Individuals like state officials or persons entrusted with government funds are put in positions of trust to manage the money appropriately. Unfortunately, these individuals tend to use the funds for personal gains or things that do not benefit the public. Prosecutors and relevant government agencies are working hard to ensure those who misuse public money face the law. So, if you have been accused of misappropriation of public funds in Los Angeles, The LA Criminal Defense Law Firm is available to defend you against charges.
Legal Explanation of Misappropriation of Public Funds
According to California Penal Code 424 PC, it is illegal for any state official or agency entrusted with oversight of government finances to misuse the money. The offense is very similar to the embezzlement of funds. The only difference is that PC 424 is concerned with misuse of public finances, whereas embezzlement involves the misuse of either public or private money. The majority of PC 424 cases involve people with access to public funds or public officials.
State, county, municipality, and other government workers misuse public finances in various ways. Some of these ways include:
Misappropriating Government Money Without Authority
If you or someone else benefits from the appropriation of public money without legal consent, you violate PC 424. The prosecutor just needs to show that you benefited or someone else benefited from the misuse of government money. Therefore, you will face these charges if:
As the offender, you, were a public official, or someone tasked with receiving, safekeeping, transferring, and disbursing government money
You misused the money to enrich yourself or somebody else devoid of legal consent
You intentionally violated the law or were criminally negligent for lacking necessary measures to ensure that your appropriation of public money was lawful
A public official, in this case, can be a state or local authority’s worker inclusive of elected and appointed officials, lawyers, and accountants. Appropriation, on the other hand, means using public money for personal or someone else’s benefits. You must have been aware that misappropriating public money was unlawful.
The prosecutor proves criminal negligence by showing that you knew public funds misappropriation is illegal, or you overlooked any reasonable steps that could have helped you know whether the conduct was legal. Criminal negligence has higher liability than ordinary negligence because the prosecutor has to show your behavior was gross, aggravated, or reckless.
Loaning, Profiting or Appropriating Government Money Without Legal Consent
Illegal loaning out of government finances is an instance of a PC 424 violation. You will face charges for this manner of misappropriating public funds if:
You are a local or state government employee mandated with overseeing government finances
A non-criminal statute permits or forbids you from loaning government funds or using the funds under particular circumstances
You loaned out government finances and made profits or used the money for unauthorized purposes
You knew your conduct was unlawful, but you disregarded the law for personal gains
Establishing False Accounts, Fraudulently Changing or Destroying Accounts
Any fraudulent erasure or creation of accounts that hold government finances is a crime as per PC 424. The prosecutor could charge you with keeping a fake account or updating a valid account using false data. You will be subject to these charges if:
You intentionally kept a false account or materially entered incorrect data or malicious erasure in any account holding public money
You altered, falsely hid, or destroyed an account relating to government finances with plans to defraud
If you destroy public money accounts or knowingly alter the accounts, you will be violating PC 424 even if you don’t misuse any finances personally.
Declining to Transfer or Pay Funds
If the law requires you to pay or transfer public funds under your management and you refuse, you could get charged with misusing government finances. The charges will be brought against you if:
You were presented with an order or draft requiring you to transfer or pay public funds by a competent authority, but willfully omitted or refused to do so
You knowingly omit or decline to pay or transfer funds received by you to any officer or individual authorized by the law to be the recipient of the funds
You could be convicted for misuse of public money if you were fully aware the law required you to make the payment or transfer or were criminally negligent in failing to discover that you were required to make a transfer or payment of public money.
Exceptions of Violating Misappropriation of Public Money Law
California PC 424 makes an exception for misappropriation of minimal or small amounts of money. Also, the same statute will make an exception if the misuse of government funds was incidental. This means you are innocent of this crime if only the activities led to misappropriation of small sums of money. With sufficient evidence, your criminal defense attorney could have these charges dropped.
Expectations in Misuse of Public Money Cases
When faced with allegations of misusing government funds, you should expect investigative agencies and the prosecutor to collect and evaluate the relevant evidence, which will aid in proving guilt. At such a time, you must use the services of The LA Criminal Defense Lawyer.
Everybody working in the department in question is a suspect and will be interrogated until the actual suspects are determined. If you are among the main suspects, you must cooperate with the investigative agency before and after apprehension.
Although you are required to cooperate, some of the things you say to the investigators might be used against you in court, hence you should remain silent and follow your attorney’s advice.
After arrest, you will be booked in a cell as you await your bail hearing. At the hearing, your defense attorney will give valid reasons as to why you should be granted bail. The prosecution will then counter your argument by presenting facts as to why you should be denied bail. The judge will then weigh the aggravating and mitigating factors presented by the opposing sides to come up with a ruling on whether to grant or deny bail.
If granted bail, the amount you will pay depends on the misappropriated public funds in question. So, you should expect a bond of tens of thousands of dollars if the allegations against you involve vast sums of government money. In the event you fail to raise the bail amount, you will stay in custody until the case is heard and completed. But if you get the amount, you will prove your innocence from home.
When it gets to the prosecution of the case, you will need to entrust your attorney with every detail. The prosecutor will be coming for you with everything they have, and failure to disclose even the slightest details to your attorney might allow the prosecutor to convict you.
During the trial, your case will be mentioned before a judge, and then you have the option to plead guilty, not guilty, or no contest. Pleading guilty means admitting that you committed the crime while a no guilty plea means you recognize you are innocent. By pleading no contest, you acknowledge that you didn’t violate PC 424 but allow the court to determine your punishment. After taking a plea, the judge will summon you and inquire if you understand the consequences of your plea.
If you plead guilty, you will be sentenced, but the sentence will be more lenient than that of a person who pleads not guilty. It’s worth noting that even after you confess to the crime of misappropriating public money, your case will still proceed to full trial, and the prosecutor will present all the evidence they have against you.
Prosecution of Misuse of Public Funds
Several ways are available in which the prosecuting attorney can build robust evidence to convict you of the PC 424 violation. Some of these ways include:
You had a Legal Responsibility to Oversee Public Finances
One main aspect of PC 424 is the defendant has an official duty to manage the funds. The prosecutor will use relevant documents to highlight your official obligations in the position you hold. They will have an advantage over you if they can show part of your responsibility as a public official at the time of the crime was oversight of public finances.
You Breached the Job Obligations
Before an employer hires you for a specific position for formal employment, you must agree to the terms of employment first. For state or local government officials, one of these requirements by the contract is that you are forbidden from the misappropriation of public money. The prosecutor will read this clause in your employment contract that prohibits you from misusing government finances and informing the jury that you breached it. However, for this to happen, you must have willfully signed the employment contract.
You Fraudulently Took or Used Government Finances for Selfish Gains
California PC 424(a)(1) prohibits you from misappropriating government money to enrich yourself or another person. PC 424(a)(2) further makes it illegal to loan government money or earn profits without legal consent. In such a case, the prosecutor will provide receipts or bank statements of the things you purchased for yourself or another person using public money.
You Created a False Account or Made False Data Entry On an Existing Account
The bank statements from the new account you created for fraudulent reasons or the existing one that you altered will be used to sentence you for PC 424 violation. To prove that you made changes to the account, they will use previous bank statements and compare them with the current ones to demonstrate that the account was changed. Some of the elements of PC 424 that are proved here include falsifying accounts or making false entries.
Intentionally Declined to Transfer or Pay Government Money to the Required Destination
To prove this element, the prosecutor will show that you received an order or draft from a higher authority to transfer funds to a specific recipient but failed to do so. The prosecutor will present the subpoena, draft, or order that you received requiring you to make the payment or money transfer. They can use other public officials, individuals, or agencies that were meant to receive the funds to testify that you refused to transfer money.
Penalties for Violating PC 424
California PC 424 misappropriation of public finances is a felony. The punitive measures for this offense include:
State incarceration for 24, 36, or 48 months
Maximum court fines amounting to $10,000
A conviction for this offense may adversely affect a government agency worker than other typical criminal convictions. The reason being once you end up with a sentence as per PC 424, you are not allowed to occupy any government office in California.
Legal Defenses for Misuse of Public Funds Charges
As seen from the above penalties, a conviction according to PC 424 could make you lose your career, reputation, and get a criminal record. If you hold a high rank in the government, you will get a lot of attention from the media. Hiring the services of a proficient attorney will help you fight the charges. Below we have discussed some of the defense strategies that you might apply to contest these charges.
The Misappropriated Money is Minimal or Incidental
There is no provision for minimal or incidental amounts in cases involving misuse of public money. But as stated earlier, you will face charges of violating PC 424 if the finances in question are more than minimal or incidental. So, if the amount of government money you are alleged to have mishandled is substantially little, the case will be dismissed. The nature of your lawsuit will determine whether you are eligible for this exception. In some cases, a few thousand dollars might be deemed substantial and, in others, minimal.
You didn’t Act with Gross Negligence or Intentionally
The prosecutor in these cases needs to show you knew your conduct is illegal or you were criminally negligent. So, if your attorney asserts that your negligence was not gross but ordinary or you were mistaken that your behavior was unlawful, the court could find you innocent.
The Public Funds were Used for the Intended Purpose
If you are accused of failing to use public finances as instructed by your superiors, you can avail receipts and bank statements that prove you used the money as directed by authorities. You could also argue the mistake of fact by asserting that you didn’t intend to misuse the money or mistakenly believed that your conduct was within the law.
The Funds in Question don’t Qualify as Public Money
You are guilty of misappropriating public funds if these funds you are accused of mishandling are derived from taxation, fines, and licensing and are intended to help the general public access goods and services. Therefore, if the money in question was not derived from these government sources, or was not designed to benefit the public, you are innocent. However, in such a case, you could face embezzlement charges.
You Acted Under Duress
In case someone made threats to you or your family so that you can transfer or pay public money to a particular recipient, a California court will pardon your case. However, you must have evidence that you were threatened, and the threats made you believe that your life was in danger. Phone call recordings and messages can be used to prove this, and in such a situation, the court will dismiss the charges and go after the person who made the threats and forced you to misuse public funds.
Your Actions were Necessary given the Circumstances
When accused of using public funds without authority from high authorities, you could assert that you acted out of necessity. You could argue that there was a potential threat of fraud, and the only way you could save the money is by spending it for unauthorized purposes. But for this defense strategy to work, your attorney must show you approached the concerned authorities, but they didn’t respond in time or had no time to report the issue.
California takes white-collar crimes strictly. And apart from PC 424 offense, there are other crimes similar or related to misuse of public finances. These associated offenses include:
The crime of embezzlement is prosecuted in place of or alongside misuse of public money. As per PC 503, you will be criminally liable for fraudulently appropriating property that belongs to somebody else, and you have been entrusted with the management of the property.
The significant distinction between PC 503 and PC 424 is that you can only be convicted of embezzlement if you falsely transformed or used the proceeds of embezzlement for selfish gains or deny the holder of the property of its use. Embezzlement statutes apply to property, whether private or public, including those not in money form.
Embezzlement is typically charged as a misdemeanor if the value of the property doesn’t exceed $950 or a felony if the value of the property is at least 950 dollars. Take note that when the property in question belongs to the public, then the embezzlement of such property will be registered as a felony.
Bribery of a Public Official
According to PC 67 & 68, it is a crime to bribe or receive a bribe from a public employee or an executive officer. And just like PC 424, bribery of a public official is an offense commonly committed by government employees. But any person who is not a public employee but tries to bribe a public employee can be charged under PC 67 and 68. The statute prohibits individuals from offering anything valuable to state or local authority’s worker or for a public official to solicit a bribe or anything worthwhile for a fraudulent motive.
Keep in mind that when a public official solicits or accepts something of value with corrupt intent, the offense is usually charged as a misdemeanor. But for other persons who are not government workers that bribe public officials, the crime is typically charged as a misdemeanor or, at times, a felony. However, the decision depends on the nature of the case and the value of finances or property in question.
Forgery is outlined under CPC 470, and the statute prohibits people from creating or using a written document to commit fraud willfully. A misdemeanor conviction will attract a maximum of 12 months in jail while the sentence for a felony is 16, 24, or 36 months in a Los Angeles jail. In the event you used a forged check to withdraw money from an account without authorization, you could be charged with forgery alongside embezzlement.
PC 548 makes any act such as injuring, abandoning, destroying, or disposing of an insured property with the intent to reclaim insurance benefits a crime. Based on the extent of your actions, the prosecutor may charge you with a misdemeanor or felony.
Health insurance fraud cases mostly involve Medi-Cal, a health insurance program run by the state to help the elderly, disabled, and low-income earners. When a medical provider bills services not provided or overbills a service, he or she commits this form of fraud. As per PC 550, the punitive measures for this crime include custody in jail for no more than five years or court fines double the amount you are accused of defrauding.
Find a White Collar Crimes Defense Attorney Near Me
The criminal process of prosecuting people accused of misappropriation of public funds is complex. The penalties upon conviction are devastating, especially because you can’t work for the state or local government again. If charged with a PC 424 violation in Los Angeles, The LA Criminal Defense Law Firm could help you with legal counsel and develop strong defenses. Our attorneys will be with you from the investigation stage to the judge’s final verdict. Reach out to us today at 310-935-1675 for a zero-obligation consultation.