Call Today! Free Immediate Response 877-781-1570

CRIMINAL LAW BLOG

Review of California’s Embezzlement Laws

Posted by Dmitry Gorin | Sep 01, 2021 | 0 Comments

The Crime of Penal Code 503 PC Embezzlement and Best Defenses

California Penal Code 503 PC defines the crime of embezzlement as the fraudulent appropriation of property by someone to whom it has been entrusted.

The primary difference between an embezzlement offense and the typical theft related crime is the requirement that the property had been entrusted to you by the owner.

California's Embezzlement Laws - Penal Code 503 PC
PC 503 embezzlement is called "employee theft" as it's taking property by a person who was trusted.

Put simply, to be convicted of PC 503 embezzlement, it has to be proven you legally had possession of the property or were given permission to access it. A conviction can result in some harsh penalties.

Most cases of embezzlement in California will fall under the umbrella of employee theft.

For example, when an employer allows an employee to hold or manage their goods or money, but they violate the trust given to them by taking the property for their own benefit.

Embezzlement cases are also called a white collar crime that can become a highly complex Ponzi scheme that are is primarily designed to defraud victims of their money.

For example, the famous case of Bernie Madoff, who was a stock broker that was convicted of embezzling billions from his investors.

Embezzlement is a fraudulent act when someone, typically an employee, who was trusted takes advantage of the person who trusted them resulting is a loss.

Our Los Angeles criminal defense lawyers are reviewing the laws more closely below.

What is the Legal Definition of Embezzlement?

California Penal Code 503 PC defines the state's embezzlement crime in a single sentence:

  • “Embezzlement is the fraudulent appropriation of property by a person to whom it has been entrusted.”

As noted, embezzlement typically involves the defendant unlawfully taking property entrusted to the defendant, intending to deprive the property's owner of it.

Penal Code 509 PC cautions, though, that a “distinct act of taking is not necessary to constitute embezzlement.”

The defendant may not necessarily move, conceal, and secrete the property, but may instead simply exercise control over it contrary to the owner's consent and wishes.

The fraud that Penal Code 503 requires as an element of the embezzlement crime lies in the defendant's misappropriating the property when the owner reasonably assumes that the defendant is instead a trustworthy custodian.

Embezzlement is the crime one associates with professionals, such as bookkeepers, financial advisors, and accountants, to whom one entrusts property. Embezzlement is, in other words, generally a form of so-called white collar crime.

In order to convict someone, the prosecutor has to prove all the elements of the crime listed under CALCRIM 1806 California Criminal Jury Instructions:

  • owner entrusted their property to the defendant,
  • owner acted this was because they trusted them,
  • defendant fraudulently used the property for their own benefit,
  • defendant had intent to deprive the owner of its use.

What are Some Other Forms of Embezzlement Crimes?

California's Penal Code defines several additional specific forms of embezzlement, applying to different actors under different circumstances. Those forms include:

  • Penal Code 504 PC - embezzlement by public officials or corporate officers,
  • Penal Code 504a PC- embezzlement of leased property held for purchase,
  • Penal Code 504b PC - embezzlement of secured property by the debtor who fails to account to the secured creditor,
  • Penal Code 505 PC - embezzlement of transported property by carriers,
  • Penal Code 506 PC - embezzlement of funds entrusted to trustees and contractors,
  • Penal Code 506a PC - embezzlement of funds collected by persons in the business of collecting accounts for others.

What are Some Examples of Embezzlement?

As noted above, embezzlement can arise whenever someone entrusts property to another.

Embezzlement crimes, charges, and allegations thus often involve positions and relationships of trust.

Trustees, guardians, and custodians may find themselves answering to embezzlement allegations when their beneficiaries or wards disagree with the sale, disposition, reporting, or other management of trust funds and properties.

Embezzlement allegations can occur in these typical situations:

  • a beneficiary claims that the trustee absconded with missing funds;
  • a client claims that a financial advisor secreted investments for his own benefit;
  • a disabled homeowner claims that a home health aide pawned personal property the homeowner lent to them;
  • a business owner alleges that the bookkeeper diverted funds from the business's checking account; and
  • nonprofit leadership claims that the organization's treasurer stole donated gifts and contributions.

What are the Punishments?

Defendants charged with embezzlement may face either misdemeanor or felony punishments, known as a “wobbler,” depending on the value of the embezzled property.

What are the Punishments for Penal Code 503 embezzlement?
Embezzlement can be charged as either a misdemeanor or felony crime in the state of California.

Penal Code 488 PC petty theft can be charged if the value of the property was under $950 and is a misdemeanor punished by up to six months in the county jail.

Penal Code 487 PC grand theft embezzlement distinguishes between the misdemeanor-or-felony forms of the embezzlement crime.

Embezzlement of property worth more than $950 can result in felony charges, carrying a sentence of up to three years in state prison and payment of victim restitution.

Penal Code 515 PC elevates the embezzlement crime to an aggravated offense when the victim is elderly or dependent.

A felony embezzlement conviction in California can have negative immigration consequences and a convicted felon will be prohibited from owning or possessing a firearm.

What are the Related Crimes for Embezzlement?

Embezzlement differs from theft crimes in that embezzlement has an element of entrustment to it. With embezzlement, the defendant hasn't stolen the property.

The property's owner instead entrusted the property to the defendant, after which the defendant made off with the property. Related California crimes include:

  • embezzlement by a public official under Penal Code 504 PC;
  • receiving stolen property under Penal Code 496 PC;
  • grand theft under Penal Code 487 PC;
  • petty theft under Penal Code 488 PC;
  • misappropriation of public funds under Penal Code 424 PC;
  • burglary under Penal Code 459 PC;
  • forgery under Penal Code 470 PC;

What are the Best Defenses?

Defendants charged with embezzlement under Penal Code 503 may have several defenses.

Penal Code 511 PC authorizes a defense when the defendant has openly taken the property under a good-faith claim of right to do so, even if the claim is untenable. 

But under Penal Code 512 PC, the defendant's claim, after the embezzlement charge, to have intended to restore the property to its owner is not a valid defense.

Once charges ensue, the defendant has taken the property, regardless of his intent to give it back. Other defenses can include:

  • while controlling the funds or property, the defendant may not have intended to deprive the owner;
  • the defendant made reasonable disposition of the alleged victim's property, reasonably believing that disposition to be authorized;
  • someone other than the defendant took the property without the defendant's knowledge or authorization;
  • the defendant owned the property or had other rights to the property under a lease or other contract;
  • the defendant had the lawful right to possess, repossess, or otherwise take and dispose of the property.

If you are under an investigation, or already arrested and charged with violating Penal Code 503 embezzlement laws, contact our defense lawyers to review all the details and legal options.

Best Defenses for Penal Code 503 PC embezzlement
Contact our law firm for help with your case.

Through negotiation with the prosecutor, we might be able to get the charges reduced or even dismissed.

Additionally, if we are retained early in the case process, we may be able to persuade the District Attorney's Office from filing formal criminal charges before court.

This process is known as prefiling intervention and is negotiation with law enforcement and prosecutor to convince them not to file charges.

We are former Los Angeles County prosecutors and are Certified Criminal Law Specialist in the state of California.

Put simply, we know how the prosecution will attempt to build their case against you.

Eisner Gorin LLP is located in Los Angeles County and serves clients throughout Southern California.

For an initial consultation, call our law firm at (877) 781-1570.

About the Author

Dmitry Gorin

Find me on Google+ Dmitry Gorin is a licensed attorney, who has been involved in criminal trial work and pretrial litigation since 1994. Before becoming partner in Eisner Gorin LLP, Mr. Gorin was a Senior Deputy District Attorney in Los Angeles Courts for more than ten years. As a criminal tri...

Comments

There are no comments for this post. Be the first and Add your Comment below.

Leave a Comment

Comments have been disabled.

We speak English, Russian, Armenian, and Spanish.

If you have one phone call from jail, call us! If you are facing criminal charges, DON'T talk to the police first. TALK TO US!

CALL TOLL-FREE
877-781-1570
Anytime 24/7

Menu