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Embezzlement?

If you or a loved one has been arrested for embezzlement, it is critical that you contact Los Angeles Criminal Lawyer immediately. Theft is known as a “crime of moral turpitude”, which can have a significant impact on your life if you are convicted. Having a skilled attorney on your side can help mitigate the impact of a conviction in the unfortunate even that you are found guilty. Additionally, theft crimes have a number of elements the Prosecution must prove, giving your LACL attorney ample opportunities to defeat the Prosecution’s case against you. Finally, theft crimes are “specific intent crimes”, which will provide your LACL attorney with a number of potential defenses they can raise.

The crime of embezzlement is defined in California Penal Code §503 is a unique crime when compared to the other Crimes Against Property. In order to be convicted, the Prosecutor must prove beyond a reasonable doubt that the Defendant formed intent to deprive the rightful owner of the property after the property had ben lawfully transferred to them. Every other Crime against Property requires that the property was not lawfully in the possession of the Defendant at the time of the crime. The crime of Embezzlement is designed to combat a common defense to Crimes Against Property; that the Defendant was in lawful possession of the property. The crime of Embezzlement was created to make culpable conduct punishable under the law when someone takes advantage of a relationship with the Victim, and abuses that trust for their own benefit and to the detriment of the Victim.

Example:

Mike works for a high end marketing firm. One of the perks of the job is that Mike gets his own company car so that he can conduct work. The marketing company puts the car in Mike’s name, but insures all the vehicles against accident. One day Mike decides he needs some extra spending cash, and he doesn’t mind using public transportation. Mike sells the car to Dan for $10,000. Mike can be convicted of Embezzlement. Mike is in lawful possession of the vehicle, and has lawful ownership of the vehicle. The reason Mike has lawful possession and ownership of the vehicle is because of his relationship with the marketing firm he works for. After Mike had lawful possession and ownership of the vehicle as a result of his relationship with the marketing firm, he developed to use the vehicle for his own gain (obtain some extra spending cash), with the intent of permanently depriving the marketing firm of their property. Since the car is worth more than $950, Mike could be guilty of Grand Theft by Embezzlement.

It bears repeating that Embezzlement is fundamentally different from other Crimes Against Property. The crime of Embezzlement is completed the moment the Defendant forms the intent to permanently deprive someone else of the benefit of the property they gave you lawful possession of based on the trusting relationship. The reason for this is until the Defendant develops that intent; the property is lawfully in their possession, which cannot be a crime. Once the culpable intent is formed, the Defendant has transformed lawful possession into the crime of Embezzlement. It should be noted that as a practical matter, it will be incredibly difficult for the Prosecution to prove when that happened; frequently the evidence is that the Defendant actually deprived the person of the benefit of the property they provided the Defendant. As a matter of law however, the crime of Embezzlement is complete the moment the Defendant has formed the requisite intent.

California has slightly stiffer rules on Embezzlement than other jurisdictions. In California, it can also be deemed Embezzlement if the Defendant utilizes property they have been entrusted with as a result of their relationship with the Victim in a manner that substantially interferes with the Victim’s enjoyment and use of that property. For example, Mike in the example above knows that when his employment is terminated, he will be expected to return the company car to the marketing firm. While he is employed, he frequently smokes and eats in his car. This has resulted in a permanent smell, and stains that simply will not come out. Further, the car has been in numerous accidents as a result of Mike using the vehicle in a manner that was unrelated to work. Mike could be found guilty of Embezzlement simply because he utilized the vehicle in a manner that ultimately would deprive the marketing company of the use and enjoyment of the vehicle after Mike ended his employment with them.

What is Embezzlement?

The crime of embezzlement is set forth in California Penal Code §503. The jury instructions for Theft by Embezzlement can be found in CALCRIM 1806. This crime occurs when, because of the relationship between the Victim and Defendant, the Victim willingly gave property to the Defendant. These situations occur when someone provides the Defendant with property to keep safei, or any other fiduciary relationship. Further, when the Defendant took the property, his intent at the time was to use the property for his own gain, and to deprive the true owner of the property’s value. To be convicted of Theft by embezzlement the Prosecutor must prove 3 elements beyond a reasonable doubt:

  1. The Victim willingly gave the property to the Defendant based on a trusting relationship
  2. The Defendant used the property they were entrusted with for their own benefit;
  3. At the time the Defendant took the property, they intended to permanently deprive the true owner of the property.

Example:

Tom works for Vince investing his money in stocks he believes will be profitable in the short-term. One month Tom realized he would not have enough money to pay his mortgage, and decided he’d use some of the money Vince gave him monthly to pay his mortgage. On the 15th Vince gave Tom the monthly amount, and Tom used that money to pay his mortgage. Tom can be convicted of Theft by Embezzlement. Vince gave Tom money based on their continuing fiduciary relationship where Tom invested money for Vince. At the time Tom took the money from Vince, it was for the purpose of paying his mortgage, and there is no evidence that Tom did not intend to deprive Vince of the benefit of the money’s use.

It is a fundamental principal of criminal law that in order to be convicted of a crime, the Prosecution must prove every element beyond a reasonable doubt. As such, it is important to be aware of every element of the crime of Embezzlement. The attorneys at Los Angeles Criminal Lawyer have decades of combined experience representing clients against a variety of criminal charges; including Embezzlement. With their thorough understanding of the elements of Embezzlement, Los Angeles Criminal Lawyer will find the holes in the Prosecution’s case against our clients, and expose them to the jury. If the Prosecution is unable to convince the jury that every element of the crime is present, the Defendant cannot be convicted of “embezzlement.” The remained of this article will focus on: (1) The differences between Embezzlement and other Crimes Against Property, (2) The elements the Prosecution must prove in order to convict you of Embezzlement (3) Examples of relationships that satisfy the trusting relationship aspect of the crime of embezzlement, (4) The penalties associated with a conviction for Embezzlement; and (5) What Los Angeles Criminal Lawyer can do for you if you have been accused of Embezzlement.

How is Embezzlement Different From Other Forms of Theft?

The crime of Embezzlement is notably different from the other theft crimes in the Theft section of this website.

Theft By Larceny

In contrast to Theft by Larceny, Embezzlement requires that the property be in the lawful possession of the Defendantii, whereas to be convicted of Theft by Larceny, the Defendant must have taken the property of another person.

Theft by Trick

The difference between embezzlement and Theft by Trick is nearly identical in that to be convicted of Theft by Trick; the person must be persuaded to turn over possession of their property as a result of a misrepresentation or other form of fraud on the part of the Defendant. In contrast, Embezzlement requires that the Defendant was willingly given the possession of the property as a result of a trusting relationship between the Victim and the Defendantiii.

Theft by False Pretense

Embezzlement is different from Theft by False Pretense for similar reasons to Theft by Trick and Theft by Larceny. To be convicted of Theft by False Pretense, the Victim must have willingly conveyed both their possessory interests and their ownership interests in property as a result of the Defendant’s false pretenses. Embezzlement however requires that the Defendant is in lawful possession of the property as a result of a trusting relationship between the Victim and the Defendantiv.

Robbery

Robbery is the act of taking the property of another by force, or threat of force. The distinction once again, is that the Victim willingly gave the property to the Defendant as a result of their relationshipv.

Burglary

Burglary is the breaking and entering into a residence with the intent of committing a felony therein. Once again, Embezzlement requires that the Defendant have received the property from the Victim both freely and voluntarily as a result of their relationship. Another distinction between the two crimes is that for a burglary to occur, the intent to commit a felony must be formed before the breaking and entering, whereas the intent to permanently deprive the true owner of the property can be developed at any point while the Defendant is in lawful possession of the propertyvi.

It should be clear that the crime of embezzlement depends on the voluntary transfer of possession from the Victim to the Defendant. Further, the voluntary transfer must be based on a specific type of relationship between the Victim and the Defendant.

What Type of Relationship Must the Victim and Defendant Have for the Crime of Embezzlement to Occur?

The first element that must be proven by the Prosecutor is that the Victim gave the Defendant the property willingly, and the reason it was given was because of the relationship between the Victim and the Defendant. Further, it is critical that the relationship between the Victim and Defendant be one of either trust, or a relationship where the Defendant owes the Victim a legal duty regarding their property; if this is not present, the Defendant may be facing Theft by Larceny or Theft by Trick charges, but not Theft by Embezzlement. An individual who owes the Victim a legal duty to handle the Victim’s property for the benefit of the Victim, they are said to owe a “fiduciary duty” to the Victim. The law understands that not all trusting relationships arise from legal obligations, so Embezzlement also applies to non-legal relationships that are based on trust. It is important to note that in the event the Prosecution is pursuing an Embezzlement charge on the basis of a trusting relationship, they will have to present a substantial amount of circumstantial evidence, which will provide your attorney from Los Angeles Criminal Lawyer ample opportunity to poke holes in the Prosecutor’s case against youvii.

What Are Some Examples of Fiduciary Relationships?

In order to convict and individual of Embezzlement, it is important that the Prosecution prove that the reason the Defendant was given the property was because of a legal or trusting relationship. Below are a few examples of a relationship where the law implies a duty not to betray the trust of the other person.

Many people set up a trust for the benefit of someone, or something, else. The person who puts the property into the trust is known as the “trustor.” When the trust is created, the trustor designates someone to hold the property and distribute according to the terms of the trust, this person is known as the “trustor.” Finally, the person the “trustor” is distributing the trust property (also known as the “res”) to is the “beneficiary” of the trust. The law imposes a duty on the trustee to manage the property for the sole benefit of the beneficiary; even the slightest misappropriation of trust property can be deemed Embezzlement.

In many situations, a minor is appointed a guardian by the court, making the child a ward of the guardian. The law imposes a duty on the guardian to care for the child using the assets that are available to them; if Child A’s parents die and wish for Child A to go to Friend B, and provides $100,000 to Friend B for the purpose of caring for Child A, a Guardian/Ward relationship has been created. Even the slightest misappropriation of the $100,000 for anything other than caring for Child A could be considered embezzlement.

There are a large number of relationships that will satisfy the first element of Embezzlement, it must be stressed again however, that in order to be convicted for Embezzlement the legal or trusting relationship must be because of the legal or trusting relationship. If Dan is Vince’s stockbroker, but Vince gave money to Dan willingly because he Dan lied to him about what it was for (car repair when he was really using it for vacation), he cannot be convicted of Theft by Embezzlement. Once the Prosecution proves that the Victim willingly gave the Defendant the property because of their relationship, the Prosecution must then prove that the Defendant actually did something improper with the property.

What Does the Defendant Need to Do With the Victim’s Property to be Convicted of Embezzlement?

The next element to be proven by the Prosecution in an Embezzlement case is that the Defendant converted the property. More specifically, they used it for their own benefit beyond the scope of use envisioned by the Victim when they gave the Defendant the property as a result of the relationship between them. This can be accomplished by using it in a manner that was not envisioned by the Victim when they willingly provided the Defendant with the property, or using the property in a manner beyond the scope of the instructions that were provided by the Victim; provided the use is for the benefit of the Defendant.

It is essential that the Defendant use the property in a manner that is inconsistent with the purpose of them having the Victim’s property in the first place, and in a manner that is beneficial to the Defendant. If Dan is Vince’s stock broker, and Vince hands Dan $10,000 in cash during lunch, it is not Embezzlement if Dan accidentally forgets the money on the table and loses

Permanently Deprive the Owner of the Property

As mentioned in every other article on Theft in this website, Theft crimes are “specific intent crimes.” This means that in additional to proving that the Defendant engaged in specific conduct, the “actus reas”, the Prosecution must also prove that at the time of the act, the Defendant had a specific outcome in mind, the “mens reas.” The specific intent of the crime of Embezzlement is that while the Defendant was lawfully in possession of the property, they developed the intent to permanently deprive the true owner of that property. This is in stark contrast to the crime of burglary, which requires that the intent be formed prior to breaking and entering. “Permanently deprive” encompasses more than a total loss to the Victim, it can be accomplished if the Defendant uses the property in such a way that the Victim is deprived of a “major portion” of the use and enjoyment of the property. Further, “permanently deprive” can also be interpreted to mean using the property in a manner that is significantly outside the scope of the purpose you were entrusted with the property in the first place. There are many definitions of the requisite intent for Theft by Embezzlement, having skilled representation will provide you the best opportunity to defeat the Prosecution’s proof of this element.

I Have Been Convicted of Embezzlement, What Penalties Could I be Facing?

California Penal Code §514 clarifies that the penalty for embezzlement is the penalty associated with the type of item stolenviii, or the value of the item stolen. If you are curious about the various forms of theft, please view our pages on Petty Theft and Grand Theft; the distinction between the two is the value of the property that was taken. If the value of the property is less than $950, it is a petty theft. If the value of the property is over $950, it is a grand theft. Since a petty theft, without more can only be charged as a misdemeanor, it is important to have competent counsel. A major argument skilled attorneys put forth when their clients have been charged with a felony grand theft crime, is that that the value of the property is under $950, and cannot be charged as a felony.

Grand theft is a “wobbler offense”, which means the prosecutor can choose to bring the charges against you as either a misdemeanor, or a felony. When charging a Defendant with Grand Theft Embezzlement, the Prosecutor will typically take into account the value of the property takenix, and how the Defendant used the property.

If you are convicted of misdemeanor embezzlement, you will face up incarceration in county jail for up to one (1) year and/or a fine of one-thousand ($1,000) dollars.

If you are convicted of felony embezzlement, you will face incarceration in state prison for a period ranging from sixteen (16) months, two (2), or three (3) years and/or a substantial fine.

If you are convicted of petty theft by embezzlement, you will be charged with a misdemeanor and face incarceration in county jail for a period not exceeding six (6) months and/or a fine not exceeding one-thousand ($1,000) dollars.

I Have Been Charged with Embezzlement, What Can Los Angeles Criminal Lawyer do for Me?

If you or a loved one has been accused of Embezzlement, it is critical that you obtain legal counsel immediately. In addition to the possibility that you may be facing felony charges, Embezzlement is a crime of moral turpitude. The practical effect of a conviction for a crime of moral turpitude cannot be understated. If you are ever facing criminal charges involving dishonesty in the futurex, the Prosecutor will introduce all your prior convictions to the jury, making it much more difficult to obtain a favorable outcome. Your career could be at risk as well with a conviction for a crime of moral turpitude. Many employers perform background checks to investigate the history of people they are considering hiring. Crimes of theft, especially embezzlement are frequently absolute bars to employment. The reason embezzlement is treated more harshly is that embezzlement requires an element of betraying the trust of the person who gave you the property in the first place. Finally, crimes of moral turpitude can have a significant impact on licenses you currently hold, and licenses you hope to obtain in the future.

If you have been accused of Embezzlement, it is critical that you contact Los Angeles Criminal Lawyer immediately. The sooner you contact LACL for your free consultation, the more time your attorney will have to build the strongest defense possible. Your attorney will attempt to persuade the District Attorney to dismiss the charges against you, or reduce the charges against you. If that doesn’t work, your LACL attorney will bring present a thoroughly prepared defense to the jury during your criminal jury trial. In the event that you are convicted of Embezzlement your LACL attorney will advocate for the lowest penalties available. During trial, your attorney will raise a number of defenses to your cases including:

  • You did not gain possession of another person’s property, the property belonged to you;
  • You never intended to permanently deprive the true owner of the benefit of the property;
  • Your use of the property was within the scope of the purpose you were given the property for;
  • You are not the person who committed the crime;
  • Your relationship with the Victim was not sufficient; AND
  • You did not use the property for your own benefit

If you or a loved one has been accused of Grand theft, contact Los Angeles Criminal Lawyer at 310-502-1314 immediately for a FREE consultation


i This is known as a bailor/bailee relationship

ii See our page of Petty Theft and Grand Theft for more information about the crime of Theft by Larceny.

iii Id.

iv Id.,

v For more information on Robbery, see our Robbery page.

vi For more information on Burglary, see our Burglary page.

vii In contrast, if the Prosecutor is pursuing charges against you based on a “fiduciary duty”, they will only need to present evidence of that relationship (e.g., you are the Victim’s stock broker, mechanic, personal assistant, etc.,

viii See our page on Grand Theft; taking specified animals carries a different penalty than other types of property.

ix The closer the value is to $950, the less likely the Prosecutor is to pursue the charge as a felony.

x Generally speaking, the Prosecutor cannot introduce convictions that are older than 10 years, but there are certain situations where this is not the case.

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