Wood Litigation, APC
The Necessary Elements of Embezzlement in California
Of the two scenarios below, which one do you think can be charged as embezzlement?
- A salesman is given the company credit card to cover lodging, meals, entertainment, and expenses while on the road to promote his company’s services, and he rings up $10,000 in charges for three nights of entertaining clients.
- An employee who is tasked with depositing cash from each day’s sales into the bank on their way home takes a portion to cover his gambling debts, fully intending to pay the company back once he “wins” again.
The salesman can be fired for overspending and abusing his privilege, but he did not embezzle, per se. The bank depositor, on the other hand, has taken money not belonging to him to use for his own purposes. The result of his actions: embezzlement.
Embezzlement is also known as employee fraud, as it often involves employees who dip into company funds for their own gain.
If you’re an employer suspecting embezzlement by an employee in or around San Francisco, California, contact us at Wood Litigation, APC, for a case evaluation. We can help you determine whether embezzlement has occurred and advise you on what steps you need to take. Both criminal and civil actions may be available to seek restitution.
Embezzlement in California
California Penal Code 503 PC states that “embezzlement is the fraudulent appropriation of property by a person to whom it has been entrusted.” Therefore, the salesman in the example above did not fraudulently appropriate company property but used poor judgment when given what he took to be carte blanche to use a credit card for business expenses. The employee with bank deposit responsibilities did indeed fraudulently appropriate money entrusted to him that belonged to the company.
Elements Needed to Establish Embezzlement
To obtain a conviction for embezzlement in California, four elements must be jointly proved:
- An owner entrusted his property to the defendant
- The owner did so because he trusted the defendant
- The defendant fraudulently converted or used the property for his own use
- The defendant intended to deprive the owner of its use
In other words, there must be a relationship of trust, coupled with fraudulent use of property and an intent to deprive. Just being an employee does not necessarily imply a relationship of trust. A waiter who serves tables is not necessarily in a relationship of trust with their employer.
Fraudulent means to take undue advantage of another or cause a loss to that person by breaching a duty, trust, or confidence. Intent to deprive must also be shown for a guilty verdict, even if the intent is only temporary. Simply vowing to return the money or property at some future time is not a defense against intent, unless the property is actually returned before a charge is made.
Embezzlement of property of up to $950 in value is a misdemeanor with possible penalties of up to one year in jail, a $1,000 fine, and full restitution to the owner. Embezzlement of property worth more than $950 can be charged as a felony punishable by up to three years in jail, though in certain cases it is considered a “wobbler” offense that can be charged either as a misdemeanor or a felony. Misdemeanor embezzlement is treated much like a petty theft offense, while felony embezzlement is treated as a grand theft offense.
Victims of embezzlement also have a right to pursue civil litigation against the perpetrator on grounds of breach of contract, conversion, and unjust enrichment.
If the four elements of embezzlement cannot be proven, other charges may be available to be brought against the defendant. These include:
- Petty Theft – California Penal Code Section 484(a) PC
- Grand Theft – California Penal Code Section 487 PC
- Forgery – California Penal Code Section 470 PC
- Receiving Stolen Property – California Penal Code Section 496(a) PC
- Burglary – California Penal Code Section 459 PC
Work with an Experienced
At Wood Litigation, APC, we have helped clients recover millions of dollars in embezzled funds. We pursue both aggressive negotiations and civil litigation to help you recover what you’ve lost.
Once you’re on board with us, we will conduct a full investigation and determine which actions will lead to the optimal results, even if it means weighing parallel criminal proceedings along with civil litigation against the suspected employee.
If you’re in or near San Francisco, San Jose, Oakland, San Mateo, Santa Clara, or Alameda, California, contact our team at Wood Litigation, APC immediately.