Charged with Embezzlement (Penal Code § 503) in California?

Embezzlement charges under California Penal Code § 503 are more than just allegations of theft—they’re accusations of a serious breach of trust.

Whether the claim involves misappropriating company funds, manipulating financial records, or abusing access to someone else’s property, the consequences can be severe: felony convictions, prison time, and long-term damage to your professional reputation. In San Diego, prosecutors take these cases seriously, and so should you.

What is Embezzlement Under California Law?

California Penal Code § 503 defines embezzlement as “the fraudulent appropriation of property by a person to whom it has been entrusted.” In simpler terms, embezzlement occurs when you lawfully possess someone else’s property but then convert it to your own use without permission.

The key distinction between embezzlement and other theft crimes is that with embezzlement, you initially had legitimate possession of the property. It’s not about wrongfully taking property (like shoplifting or burglary), but rather wrongfully keeping or using property that was already legally in your possession.

Real-World Examples of Embezzlement

To understand embezzlement better, consider these common examples:

• A cashier at a retail store who pockets cash from the register instead of depositing it in the till
• An accountant who transfers company funds to their personal account
• A treasurer of a club or organization who uses the group’s money for personal expenses
• An employee who “borrows” company equipment for personal use with no intention of returning it
• A neighbor who borrows your car to “run to the store” but instead drives it to another state and sells it

In each case, the person had lawful possession initially but then wrongfully converted the property for their own benefit.

Elements of Embezzlement the Prosecutor Must Prove

For a conviction under Penal Code § 503, the prosecution must prove four specific elements beyond a reasonable doubt:

1. An owner entrusted their property to you: Someone gave you possession of their property (money, vehicle, equipment, etc.)
2. The owner did so because they trusted you: There was a relationship of trust—such as employer-employee, client-professional, or even a neighborly arrangement
3. You fraudulently converted or used that property for your own benefit: You took undue advantage or caused a loss by breaching a duty or trust
4. You intended to deprive the owner of its use: You meant to keep the property from its rightful owner, even temporarily

If the prosecution cannot prove all four of these elements, you cannot legally be convicted of embezzlement.

Is Embezzlement a Misdemeanor or Felony in California?

Embezzlement charges in California can be either misdemeanors or felonies, depending primarily on the value of the property involved:

Petty Theft Embezzlement (Property Worth $950 or Less)

If the value of the embezzled property is $950 or less, the offense is charged as petty theft embezzlement—a misdemeanor punishable by:

• Up to 6 months in county jail
• A fine of up to $1,000
• Possible probation

Grand Theft Embezzlement (Property Worth More Than $950)

If the value exceeds $950, or if the property is a firearm or automobile (regardless of value), the offense is charged as grand theft embezzlement. This is a “wobbler” that can be charged as either:

• A misdemeanor: Up to 1 year in county jail
• A felony: 16 months, 2 years, or 3 years in jail

For larger embezzlement cases, penalties increase based on the value of the property:

Value of Property Embezzled	Additional Prison Term in Felony Cases
More than $50,000 to $200,000	Additional 1 year
More than $200,000 to $1,000,000	Additional 2 years
More than $1,000,000 to $3,000,000	Additional 3 years
More than $3,000,000	Additional 4 years (plus 1 year for each additional $3,000,000)

The Hidden Consequences of an Embezzlement Conviction

Beyond jail time and fines, an embezzlement conviction carries serious collateral consequences that can affect you for years to come:

Employment Challenges

Perhaps the most damaging long-term consequence is the impact on your employment prospects. Most employers are extremely reluctant to hire someone with an embezzlement conviction, as these charges directly relate to trustworthiness and integrity.

Since embezzlement involves a breach of trust, potential employers may be concerned about placing you in any position involving:

• Access to company funds or financial information
• Handling cash or processing payments
• Managing company property or resources
• Positions requiring bonding (as many bonding companies exclude people with theft convictions)

Professional Licensing Issues

If you work in a field requiring professional licensing (such as law, medicine, nursing, real estate, accounting, or insurance), an embezzlement conviction could lead to:

• License suspension or revocation
• Denial of license applications
• Mandatory reporting to licensing boards
• Disciplinary proceedings

Financial and Personal Consequences

Additional repercussions may include:

• Difficulty securing loans or credit
• Challenges renting apartments or homes
• Restitution payments to victims
• Strained personal relationships
• Damage to your reputation in the community

Powerful Defense Strategies for Embezzlement Charges

Despite the serious nature of embezzlement charges, several effective defense strategies may be available:

1. Good Faith Belief in Right to the Property

One of the strongest defenses is showing that you genuinely believed you had a right to use or take the property. This could be based on:

• A misunderstanding about ownership
• A belief that you had authorization
• Confusion about company policies
• Prior practices that seemed to permit similar actions

As long as your belief was reasonable and in good faith, this defense can be effective even if you were mistaken.

2. Lack of Fraudulent Intent

Embezzlement requires proof that you intended to deprive the owner of their property. Defense strategies centered on intent might include:

• Showing you intended to return the property
• Demonstrating that you believed you were following proper procedures
• Proving that any misappropriation was accidental or due to miscommunication
• Establishing that you were following instructions you reasonably believed were legitimate

3. Insufficient Evidence

The prosecution must prove all four elements of embezzlement beyond a reasonable doubt. We carefully scrutinize the evidence to identify weaknesses in their case, such as:

• Lack of documentation proving you received the property
• Insufficient evidence of your intent
• Missing financial records
• Inconsistent witness statements
• Alternative explanations for missing funds or property

4. False Accusations

We’ve seen many cases where innocent people are wrongly accused of embezzlement. This often happens in workplace settings where:

• Multiple employees have access to the same funds or property
• Accounting errors create the appearance of missing funds
• Personal conflicts lead to false allegations
• Poor record-keeping creates confusion about property status

5. Negotiating for Reduced Charges or Dismissal

Even in cases with strong evidence against you, skilled negotiation can often lead to favorable outcomes, such as:

• Charge reduction to a less serious offense
• Diversion programs that allow for eventual dismissal
• Civil compromise where charges are dropped in exchange for restitution
• Probation instead of jail time

Why You Need an Experienced Embezzlement Defense Attorney

Embezzlement cases are often complex, involving detailed financial records, witness testimony, and intricate legal requirements. Having a knowledgeable defense team is crucial for several reasons:

Financial Investigation

Embezzlement cases frequently involve complex financial transactions and accounting practices. An experienced defense attorney will work with forensic accountants and financial experts to:

• Analyze financial records
• Identify alternative explanations for discrepancies
• Challenge the prosecution’s calculations of alleged losses
• Develop a clear financial timeline

Understanding of Trust Relationships

The concept of a “relationship of trust” is central to embezzlement cases, but can be subjective. A skilled attorney knows how to challenge whether a true relationship of trust existed in your specific situation.

Negotiation Skills for Restitution Agreements

In many embezzlement cases, paying restitution can lead to reduced charges or even dismissal. An experienced attorney can negotiate agreements that:

• Allow for reasonable payment plans
• Potentially reduce the total amount owed
• Secure favorable terms in exchange for restitution
• Lead to charge dismissals upon completion of payments

How David P. Shapiro Criminal Defense Attorneys Can Help

When facing embezzlement charges, the stakes couldn’t be higher. Our defense team offers:

• Thorough case evaluation: We meticulously review all evidence, including financial records, witness statements, and company policies, to identify weaknesses in the prosecution’s case
• Strategic defense planning: We develop customized defense strategies based on the specific circumstances of your case
• Expert consultation: We work with financial experts and forensic accountants to challenge the prosecution’s evidence
• Negotiation expertise: We leverage our experience and relationships to negotiate for charge reductions, dismissals, or favorable restitution agreements
• Compassionate support: We understand the stress and stigma associated with embezzlement accusations and provide guidance throughout the process

Our approach has helped many clients facing embezzlement charges achieve outcomes far better than initially seemed possible.

Next Steps If You’re Facing Embezzlement Charges

If you’ve been arrested or are under investigation for embezzlement:

1. Exercise your right to remain silent – Don’t make statements to police or employers without an attorney present
2. Preserve documentation – Secure any financial records, emails, or other documents that might support your defense
3. Don’t contact alleged victims – Attempting to explain or resolve the situation directly could make matters worse
4. Avoid discussing your case – Don’t talk about the allegations with coworkers, friends, or on social media
5. Contact an experienced defense attorney – The earlier legal representation begins, the more options may be available

Your Future Is Worth Fighting For

If you or someone you love is facing criminal charges in California, swift action is imperative. The penalties can be life-altering and long-lasting. Give us a call today to set up a case evaluation with one of our attorneys and learn how to best protect your freedom and future.

Too often, we see clients who “wait and see,” unsure of the legal landscape ahead, only for charges to escalate. They then find themselves backpedaling into a bad defense and an even worse lawyer. Don’t let that happen to you. Protect your freedom. Protect your future. Know your rights.

The contents of this article and blog are meant for informational and marketing purposes only and do not constitute legal advice. Viewing and/or use of the blog does not form an attorney-client relationship. No statements in this post are a guarantee, warranty, or prediction of a particular result in your case.