the following is true:
- There are no pending criminal charges against you
- You adhered to probation terms and conditions
- You have no record of other felony crimes
An expungement has the following effects;
- You don’t have to reveal your conviction if you are contesting for public office or applying for a license to be an employee of the State Lottery Commission.
- When applying for employment, you can state that you have never been convicted of any crime, either a felony or a misdemeanor
- You can state under oath on any legal document or court proceedings that you have no criminal record except if you are facing subsequent felony charges
- You can apply for a position in the military or in the law enforcement provided you state your conviction which is not a disqualifying factor so long as the conviction was of a misdemeanor offense
- For non-California citizens seeking permanent residency, expungement can have a positive effect on their immigration status
- It is possible to apply for a state license. For example a real estate or a contractor’s license.
Application for expungement is made the day after you complete your probation. If there was no probation, the application is done after one year from the date you were convicted.
Legal Defenses to Embezzlement Charges
As earlier stated, an embezzlement conviction can have a negative impact on your personal and professional life. Therefore, once accused, you need to find a good attorney who will expertly argue a number of defenses that could get your charges dismissed or reduced. These legal defenses include:
- A good faith belief to property entitlement
According to the laws of the state of California, if you had a reasonable belief, even if it was a wrong one, that the property rightfully belonged to you then your charges might be dismissed. The basis of this defense is on the fact that when taking the property, you did not use secretive means but did so publicly and neither did you take it because the owner owes you a debt.
- You had no criminal intent
One of the elements of embezzlement is the intent to deprive the property owner of its use. For you to be convicted, the prosecutor must present evidence that you intended to temporarily or permanently deny the victim the use of their property. Due to the fact that embezzlement charges can involve long financial records and paper information it may be difficult for the prosecutor to produce concrete proof. This is a strong defense because in most cases, the judge will believe that what might have been a case of embezzlement is nothing but a mistake in data recordings.
- A false accusation
In Los Angeles, it is a common occurrence for business partners or family members to accuse each other of embezzlement especially if both parties have the right to possess or an interest in a certain property. You might be falsely accused by individual seeking revenge or due to jealousy. You can also be falsely accused if funds under your watch are mismanaged because everyone believes you took part in the misappropriation even if you didn’t. An experienced criminal attorney can get your charges dropped if s/he proves that you were wrongfully accused.
- The plaintiff did not make any demands to request the return of the property
While demand is not an element of embezzlement in California, the property owner should make a written request or a demand that his/her property be returned to him/her. If the defendant refused to adhere to the request then it may show his/her criminal intent. If the property owner did not make any demand, the defendant may apply a defense of neglect or provide any other legal reason for not returning the property.
Related Offenses to Embezzlement
There are several offenses that relate to embezzlement with the only difference being the element of a relationship of trust. They include;
- Petty theft (Penal Code 484)
This involves taking someone else’s property or money without authorization. The value of the property or money that was taken should be less than $950. If it is a livestock theft, the value should not be more than $250. Petty theft is a misdemeanor offense. It attracts a penalty of 6 months imprisonment and a fine not exceeding $1,000. If the value of the stolen property is less than $50 dollars, the defendant will incur a fine of $250.
- Burglary (Penal Code 459)
California law defines burglary as entering a building or someone’s property without permission with the intention to commit theft or any crime once inside. You could face both burglary and embezzlement charges if you entered a structure without permission with the intention of embezzling funds. The prosecutor must present evidence that you broke into a room, a structure or a locked vehicle with the purpose of committing theft. Burglary is classified into first and second-degree. The first-degree burglary involves entering an inhabited building and attracts a penalty of up to 6 years imprisonment. Second-degree burglary is breaking into an uninhabited structure and is punishable by up to 3 years’ incarceration. Burglary is also a wobbler offense.
- Grand Theft (Penal Code 487a)
This form of theft involves taking huge-value property or money that belonged to someone else without their permission. The value of the property must be more than $950 for you to be convicted of grand theft. The crime is a wobbler offense which means it can be charged as a misdemeanor or a felony. Misdemeanor grand theft carries a penalty of a maximum of one-year imprisonment in county jail and a fine not exceeding $1,000. A felony grand theft is punishable by up to three years imprisonment and a fine not exceeding $10,000.
- Forgery (Penal Code 470)
Forgery entails deliberately creating, altering or using a written document with the intention to commit fraud. For you to be convicted of forgery, the prosecutor must prove that you intended to swindle the victim by using a forged written document. S/he must also ascertain that the document was altered to your advantage. You can face both embezzlement and forgery charges if, for example, you forge someone else’s signature on a check and then impersonate that person to cash the check. This is a wobbler offense. A misdemeanor forgery occurs when the amount in question is less than $950 and it carries a penalty of up to one-year incarceration in county jail. A felony forgery carries a punishment of 16 months, 2 or 3 years imprisonment in county jail.
- Receiving stolen property (Penal Code 496a)
Receiving stolen property involves assuming custody of property that does not belong to you. The prosecution must prove that the owner of the property did not grant permission to have their property under your custody. This is a common charge but in most cases, the prosecutors are not able to provide evidence of how the property was stolen. Thus, California law centers on who is in real possession of that property after it has been stolen. You may also face charges of theft alongside those of receiving stolen property.
- Misappropriation of public funds (Penal Code 424)
This offense is closely related to embezzlement. It occurs when someone in charge of public funds, usually but not limited to a government employee, misappropriates the funds or loans them out without permission to do so. Any person who fraudulently alters or fabricates financial records relating to public funds will also be in violation of Penal Code 424. For one to be convicted of this crime, the prosecution must prove that the defendant knew his/her actions were illegal or s/he failed to find out whether his/her actions were legal therefore displaying criminal negligence. This is a felony offense and is punishable by 2, 3 or 4 years imprisonment in state prison. Note that Penal Code 424 misappropriation of public funds does not apply to minimal and incidental amounts of money.
- Fraud crimes (Penal Code 476)
A fraud crime is committed when you commit an act that you stand to benefit yourself unfairly and cause loss or damage to others. Fraud crimes can be prosecuted under embezzlement laws while others have their own specific laws. Some of the fraud crimes under California laws include real estate fraud, mail fraud, check fraud, and insurance fraud.