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Embezzlement under Penal Code 503 is the unlawful and fraudulent appropriation of money or property that belonged to another person and for which you were entrusted to keep or maintain. It contains the following elements:
- Money or property was entrusted to you
- By the property’s owner who trusted you to keep or maintain it but,
- Which you fraudulently transferred to yourself for your own benefit
- And with the intent to deprive the owner of its use or benefit
The Element of Trust
People entrust property to others all the time. When you use valet parking or leave your vehicle with a garage mechanic, you are entrusting your car to a stranger. Bookkeepers, office managers and cashiers are entrusted with cash and property. Corporate executives, company directors and officers are also entrusted to oversee property or funds. In fact, anytime a person is given funds to deposit or to use in a certain way, a trust relationship is formed.
The Element of Fraud
The prosecution needs to prove that you used the money or property in a fraudulent way so as to benefit yourself and cause the owner damages or loss. A loss is considered any breach of the trust accorded you or by your taking advantage of the property owner. You take advantage by using the property for your own benefit and depriving the owner.
The Element of Intent to Deprive the Owner of its Use
This element involves intent, usually the essential element in most criminal offenses. Your intent to deprive the owner of the property or its use is exhibited when you use the property either to benefit or enrich yourself, such as by depositing entrusted funds into your own account, or when you deprive the owner of its use, even for a short time and regardless if you did so to personally benefit yourself.
Embezzlement is a crime of theft. In California, you are charged with either grand theft or petty theft under PC 487 depending on the value of the property and its type in some cases. Grand theft applies to property valued at over $950, though it is a wobbler so that either misdemeanor or felony charges may apply depending on your criminal history and the facts and circumstances of your individual case.
For property valued at $950 or less, you face petty theft charges, which is a misdemeanor. If you stole multiple items of property or embezzled money multiple times within a 12-month period with each time less than $950 but which amount is more than $950 if added together, then you face grand theft either as a felony or as a misdemeanor.
If convicted of misdemeanor grand theft embezzlement, you face:
- Summary probation
- Or up to one year in county jail and/or
- Up to $1000 as fine
Grand theft embezzlement is theft of funds or property in excess of $950. However, it is not a wobbler if the property embezzled was either a firearm or an automobile, which are charged solely as felonies.
For felony grand theft embezzlement, the court may impose:
- Formal probation
- 16 months, 2 or 3 years in county jail
- And/or a fine up to $10,000
This sentence also applies to grand theft felony of a firearm except that your time served is in state prison instead of county jail.
Petty theft is a misdemeanor only and carries a sentence of:
- Informal or summary probation
- County jail up to 6 months
- And/or a fine of no more than $1,000
The code section provides for a sentence enhancement if you embezzle particularly large amounts of money or property with a high value. The sentence enhancement is for additional incarceration time that is served consecutively and not concurrently. They provide as follows:
- One year for property valued at $65,000 or more
- Two years for property valued at $200,000 or more
- Three years for property valued at $1,300,000
- Four years for property valued at $3,200,000
You also face an enhanced sentence if the victim was a senior citizen or someone with a physical disability or cognitive impairment that limits their daily living activities. In such cases, you can be charged with an additional count of elder abuse or, if the victim was an otherwise dependent person, face the high end of your sentence.
A mitigating factor is if you voluntarily returned the property or funds before it was discovered but were charged nonetheless. You are guilty of embezzlement for misappropriating funds entrusted to you for even a short time provided it was for your benefit and you caused a loss to your employer or person who entrusted you.
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Any criminal offense has defenses, many of which concern forcing the prosecution to prove each element of the offense. For embezzlement, you have a number of available defenses:
Good Faith Belief to Entitlement
If you had a reasonable, though erroneous, belief that the property was yours, then you might be exonerated. You do have to demonstrate:
- You did not use surreptitious means to take the funds but did so openly or publicly
- You did not take the property because of a debt owed to you by the property owner
Lack of Criminal Intent
Mistakes are made by bookkeepers, office managers or anyone else entrusted with someone else’s property. For instance, a valet who parks a car in a different location from the usual valet parking lot lacks criminal intent. Or, a senior or impaired individual might have given confusing instructions about what to do with certain property and the entrusted individual misinterpreted them.
It is not uncommon for business partners or family members to accuse each other of embezzlement of property that you both might have an interest in or the right to possess. If funds are mismanaged, you might find yourself wrongfully accused but your attorney may be able to demonstrate that you merely used poor judgement.
Forgery – PC 470
Forgery is generally signing someone else’s name to a document or altering it so that any funds intended for someone else go to you instead. For example, a secretary entrusted to deposit funds from a transaction into her boss’s or organization’s account signs it in the name of the payee and then endorses it for cash to be deposited in her own account commits both embezzlement and forgery.
Check Fraud – PC 476
You commit check fraud by altering the amount, forging someone else’s name on it or making a phony check. In this context, you could generate a check by signing the payor’s name, putting any amount you want on it that will come from the bank account of the person who entrusted you, and naming yourself as payee.
Real Estate Fraud
Making up a false deed or forging the real property owner’s name on a deed and delivering it to you so you can immediately sell the property or use it as collateral for a loan is grand theft as well as possible embezzlement if the deed was entrusted to you.
Under PC 1203.4, most misdemeanor and many felony convictions may be expunged. Expungement is a process wherein your record of conviction is hidden or erased from the databases of companies that perform criminal background checks for the general public. Your record and court files are still kept, however, on FBI and other law enforcement databases and may be used to:
- Enhance your sentence if you commit another felony
- Be considered if you apply for public employment, licensing, the military, for public licensing, or for a law enforcement position
The main qualifying condition for an expungement is that you not have served any time in state prison. If you did, you will have to seek other post-conviction relief.
Felony grand theft embezzlement is always a felony if a firearm or automobile was the subject of the theft. A conviction carries state prison time so if you were incarcerated, you would not be eligible for an expungement but for other post-conviction relief.
However, if you are convicted of felony under PC 503 as a wobbler, you can petition the court to reduce it to a misdemeanor before having it expunged under PC 17(b)(3).
A misdemeanor conviction does not take away any of your civil rights but employers, landlords and some schools may still consider it an embezzlement conviction adversely when deciding whether to hire or promote you, offer you a place in a college or university or whether to grant you a residential lease.
If you did not spend any time in state prison under a conviction for PC 503, you may petition the court for expungement provided you meet the following criteria:
- You completed all terms and conditions of your probation
- You have no criminal charges pending
- You have not committed any other felony offenses
If the court grants you the expungement, it will have the following effect:
- You may state under oath in any court proceeding or on any legal document that you have never been convicted of a felony—unless you are facing a subsequent felony offense or applying for public employment and other specific matters
- You can state on an employment and rental application that you have no felony or misdemeanor convictions
- But you do have to disclose a conviction if running for public office or applying for a license to work with the State Lottery Commission
- You can apply to the military or for a law enforcement position but you will have to disclose the conviction though it is not a disqualifying factor unless the conviction was for a felony offense
- It may have a positive effect on your immigration status if you are not a US citizen and are seeking permanent residency.
- You can apply for a state license such as for real estate or contractor’s license
You can apply for expungement the day after your probation ends. In cases where no probation was imposed, you must wait one year from the date of your conviction before applying.
If you are not a US citizen, an embezzlement conviction may have immigration consequences and affect your ability to apply for and obtain naturalization. Embezzlement is a crime of moral turpitude and may expose you to deportation under the following circumstances:
- You are convicted of a crime of moral turpitude, of which a sentence of at least one year may be imposed, within 5 years of your lawful admission to the US
- Or, you are convicted of two crimes of moral turpitude that did not arise out of a single transaction, incident or criminal scheme
Also, conviction of felony grand theft embezzlement is considered an aggravated felony. A single conviction will likely expose you to deportation.
If you have been arrested for embezzlement and would like to learn more about what attorneys charge.
If you want to understand why its important to have an attorney represent you.
If you are ready to discuss a pending case with an attorney contact the Aizman Law Firm at 818-938-1274 for a free confidential consultation.