Embezzlement is a white-collar crime classified as theft under California laws. While most people might associate the offense with public officials, embezzlement can happen in everyday scenarios where a person misappropriates a property that the owner has entrusted to him or her. If you are caught up in an embezzlement charge, it is wise to contact a criminal defense attorney who deals with white-collar crimes. California prosecutes white-collar crimes harshly due to the breach of trust involved as well as the losses the victim incurs. In some cases, you may be charged with additional offenses alongside embezzlement depending on the victim and the circumstances of the offense, which means that the potential penalties increase. Contact the California Criminal Lawyer Group for help in understanding embezzlement in California, the related charges, and the potential defenses you can use.
Embezzlement refers to a crime in which the defendant retains the property (including money) of another person when the owner has entrusted such property to the defendant. Embezzlement differs from larceny in that in the former, the element of trust between the owner and the defendant must exist.
Embezzlement charges can be prosecuted as grand or petty theft, depending on the amount of embezzled money or the value of the property involved. However, before you can be convicted, the prosecution has to prove several elements including:
The intent is a necessary element to prove embezzlement. The law requires that prosecutors prove that you had the intention of depriving the owner of the use or enjoyment of his or her property temporarily or permanently.
The prosecution will determine how you used the property to prove your intent to defraud. For example, if you keep some of your employer's money instead of depositing it in the bank, as you are required, and use the money to clear your debts, then you are guilty of embezzlement.
However, if you used the money to repair equipment that the boss forgot to allocate funds to, you might not be guilty of embezzling.
In the second scenario, you are using the property of your boss for his benefit, unlike in the first scenario.
Trust is an important factor in proving embezzlement. The law requires that the owner entrust his or her property to you based on the trust he or she has in you. The prosecution might prove that a relationship of trust exists between you and the victim if:
- You are the victim’s employee, and the duties and responsibilities assigned to you indicate that the employer trusts you.
- The owner allowed you temporary access or possession of his or her property
- You were a member of an organization where you could manage its property or finances
Fraud is an important element in embezzlement charges. It refers to the fraudulent use of the owner’s property for your benefit. Fraud occurs when you take an unjustified advantage over the owner and cause a loss or breach of trust or duty to the other person.
Forms of Embezzlement
Embezzlement can occur in a variety of ways. These include:
Siphoning is a form of embezzlement where the employee fails to record a transaction and keeps the money earned for him or herself. It is one of the simplest and most common forms of embezzlement. The offense can go unnoticed since the employee will maintain balanced records, the money in the drawer, and that in the records match.
2. Check Kiting
Check kiting is a sophisticated type of check fraud where the account holder draws a check from an account with an insufficient balance. He or she then deposits the check at a different checking account and withdraws the money. The scheme succeeds where the checking bank allows the account holder to withdraw money before the funds from the check arrive. Check kiting places the retailer who issues cash advances or banks that allow account holders to withdraw against a check before it arrives. Even if you deposit money in your account within the check float period to cover your tracks, you are still guilty of check kiting.
Lapping is a form of employee fraud where the employee pockets the payment for a transaction. He or she will then use the send payment for another transaction to cover the first transaction, and a third payment to cover the next transaction. Lapping can continue for so long until the pending transaction is written off as a bad debt. In some cases, lapping is discovered once an employee leaves the business, or the business notices an irregularity in the bookkeeping.
4. Payroll Fraud
Payroll fraud happens when an employee in a position of trust includes non-existent employees in the payroll. When the “employees” are paid, the embezzler will collect their pay for themselves. Payroll fraud is common among employees who either have access to the accounts of the business or are responsible for hiring employees on behalf of the business.
Kickbacks are a form of bribery which occurs when the employee agrees to receive a gift, advantage, or payment for allowing a vendor to continue being in business with the employer. Such kickbacks could be negative to the employer, especially if the vendors are not providing quality items or are overcharging their products or services.
6. Overtime Fraud
Employees who are paid on an hourly basis, or can collect over time are likely to engage in overtime fraud. This occurs when an employee collects overtime benefits while he or she does not work overtime. The most common way this happens is by leaving the office without checking out, then returning to check out after some time. Overtime fraud can also include falsification of records to indicate that you have been working overtime when you have not.
Some employees also run embezzlement schemes by failing to record sales in the cash register or registering lower amounts than were paid. In other cases, the employee will fabricate computer records and accounts to defraud the employer. When such a scheme is uncovered, the employer can sue you for embezzlement.
Before he or she sues you, the employer will conduct an investigation and sometimes confront you. The employer may then call the officers to arrest you if they find sufficient evidence to prosecute you, how you handle yourself at this point matters significantly to your case.
Do’s and Don’ts During and After an Arrest
Shock, embarrassment, and fear are common reactions that most people experience when they are arrested for embezzlement. Some may try to convince the officers of their innocence or confess to the offense. Most of them end up making mistakes that incriminate them in court.
When officers inform you of their intention to arrest you, simply comply and be quiet. Attempting to defend yourself will often lead to self-incriminating remarks. Note that any confessions you make (not in reply to an officer's questions) will be used in court if they help the prosecution.
Defending yourself to a police officer is also counterintuitive since they do not have the authority to determine your guilt or innocence. If you feel the need to defend yourself, call your defense attorney and give him or her those details. The attorney will use the information to help you build a strong defense. Even if you are guilty, there are channels to reduce the charges you are facing or minimize sentencing.
Do not allow the officers to search your premises or vehicle unless they have a valid warrant. The zeal in some police officers could lead to the discovery of incriminating evidence, which could lead to additional charges. If an officer insists on searching your premises without your permission or a warrant, and you do not pose a threat, then you can use the defense of illegal search and seizure to prevent the evidence collected unlawfully from being used against you.
In some cases, you can avoid the arrest if an officer finds you inside your house without a warrant. Request to see the warrant for your arrest. However, do not attempt to run from the officers as this could lead to additional charges and unnecessary injuries.
Attempting to resist arrest can lead to additional penalties or increase the offense to a felony, especially if you assault an officer.
Whatever you do, always remember your right to remain silent when questioned by an officer. Direct the questions, offers, and any discussions concerning your case to your defense attorney.
The penalties for embezzlement depend on whether it is classified as petty or grand theft. The circumstances surrounding the offense, as well as aggravating and mitigating factors, play a role in the penalties. Some of the aggravating factors include:
- The victim is an elderly person
- The prosecution can prove that you actually intended to commit the offense
- Prior convictions for embezzlement or related offenses
- Multiple victims of the offense
- You used a weapon
- Criminal gang activities
These factors could lead to stricter penalties. However, if there are mitigating factors, then the penalties are significantly reduced. Mitigating factors include:
- A first offense
- You played a small role in the offense
- You committed the offense due to coercion
- You returned the embezzled funds before the arrest
Embezzlement will be convicted as either petty or grand theft based on whether the value of the embezzled property is higher than or less than $950.
Embezzlement of property or money whose value is less than $950 is petty theft, which is a misdemeanor in California. Petty theft charges also apply to defendants who embezzle money or property whose worth does not exceed $950 in 12 months. The penalties will include:
- Summary probation
- Time in a county jail not exceeding six months
- A fine nor exceeding $1000
You will be convicted for grand theft if:
- The value of the embezzled property exceeds $950
- You embezzled a firearm
- You embezzled an automobile
Grand theft is a wobbler depending on your criminal history and the facts of the case. When convicted as a misdemeanor, you may spend a year in county jail and pay a fine of up to $1000. You may be sentenced to misdemeanor probation instead of jail time.
When convicted as a felony, the penalties include:
- Sixteen months, two or three years in county jail if the offense does not involve embezzlement of a firearm. Where a firearm is involved, this time is spent in state prison
- Fines not exceeding $10,000
- Formal probation
The court may impose additional sentence enhancements for felony offenses that cause a loss of high monetary value to the victim. These sentence enhancements include:
- An additional year for a property whose value exceeds $65,000
- Two years for property valued at more than $200,000
- Three years if the property value exceeds $1,300,000
- Four years for a property whose value is more than $3,200,000
Defending against embezzlement charges is the best option you have to avoid or minimize the consequences of a conviction. Your lawyer will apply these defenses at the pretrial and trial phases.
The legal requirement that the prosecution proves every element of the offense beyond a reasonable doubt allows the defense enough room to apply various defense techniques. Your lawyer will advise you on the best strategy to use.
Whatever you choose, the best decision you can make when facing charges for embezzlement is to hire an experienced attorney.
Some of the defenses your attorney can use include:
1. Lack of Intent
The intent to defraud the victim must exist for you to be charged with embezzlement. However, if the act was accidental, you can show that you did not intend to defraud him or her. This defense is useful where you were caught after the first offense. Repeated offenses are a likely indication that you intended to embezzle the funds or property.
The circumstances of the offense will also determine whether this defense is applicable. For example, if you create a fake invoice and use it to defraud the employer, it shows that you acted with intent. However, if you mistakenly include an item that has not been sold in the sales register, this defense might work for you.
You can also use mental incapacity at the time of the offense to show a lack of intent. Voluntary intoxication does not serve as a defense in this case. However, if you were under medication, which caused you to use the property entrusted to you like embezzlement, then you can use this defense.
Note that the prosecution will examine your lifestyle at the time the embezzlement took place (especially when large sums are involved). Other records it will check include bank statements, accounts you have opened, and your debts.
You may also prove a lack of intent if you acted under duress from another person or due to entrapment. When using duress as a defense, you must demonstrate that the responsible party used threats or violence to coerce you into committing the offense. However, you cannot use duress as a defense for pressure from your pending bills or financial responsibilities.
When investigating embezzlement, the investigators focus on catching the embezzler committing the offense. Entrapment occurs when a government or law enforcement official induces you to commit an offense that you would not have committed. Entrapment will often get your charges dismissed. For example, if a law enforcement official suggests cashing the employer’s checks and falsifying books to cover up, he or she commits entrapment. Entrapment can work, especially where the results of the entrapment are the main evidence against you.
3. Insufficient Evidence
The prosecution must have sufficient evidence to prove each element of embezzlement beyond a reasonable doubt. If it cannot obtain such evidence to show that you are guilty of embezzlement.
You can also indicate that the statute of limitations for the offense is expired. California has a 4-year statute of limitations on embezzlement. The clock starts ticking when the fraud is discovered, or when the last offense was committed, whichever comes later.
4. False Accusations
False accusations are common in embezzlement cases where the "victim" accuses the defendant of committing the crime either for revenge, jealousy, greed, or to cover his or her own actions. False accusations are unfair to you and can have greater consequences, including fines, incarceration, and mental anguish.
Therefore, you need to hire an attorney who understands how to fight false accusations and uncover the truth.
5. You Did Not Embezzle Funds
You may be accused of committing embezzlement even when you are engaging in legal activities. For example, if you make large and regular deposits into your account (which are larger than normal), the banks and law enforcement may term it as suspicious activity.
The law enforcement officials may then launch an investigation into your business. They will conduct an audit of your records to look for patterns of illegal behavior.
If you are a victim, you can hire a forensic accountant to go through your books and testify that the transactions are legal.
6. You Believed That You Had a Right to the Property
If you had good faith in believing that you had a right to the property, then you cannot be guilty of embezzlement. For example, if you believe that something was bequeathed to you, and did not try to hide the property when taking or using it, then you can use this defense successfully.
The prosecution could bring additional charges alongside embezzlement, especially if you choose to proceed to trial. These additional charges arise from the circumstances surrounding the offense, including the age of the victim, whether you used violence, and the steps you took to commit the embezzlement.
The common additional charges related to embezzlement include:
Forgery is a common offense charged alongside embezzlement. When you engage in any form of forgery by knowingly altering, creating, or using a written document to commit embezzlement, the prosecution might include forgery as an additional charge.
Forgery in California is a wobbler with a potential jail term not exceeding one year for a misdemeanor offense or a county jail sentence of 16 months, two or three years for a felony offense.
2. Burglary PC 459
You can be charged with both burglary and embezzlement if you enter the home or premises of a person with whom you have a fiduciary relationship intending to embezzle funds. Burglary is convicted as a wobbler based on whether the premises were inhabited. The penalties may increase if you committed other offenses such as assault or battery.
3. Embezzlement of Public Funds PC 424
PC 424 is an offense committed by people who have access to government funds or resources. The offense is separate to embezzlement by a public officer, which requires that a government employee commit the embezzlement.
The offense occurs when the person responsible lends or uses the funds without the authority of the government, falsifies financial records, or fraudulently destroys such records that relate to government funds. The offense is a felony with a potential sentence of 16 months, two or three years in state prison.
4. Embezzlement by a Public Official
If a government official embezzles public funds, he or she is guilty of either petty or grand theft. The penalties will depend on the value of the embezzled funds or resources.
Other offenses that may occur together with embezzlement include business hacking, identity theft, and data theft. In most cases, the prosecution can offer a plea deal that does not include these additional charges in exchange for a guilty plea. If the evidence against you is overwhelming, then proceeding to trial can result in longer sentencing and more severe consequences than settling for the plea deal. Your lawyer can also use defenses specific to these charges to help you fight them.
Find a San Jose Criminal Defense Attorney Near Me
Embezzlement can affect your reputation or result in serious consequences such as jail time or incarceration in state prison. Such consequences can interrupt your life greatly and derails your progress in pursuing your goals. However, with the right criminal defense attorney, you can fight the charges against you dismissed or reduced charges and acquittal or reduced sentencing. The California Criminal Lawyer Group specializes in providing criminal defense services to people accused of various crimes, including embezzlement in California. We are familiar with the laws surrounding the crime, past cases, and how the rulings on these cases affect you. We strive to get the best outcome for our clients. Contact us today at 408-622-0204 if you or a loved one is facing charges for embezzlement. We offer a free consultation where we will discuss your case, the circumstances, and the possibilities.
If you are looking for a San Diego criminal attorney check out these law firms: San Diego Criminal Lawyer