Embezzlement charges under California Penal Code Sections 503 to 515 can destroy a person's career, professional standing, and personal life. These white-collar allegations often arise from workplace conflicts, financial disputes, or misunderstandings involving entrusted property. If you have been accused of embezzlement in California, understanding the law and the defenses available is critical to protecting your future.

What Counts as Embezzlement Under California Law?

Under Penal Code Section 503, embezzlement occurs when someone who lawfully possesses another person's property fraudulently converts it for their own benefit. The key distinction from theft is that the accused had legitimate access or control over the property at the outset. Embezzlement involves a breach of trust, such as between an employee and employer or a fiduciary and client.

Examples of entrusted access may include payroll clerks, financial advisors, property managers, or company executives. These cases often overlap with related allegations involving identity theft or financial fraud, requiring a thorough review of the circumstances. In some complex financial cases, clients may also benefit from understanding how to beat federal identity theft charges and apply similar defense principles.

Key Elements the Prosecution Must Prove

To convict someone of embezzlement, California prosecutors must prove the following four elements beyond a reasonable doubt:

• Entrustment: The owner entrusted their property to the accused through a formal or informal relationship.
• Relationship of Trust: The entrustment occurred due to a relationship of confidence, such as employment or fiduciary duty.
• Fraudulent Conversion: The property was intentionally used for unauthorized personal benefit.
• Intent to Deprive: The accused intended to deprive the owner of the property, even temporarily.

Failure to prove even one of these elements can result in a dismissal or acquittal.

Who Can Be Charged with Embezzlement?

Embezzlement statutes in California apply broadly across industries and roles of responsibility:

• Corporate and Public Officers: Section 504 targets executives, board members, and agents in positions of financial control.
• Fiduciaries and Professionals: Section 506 applies to attorneys, bankers, brokers, and trustees misusing client funds.
• Custodians and Lodgers: Section 507 includes those holding property temporarily, such as tenants or bailees.

It is not unusual for people in these roles to be caught in disputes over financial management, especially when dealing with crypto-related assets. In such cases, issues of digital property handling may echo concerns discussed in virtual theft and why traditional insurance fails cryptocurrency holders.

What is the difference between embezzlement and theft?

While both embezzlement and theft involve the unlawful taking of property, the key difference lies in how the accused gained possession of the property. In theft cases, the property is taken without the owner's consent or prior access. In contrast, embezzlement involves a person who was lawfully entrusted with the property but then misused or misappropriated it for their own benefit.

For example, if someone breaks into a store and steals cash from a register, that is theft. But if an employee is given access to company funds and secretly diverts some of those funds for personal use, that is embezzlement. The breach of trust is what distinguishes embezzlement from general theft under California law.

Penalties for Embezzlement in California

Penalties are generally determined by the value of the property and whether public funds are involved:

• Petty theft: Property valued under $950 may result in misdemeanor charges and up to six months in jail.
• Grand theft: Property over $950 can lead to felony charges, with penalties ranging from probation to up to three years in state prison.
• Public funds: Embezzling public funds is always a felony, with mandatory prison terms and disqualification from holding public office in California.

Beyond the criminal sentence, an embezzlement conviction can result in professional license suspension, termination from employment, and permanent damage to personal and professional relationships.

Common Examples of Embezzlement

Real-life embezzlement cases vary widely. Some of the most common examples include:

• Falsifying Expenses: Submitting fake reimbursement requests, such as claiming client dinners that never occurred, to pocket extra cash.
• Manipulating Financial Records: Altering company accounts to conceal personal transfers or unauthorized payments.
• Creating Fake Vendors: Using dummy entities to invoice the company and siphon funds under the radar.

These schemes are often discovered through internal audits or whistleblower tips, leading to investigations that require expert legal defense.

Key Legal Defenses to Embezzlement Charges

A skilled criminal defense attorney can employ several strategies depending on the facts of the case:

Good Faith Claim of Ownership

Under Penal Code Section 511, defendants who took the property openly and with a good faith belief that it belonged to them may be shielded from conviction. This defense is especially strong if no attempt was made to conceal the conduct.

Lack of Criminal Intent

If the accused intended to return the property or misunderstood their right to use it, this can refute the necessary intent to permanently deprive. Evidence showing an honest mistake or miscommunication can be powerful in court.

No Trust Relationship

Charges often fail if there was no clear entrustment of property. Without a defined relationship involving trust or fiduciary duty, the prosecution may not meet its burden.

Insufficient Evidence

Prosecutors must show that fraudulent conversion actually occurred. If the accused was acting within the scope of their role or had authorization, charges may not hold.

Relevant Case Law Insights

In People v. Selivanov, the court upheld the good faith defense where defendants believed they were entitled to the property, despite legal complexities. This case highlights the importance of subjective belief in embezzlement defenses.

In People v. Stewart, the court found that temporary use of funds, with intent to return them, did not satisfy the intent to permanently deprive. This distinction often becomes central in white-collar cases.

Building a Strong Defense Early

Early legal action is critical. Experienced defense attorneys can:

• Gather and preserve key documents and digital evidence
• Engage financial experts to analyze transactions and audit trails
• Interview witnesses and assess the validity of alleged claims

In some cases, understanding the burden of proof related to underlying offenses, as explored in the corpus delicti rule, becomes essential in pretrial motions and trial strategy.

Resolving Embezzlement Cases Without Jail Time

Many embezzlement charges are resolved without prison. Some potential resolutions include:

• Restitution Agreements: Repaying the alleged loss can result in reduced charges or probation.
• Diversion Programs: First-time offenders may qualify for alternative sentencing that avoids a criminal record.
• Civil Settlements: Negotiating outside of court may prevent prosecution if the alleged victim agrees.

Minimizing Damage to Professional Licenses

Professionals must often report charges to licensing boards. Coordinating a legal strategy that includes administrative law representation can help preserve careers. Demonstrating remorse, restitution efforts, and preventative steps can favorably influence licensing outcomes.

What to Do If You Are Accused

Do not speak to investigators, employers, or anyone else about the case without an attorney. Save all communications and records that could help your defense. Contact an attorney experienced in defending complex financial and white-collar cases as soon as possible.

Even if charges are eventually dismissed, the public nature of an investigation can affect your future. Proper legal representation can help you manage both the criminal case and your reputation.

Embezzlement Charges and Legal Representation in California

If you are facing embezzlement charges in California, working with a law firm that understands both criminal defense and professional consequences is vital. At Bulldog Law, our experienced attorneys are committed to protecting your rights, your reputation, and your future. We offer strategic defense plans tailored to your specific situation and fight aggressively for the best possible outcome. Whether the case involves business disputes, financial records, or cryptocurrency, our team is ready to help. Contact Bulldog Law today to schedule a confidential consultation and start building your defense.