What Constitutes Embezzlement?
The overall median loss reported in fraud cases in the United States and Canada in 2020 was $120,000. Employee theft comprised 44% of all cases with a median loss of $60,000. Theft by company owners and executives comprised only 21% of cases but resulted in an enormous median loss of $438,000. At whatever level theft occurs, the financial impact can devastate a business.
If you know or believe an employee, manager, owner, or executive is embezzling from your company, you need to not only stop it from continuing but take action to pursue repayment for your losses. To do this, you need experienced, knowledgeable, and aggressive legal representation.
At Wood Litigation, APC, we have helped clients recover millions of dollars in embezzlement losses in San Francisco, California, and the surrounding communities. From small cases to big ones, outside the courtroom and in front of a jury, our team at Wood Litigation, APC knows what constitutes embezzlement and how to litigate a case skillfully and efficiently.
California law defines embezzlement as the fraudulent appropriation of property by a person to whom it has been entrusted. Unlike theft, embezzlement reflects a fiduciary relationship between the property owner and the entrusted person. It is a white-collar crime that can be prosecuted both as a civil and criminal matter.
As an example, say a cashier is given the responsibility of taking customer payments for merchandise or services but pockets those payments instead. Or, a manager tasked with paying vendors for services rendered instead records payments to nonexistent vendors and keeps the money for himself. Another example could be an executive placing family members on the payroll and paying them for work that is never done.
Penal Code 503 PC
Proving embezzlement is not an easy task. Evidence of four facts is required to convict someone under California’s embezzlement laws:
- An owner entrusted his property to the defendant
- The owner entrusted the property to the defendant because they trusted the defendant
- The defendant fraudulently converted or used the property for their own benefit
- The defendant’s intent was to deprive the owner of the property and its use
Someone accused of embezzlement will attempt to prove they did not commit the act. Common defenses include:
- The property was not used fraudulently. The accused claims their use of the property, even if that use was taking possession of and profiting from it, was within their rights.
- The accused believed in good faith that they had a right to the property. In other words, the person claims the property owner conveyed the right for the accused to possess the property.
- The accused had no intent to deprive the owner of the property. The accused claims they would have returned the property if the owner had asked to have it back but since the owner did not, it was acceptable for the accused to possess it.
Criminal charges for embezzlement of assets valued at or below $950 is a misdemeanor and could result in up to one year in jail, a $1,000 fine, and full restitution to the property owner. Criminal charges for assets valued at more than $950 are felonies. Jail time, fines, and restitution are increased accordingly.
If state funds are involved, convicted criminals could go to prison and be ineligible to hold public office. There are also federal charges if state lines were crossed in the commission of the crime. Federal courts could sentence someone convicted at this level to up to 20 years per count.
Although restitution may be ordered in criminal cases, victims of embezzlement also have a right to pursue a civil claim against the wrongdoer on such grounds as breach of contract, conversion, and unjust enrichment. Many civil cases can be settled out of court via negotiation, however, if the plaintiff in a civil suit wins in court, the wrongdoer can be ordered to pay full restitution and, in some cases, reimbursement of the plaintiff’s attorney’s fees and other expenses incurred by the plaintiff.
Work with an Experienced Attorney
In simple terms, those who embezzle from others are thieves. Even if ordered to pay restitution as the result of a criminal conviction, restitution often isn’t enough when you have incurred expenses beyond the appraised value of your property. Consider the cost of security systems you never needed before, attorney’s fees, lost interest, or depreciation on stolen assets.
At Wood Litigation, APC, our team makes no excuses for aggressively pursuing negotiation and civil litigation to help restore to our clients what they have lost. We represent clients in San Francisco, San Jose, Oakland, San Mateo, Santa Clara, and Alameda, California.
We have helped clients collectively recover millions of dollars in civil embezzlement cases. Call our office today to schedule a consultation to discuss your claim.