The California PC 503 defines embezzlement as illegally taking property, which is entrusted to you intending to deprive the legal owner of the use of the property. If you embezzle money or property that has a value of more than $950, you will be guilty of a felony. Embezzlement is a form of fraud that falls under California white-collar crimes. The crime mainly involves employees in different establishments, like retail and banking industries. The employees take advantage of the trust their employers have in them and end up embezzling money and property from the employers. The LA Criminal Defense Law Firm can help you fight embezzlement charges if you are facing charges for the crime.
Elements of Embezzlement
There are many ways of committing embezzlement, including issuing payroll checks to false employees and taking money from a till. You can be guilty of embezzlement if you falsify financial records or engage in fraudulent billing. The prosecutor has to prove several elements of the crime:
The prosecutor has to prove the existence of a fiduciary relationship between the defendant and the victim. The victim must have entrusted his/her property to the perpetrator of the crime
The defendant must have obtained the property by taking advantage of the said fiduciary relationship
The defendant must have used or fraudulently converted the property for his/her benefit
The defendant had the intent to deprive the rightful owner of the use of the property
It is easy for the prosecutor to accuse you of embezzlement. However, it is not easy for the prosecutor to prove all the four elements of the crime. The prosecutor has a heavy burden of proof to show beyond doubt that you are guilty of this crime. Therefore, if you have a competitive criminal attorney by your side, it is possible to fight the charges.
You could still be guilty of the crime even if the victim did not request you to return his/her property. The prosecutor does not have the burden to prove that the property owner requested the defendant to return the property.
The crime of embezzlement requires a fiduciary relationship or a relationship of trust to exist between the victim and the defendant. It should be evident that the property owner had entrusted the property to the defendant. A fiduciary relationship exists if the defendant is the property owner’s employee. If the property owner had given the defendant a temporary right to possess the property, a fiduciary relationship existed. If the defendant is responsible for managing the victim’s property or money, a fiduciary relationship exists between the two.
It is important to note that a mere fact that the defendant is an employee of the victim is not enough to prove that a fiduciary relationship existed. The prosecutor must be able to prove that there was concrete confidence and trust between the defendant and the victim. For example, in a hotel, a fiduciary relationship may not exist between the hotel owner and an employee responsible for serving food. However, a fiduciary relationship exists between the hotel owner and the hotel accountant, who is responsible for handling the hotel finances.
Fraudulent Use of Property
You could be guilty of using property fraudulently if you take unreasonable advantage of the property owner. If you breach trust, confidence, or a duty bestowed upon you and cause a loss to the property owner, you could be guilty of fraudulent property use.
Depriving the Owner of the Property
You can't be guilty of embezzlement if you did not intend to deprive the property owner of the property or the use of the property. You could be guilty even if you intended to deprive the owner of the property for a short period. A temporal intent to deprive the victim of the property is enough to earn you embezzlement charges.
Common Forms of Embezzlement
All businesses, including small businesses, are at risk of embezzlement. In most cases, the perpetrators of the crime are employees, bookkeepers, and family members. No person or company is immune to embezzlement. Embezzlement happens to unsuspecting people because most employers believe that their employees cannot steal from them. However, many times, employees manage to take company funds without raising suspicion. The majority of all forms of embezzlement involve employees stealing from their employers.
With the advancement of technology, it is becoming easier for employers to identify employees who engage in embezzlement. Employers are utilizing advanced accounting software to catch people who channel money from the business. The advanced software limits employees’ access while allowing business owners to monitor finances and employee activities.
Employees abuse their position of trust or access and end up stealing from their employers. It is a form of insider stealing. Embezzlement is different from shoplifting, which is theft by outsiders. Most employees who engage in embezzlement are usually the most competent and diligent in performing their duties. This makes it hard for employers to suspect foul play. Due to the valued contribution of the employees to a firm, they can embezzle millions of dollars from unsuspecting employers. Some of the common ways of committing embezzlement are:
Charging Lower Prices
Employees can steal from a business by undercharging products offered to their friends and families. This form of embezzlement mainly occurs in retail firms, especially if there is no keen scrutiny of the record books. The employees can steal the profits of a company for their gain by undercharging friends and family.
Making Payment to Non-Existent Suppliers
It is common for employees to set up ghost suppliers and to come up with fake documents to support transactions with the ghost businesses. For instance, you can embezzle from a company if you make payments to fake suppliers, while in the real sense, you are channeling the money to yourself. You can then use the money paid to ghost suppliers for your benefit.
Making Fake Refunds
This form of embezzlement is common among E-commerce businesses. An employee can embezzle from the employer by issuing a refund to a non-existent customer. An employee will issue this refund only to get the money to him/herself.
Fraudulent Acquisition of Office Supplies
Embezzlement does not have to involve cash. You could be guilty of embezzlement if you steal office supplies from your employer. For instance, you could use office supplies, postage stamps, or office equipment for your gain. You could be guilty of embezzlement if you make long-distance or costly phone calls and charge your phone bills to the company.
Coming Up With Fictitious Bad Debts
It is common for employees to commit fraud by coming up with fictitious bad debts. For instance, if you work as a bookkeeper or an accountant, you could deposit a client’s check in your account and record the check as a bad debt. You can go ahead and pretend that the client did not pay the debt and even recommend the debt for a write-off. You can then go ahead and enjoy the proceeds of the check you deposited in your account. This act could earn you embezzlement charges.
Committing Payroll Fraud
Employees often commit embezzlement through payroll fraud. This could entail adding ghost employees, mainly your relatives, to the payroll. You can then send regular, fraudulent paychecks to the non-existent employees and use the money for your gain.
Consequences for Embezzlement
California law punishes the crime of embezzlement as either grand theft according to PC 487 or petty theft, according to PC 488. The penalties for embezzlement will depend on the amount of money or the value of property stolen. The prosecutor will charge the crime as grand theft if the money or the property you acquire exceeds a value of $950. If the embezzlement involves an automobile or a firearm, grand theft charges will apply.
A grand theft crime is a wobbler, which could attract misdemeanor or felony charges. If the crime is a misdemeanor, penalties include imprisonment in a county jail for not more than one year. If the crime is a felony, you could spend up to three years in county jail.
You will be guilty of petty theft if you engage in embezzlement, but the value of the property acquired is $950 or less. Petty theft is a misdemeanor offense, and the penalties for the offense include custody in a California jail for not more than six months.
Typically, a fine and restitution may also be part of the penalties for the crime of embezzlement. The victim can pursue an embezzlement case through a criminal court as well as a civil court. The state can prosecute the case, and an employer can sue an employee who commits this crime to seek compensation.
Embezzlement is a severe crime in California. Therefore, if the prosecutor accuses you of committing the crime, you should seek the counsel of an experienced attorney to help you fight the charges. A conviction for the crime has detrimental consequences that could have far-reaching impacts on your life.
A conviction for embezzlement under PC 503 could have negative immigration consequences. According to the United States Immigration law, certain types of criminal convictions could lead to deportation for people who are not U.S citizens. If you are a non-citizen and you commit the crime of embezzlement, you could be inadmissible into the United States.
Aggravated felonies are inadmissible or deportable crimes. Therefore, immigration consequences will apply if the prosecutor charges you with felony embezzlement and if the facts of your case indicate that the felony is an aggravated felony. These factors could have negative immigration results. To help mitigate the negative immigration consequences, you should seek the counsel of an attorney immediately after accusation.
Embezzlement and Gun Rights
A conviction under California PC 503 could have negative impacts on your gun rights. According to California law, persons convicted of a felony might not have the right to acquire or possess a gun in California. You could lose your right to possess or own a gun if the prosecutor charges you with a grand theft felony for committing embezzlement under PC 503. You will lose your gun rights after a conviction for the offense. Therefore, if you can fight for a reduction or dismissal of the embezzlement charges, you could still be able to retain your gun rights.
A victim can also file a civil lawsuit against the defendant who commits the crime of embezzlement. Some of the possible forms of civil lawsuits that the victim can bring against the defendant include breach of contract, unjust enrichment, and breach of contract. It is possible to resolve most civil cases through negotiation. If the victim wins a civil lawsuit, the defendant might have to pay restitution or return the embezzled funds to the victim.
Expungement of an Embezzlement Conviction
After a conviction for embezzlement in California, you could apply for an expungement of the conviction with the help of a competent attorney. However, before you apply for the expungement of your criminal record, you have to complete probation successfully or complete the applicable jail time, whichever is relevant.
Can you apply for an expungement of the conviction even after violating the terms of probation? Yes, it is still possible to apply for expungement even after violating the terms of probation. However, you will only get the expungement at the judge's discretion. According to California PC 1203.4, an expungement releases you from all the disabilities that could result from your conviction.
Having a criminal record could affect your chances of getting your dream job. When considering candidates for job openings, most employers perform a background check to determine whether a person has a criminal record. Many employers are not likely to go for candidates with a past criminal conviction. After expungement, the conviction will no longer appear in your background search results. Therefore, you can get your dream job, apply for licensing, or gain tenancy without the negative implications of the past conviction.
Common Legal Defenses
You can oppose embezzlement charges by coming up with applicable legal defenses. With the help of a competent attorney, you can challenge the prosecutor's evidence in court. Some of the applicable legal defenses include:
You Did Not Make a Fraudulent Use
You can only be guilty of embezzlement under California law if you engage in the fraudulent use of the victim's money or property. You can point out that there was no fraudulent use as long as you did not take advantage of another person. If you did not breach trust, confidence, or duty and cause the defendant pain, you could assert that there was no fraudulent use.
A Belief That You Had Right to the Property
If you acted in good faith and believed that you had a right to the money or property, you are not guilty of embezzlement. As long as you have the right to the money or the property, you are not guilty of the crime of embezzlement. The judge can decide on the presence of a good faith belief by analyzing the facts of your case. Even if your belief was unreasonable or mistaken, you could still hold on to the good faith belief defense.
You Had No Intent to Deprive
One crucial element of the crime of embezzlement is the intent to deprive the property owner of the property either permanently or temporarily. Therefore, if you can prove that you did not have the intention to deprive, you can be able to fight embezzlement charges. Your attorney can come up with a defense to show that you did not have this intent. For instance, you could have taken the money or the property accidentally or to pull off a joke.
Federal Embezzlement Laws
In some instances, state and federal laws might overlap when prosecuting embezzlement offenses. The crime of embezzlement could be prosecuted under state laws and as a federal crime. However, only one charge applies at a time and not both state and federal charges.
You can violate federal embezzlement laws depending on the type of property or the amount of money you steal. The federal consequences for embezzlement are detrimental. For instance, a felony offense could attract fines of up to $250,000, while misdemeanor convictions could attract fines of up to $100,000. These fines apply to individual defendants as long as the crime did not result in the death of the victim.
You face prosecution under federal law if you embezzle money or property that belongs to the U.S government of any of the government agencies. Similar charges could also apply for a property being made for the U.S government. For money or property worth more than $1,000, penalties include a fine of not more than $250,000 and imprisonment of up to ten years. In some instances, both the fine and the imprisonment might apply.
If the money or the property involved has a value of less than $1,000, penalties could include a fine of not more than $100,000 or jail time not exceeding one year. According to federal law U.S.C.A. § 641, both the fine and the jail time could apply.
You could face prosecution under federal law if you embezzle printing devices, stamps, or other tools used in creating currency notes, postage stamps, federal bonds, or stamps that involve the federal government. The penalties for embezzling these items are detrimental irrespective of the value of the items. The penalties include a hefty fine of up to $250,000. You could also be subject to imprisonment for up to ten years in prison, as outlined under U.S.C.A. § 642.
Embezzlement of public money by agents, employees, or federal officers faces prosecution under the U.S federal laws. The penalties for this offense will depend on the amount of money involved. The penalties for amounts above $1,000 include a fine not exceeding $250,000 or an amount equal to the cash embezzled, whichever is higher. You could also be subject to ten-year imprisonment or both the fine and the imprisonment. For embezzlement involving amounts less than $1,000, the penalties include a fine not exceeding $100,000, jail time not exceeding one year, or both fine and jail time.
An employee of the U.S federal court who engages in embezzlement will face conviction under federal law. For amounts or property whose value exceeds $1,000, the penalties include a fine not exceeding $250,000 or the amount embezzled, whichever is higher. The defendant could also be subject to imprisonment for ten years or both the imprisonment and the fine. If the embezzled property or money does not exceed $100,000, the penalties include a fine not exceeding $100,000, jail time of up to one year, or both the fine and the jail time.
If you receive money in your official capacity as a government employee, but you fail to deposit the money promptly, it could lead to an embezzlement conviction. It is an offense for a court employee to receive money, which belongs to the court on its behalf.
If you are responsible for the safekeeping of federal money, you could be guilty of embezzlement if you fail to deposit federal money promptly. Depositaries like treasury employees could also be guilty of embezzlement if they keep some of the funds instead of dispersing it.
Three crimes are almost similar to the crime of embezzlement. The prosecutor can charge you with the related offenses alongside embezzlement or instead of embezzlement. The related crimes include:
The California PC 459 outlines the crime of burglary. You could be guilty of burglary if you enter a commercial or residential building with the intent of committing theft or felony once inside the building. If you enter another person’s building with the intent of committing embezzlement, you would be guilty of embezzlement.
Forgery is a crime under California law outlined under California PC 470. You could be guilty of committing forgery if you sign another person’s name or fake his/her seal or handwriting. Other forms of forgery include falsifying legal documents, faking, altering, and presenting as genuine fake documents, property, or finances. If you forge signatures in the course of committing embezzlement, forgery charges might apply.
Other crimes that are related to the embezzlement include misappropriation of public funds as outlined under PC 424. Misappropriation or embezzlement by a public official is also a related crime described under PC 504.
Find a Criminal Defense Attorney Near Me
You should not give up if the prosecutor accuses you of committing embezzlement. The LA Criminal Defense Law Firm can help you come up with an excellent defense to fight the charges. Contact us at 310-935-1675 and speak to one of our attorneys.