Under California statutes, embezzlement is a white-collar property crime that occurs when you illegally retain the property you have been entrusted to manage or monitor by the owner. Illegal retention could mean stealing money or property or using what has been assigned to you for selfish gains. The crime is a severe one and could have brutal repercussions on your personal and career life.

Embezzlement is harshly punished because, unlike theft, there is a fiduciary relationship, where you have a job responsibility, but you have breached the trust. Therefore, you must avoid or reduce these consequences by understanding the crime of embezzlement, penalties, valid defenses, and other related crimes. At the California Criminal Lawyer Group, we are ready to guide you through the legal process and provide the best defense if you face charges for the offense in Sacramento.

Legal Definition of Embezzlement

Embezzlement is defined under PEN 503 as the unlawful taking or retention of property or money you legally accessed or possessed to deny the legal owner its benefits. You must understand that you must keep or access the property lawful but still lack ownership rights to face these charges. When you take someone else’s property or money for selfish gain, you steal. This, combined with the fact that you have betrayed your duties by stealing, makes it a unique form of embezzlement.

The form of charge you face for this crime primarily depends on your criminal account and the worth of the money or property stolen. However, the prosecuting attorney must prove particular elements for the judge to convict you for the crime. These are:

  • The property owner entrusted you, the accused, with it.
  • The action by the owner to charge you with their property was due to their trust in you.
  • You fraudulently appropriated the money or property for your benefits.
  • And planned on depriving the victim of its use or gain.

You will notice that the value of property or money in question isn’t a critical element in the qualification of the PEN 503 violation. Although the term embezzlement tends to make you think that the crime involves siphoning hefty amounts of money by directors of big financial corporations and public officials, these charges can be filed against many individuals in all kinds of positions in different organizations or industries. Also, an employee and employer relationship might exist where the victim has assigned your responsibilities out of trust.

Fiduciary Relationship

Before a conviction for embezzlement, the prosecuting team must prove a relationship of trust between you, the defendant, and the accuser. A fiduciary relationship exists if you are an employee of the accuser, have been given temporary possession of money or property, and are tasked with monitoring or managing property.

Note that being an employee isn’t enough. The prosecutor must present concrete evidence to show confidence in your abilities. They must give the duties assigned to you to demonstrate the existence of a fiduciary relationship. Without this evidence, you can face conviction for embezzlement charges.

Fraudulent Appropriation

You act fraudulently when you take gratuitous advantage over someone else or make the party incur losses due to the betrayal of your duties or trust they had in you.

Intent Requirement

When proving a PEN 503 violation, the prosecuting attorney must demonstrate that you planned on depriving the victim of the enjoyment or use of the property entrusted to you out of a fiduciary relationship. Keep in mind that intending to deprive the owner of their property or money, even for a short time, is enough to cause a conviction. The intent to deprive can be temporary.

Also, you cannot claim that you planned to return the property in your defenses. Unless you replaced the property before you were arrested and charged, intending to return it won’t prove your innocence.

Showing intent to deprive is not easy. However, the prosecutor can determine how you utilized the money or property to prove you had a fraudulent purpose. For instance, if your employer gave you money to deposit in the bank but you decided to use the money to pay off your debts, you will be convicted for embezzlement. However, if you used the money to repair the employer’s car or equipment, you won’t face conviction for embezzlement because your actions were for the employer's benefit.

Types of Embezzlement

Embezzlement takes many forms. One of these forms is siphoning, where you, as a worker, fail to enter a transaction in the records to keep the cash earned for yourself. Siphoning is never noticed in many organizations because employees ensure balanced records, and the money at hand reflects the records. However, this embezzlement form is common in Sacramento.

Another embezzlement type is check kiting which involves drawing a banker’s check from an account with insufficient funds and depositing it at a separate deposit account to withdraw money. The scheme works where the bank allows you to withdraw cash before the arrival of the check’s funds. Typically, the victims of this kind of embezzlement are retailers and banks that let customers withdraw money against a check before the arrival of its funds.

Also, there is a kind of embezzlement called lapping. Here, you illegally retain the money from a transaction and use the subsequent trade to cover the first. Lapping goes on for a long time, and sometimes it’s only noticed when you leave an organization or accounting irregularities are detected. Other times, this embezzlement form goes on for a long time until the money is written off as a bad debt.

Other times, as an employee trusted to manage payroll or bookkeeping, you might decide to include “ghost” or nonexistent employees on the payroll to receive money yourself, thus committing payroll fraud.

Again, embezzlement can take the form of kickbacks, a kind of bribery where, as an employee, you agree to acquire a bribe in the form of gifts, favors, or money to help a vendor continue doing business with your employer. Employers face many difficulties with kickbacks because you might approve poor-quality goods or services. Other times you might inflate the cost of the products, resulting in losses for the employer.

The final form of embezzlement is overtime fraud. It is widespread among employees paid hourly wages when they leave work without checking out and then return to checkout. As a result, you receive payment for hours you haven’t worked. You might also falsify records to show you have worked overtime when you haven’t.

When your employer has reason to believe you are engaging in any of the above activities, they might confront you or conduct an investigation. If they find sufficient evidence to prosecute you, they will involve the law enforcement authorities who will arrest you and file charges.

Understanding Embezzlement Arrests

An arrest for a PEN 503 violation often comes as a shock and often results in embarrassment and panic. Whatever you do, do not try to convince the arresting officer of your innocence or admit guilt by asking for forgiveness. It’s best to remain silent to avoid self-incrimination.

If police officers approach you and communicate their interest to put you under arrest for the crime of embezzlement, do not resist. Instead, remain silent and follow their orders. Anything you say, even answering an officer’s question, will be used against you in court. Therefore, don’t reply to their questions until your criminal attorney is present.

Trying to convince the police officer of your innocence is counterintuitive because only the court can determine your innocence or guilt. Therefore, the right action is to call your Sacramento defense attorney to share your side of the story. The attorney will use this information to build defense strategies to contest the embezzlement charges.

Even if concrete evidence against you and a guilty verdict is inevitable, your attorney can negotiate to obtain a reduced sentence.

Also, if you face embezzlement allegations, don’t allow law enforcers to search for your property without a valid search warrant. If you don’t pose any threat and an officer proceeds to search your place without your consent or warrant, you can use this as a defense in your case and argue that the evidence against you was obtained unlawfully.

Furthermore, you can avoid arrests, primarily when an officer can’t provide an arrest warrant. You can request the officer to produce the arrest warrant, and if they can’t do so, you should refuse to leave your house or car to prevent apprehension. However, if you opt to run away or use force to resist arrest, you may face additional charges or sustain avoidable injuries.

The rule of thumb is to maintain silence whenever officers ask questions to avoid self-incriminating statements.

Embezzlement Punishment in Sacramento

The crime of embezzlement is punishable depending on the worth or kind of property in question. Also, it could be determined by the amount of money stolen. The aggravating circumstances in your case might include:

  • The property owner is an elderly individual.
  • There is sufficient evidence to demonstrate you intended to commit the offense.
  • You have been previously sentenced for PEN 503 violation.
  • Your crime involves multiple victims.
  • You committed embezzlement using a firearm.

The court will increase your penalties if these circumstances are present in your case. Luckily, your defense attorney will have an equal opportunity before sentencing to present mitigating circumstances or elements to convince the judge to impose a more favorable sentence. The factors that can help reduce your sentence include:

  • Claiming that it’s your first offense.
  • You aided the crime but never played a critical role.
  • You were forced into contravening the law.
  • You had returned the embezzled funds before apprehension.

  1. Petty Theft Embezzlement Penalties

When the property or money you are accused of embezzling is no more than $950, you will be charged with a misdemeanor PEN 503 violation. Upon conviction, you will be sentenced to at least half a year in jail or as much as $1,000. However, if the worth of the embezzled property is less than fifty dollars, the prosecuting attorney might opt to charge you with an infraction only. The penalty for an infraction, when found guilty, is a monetary fine not exceeding $250 with no jail time. And if you have been previously convicted for a theft-related offense, you won’t qualify for a charge reduction.

  1. Grand Theft Embezzlement Penalties

If the property's worth, services, or money in question is at least $950, the offense will be charged as a misdemeanor. The maximum sentence you can face for this offense is no more than 12 months and a fine of $1,000. However, if the embezzlement involves felony grand theft, you may face a prison term of up to 36 months for the total items. Also, the court will impose a monetary fine of $10,000 or felony probation.

  1. Public Funds Embezzlement

Public money embezzlement is a felony offense. When convicted for this offense, you may be required to pay restitution, heavy court fines, and two to four years of incarceration. The consequences of a conviction will even follow you after you have completed your prison sentence because you will never hold a public office again.

  1. White-Collar Crime Sentence Enhancement

If your conviction occurs during the trial or you have at least two fraud or embezzlement felonies, which resulted in the loss of over $100,000, you will face white-collar sentence enhancement. The enhancement will add at most five years of a prison sentence to your baseline prison term.

Defenses to Embezzlement

Your charges aren’t entirely hopeless. You can avoid or reduce the repercussions of a conviction by hiring a defense attorney. The attorney will evaluate all the case facts and develop practical defense strategies to contest the charges.

The fact that the prosecuting team must prove all the elements of the crime beyond reasonable certainty creates an opportunity for your defense attorney to contest the charges. The defenses are:

Good Faith Belief of Title

If you had a good faith claim of title or the right to the property, you could argue that you reasonably believed you had a right to the property. To determine reasonable faith belief, the court analyzes the facts of the case. Even if you were mistaken to believe you had a right to the property, a claim of good faith would still hold in court. However, you can’t use the claim of good faith as a defense if you retained someone else’s property as payment of debt.

You Didn’t Intend to Deprive or Defraud

Recall, a significant element of PC 503 violation charges that the prosecuting team must prove is that your actions were driven by the intent to defraud or deprive the rightful owner of their property or its enjoyment. Therefore, it will be in your defense to claim that you didn’t plan to defraud the victim. Instead, your actions were accidental.

You must note that this defense will work if only you have been accused of embezzlement after the first attempt. For instance, if it’s money you were siphoning from an organization, you can claim you lacked the intent to defraud if it was the first time doing the act. However, if you engaged in the act severally, the defense won’t hold in court.

Additionally, the circumstances surrounding the embezzlement will determine if the defense works or not. For instance, you omit an item you have sold on the invoice and pocket the money. In that case, you will be acting with the intent to commit fraud. However, if you include an item that hasn’t been sold accidentally, you can argue that it was a mistake and you never planned on defrauding the victim.

Also, if you are under medication that causes involuntary intoxication or someone drugs you, causing you to embezzle property or money, you can claim you lacked intent. However, if the intoxication was voluntary, you can’t use lack of intent as a defense.

Keep in mind that investigative agencies will conduct a lifestyle audit when the money or property is used for selfish gain, mainly if vast sums of money are in question. Also, they will check your debts, bank statements, and bank accounts created.

If you are convinced you were entrapped by law enforcement or someone coerced you into committing the crime, you can argue lack of intent. When you claim that you were under duress, you must demonstrate that someone else used threats, violence, or coercion to force you into committing embezzlement. However, you cannot argue you were under duress because of huge bank loans or financial obligations.

No Demand

When someone entrusts you with their property, you obtain legal possession or access. If the owner wants the property back or denies you access, they must write a formal request to receive their property. If they make a demand but for the repossession of their property but you turn down the request, it demonstrates your criminal intent to defraud. However, if the owner never requested or demanded to have their property back, you can assert that they neglected their property. Again, you could give any other noncriminal reason for retaining the property.

You Didn’t Use the Property Fraudulently

If you recall, another crucial element the defendant must prove is the fraudulent use of a property. Therefore, you can claim that you didn’t take undue advantage of the owner or cause them losses by betraying your duties as a defense.

You Were Entrapped

When there has been an incident of embezzlement, especially one involving vast sums of money, investigative agencies might be under a lot of pressure to make an arrest. So, they might induce you into embezzling funds, a crime you could never have committed of your volition.  If the evidence from the crime you were induced to commit is the primary evidence in court, you can argue that the authorities entrapped you.

False Allegations

Not everyone charged with embezzlement has committed a crime. Someone might falsely accuse you of a crime out of revenge, jealousy, or cover-up the behavior. False allegations are unfair, and the worst part is that if you don’t have a criminal defense attorney by your side, you might be convicted. Therefore, hiring a competent legal team is the best way to prove your innocence or provide facts that will uncover the truth and show someone falsely accused you. These individuals will investigate the case to uncover the truth and protect you from incarceration and payment of court fines for a crime you didn’t commit.

You Didn’t Embezzle Funds

You might engage in legal activity but still be termed to have engaged in embezzlement. For instance, you have been managing or controlling someone’s business where you regularly deposit large sums of money in your bank account. If the money is considerable than the average deposits, the bank and law enforcement may consider this a suspicious activity launching investigations into your organization to find illegal patterns.

When you feel you are being unfairly targeted, you can hire auditors or forensic accountants to analyze your financial records to prove that your transactions are legal and it’s not embezzlement.

Related Offenses

The circumstances of your case can result in additional charges on top of the embezzlement one. This is common if the case proceeds to trial. The events that could result in these additional charges are the age of the victim, use of force or violence, and the techniques you used to commit embezzlement. The charges you could face related to embezzlement are:

  1. PEN 470 Forgery

If you alter or create a document about money or property to commit embezzlement, you are likely to be charged with an additional crime of forgery under PC 470. PEN 470 violation is a wobbler whose misdemeanor conviction attracts no more than twelve months in jail while a felony conviction attracts no more than thirty-six months in jail.

  1. PC 459 Burglary

Burglary is defined as accessing a residential or business establishment with the plans to commit theft or a felony once inside. When the property you are entering belongs to a person you share a relationship of trust with, you will be charged with burglary alongside embezzlement if you intend to embezzle funds after entering the establishment.

Find an Experienced Embezzlement Defense Attorney Near Me

A conviction for embezzlement can derail your career goals, dent your reputation and even result in incarceration. Therefore, if you have queries regarding fighting the charges, you need to talk to an embezzlement defense attorney in Sacramento. At the California Criminal Lawyer Group, we will review your case and mount the proper defenses to ensure the charges are reduced or dismissed. Contact us today at 916-775-7660 to discuss your case, circumstances, and expectations.