Embezzlement Charges in California (Penal Code § 503)

You don’t have to steal cash out of a safe to be charged with embezzlement in California. Under Penal Code § 503, even redirecting funds, misusing a company card, or borrowing without permission can be painted as a criminal act.

If someone claims you betrayed a position of trust—whether in a workplace, nonprofit, or family business—you could be facing felony charges, prison time, and a permanent hit to your reputation.

These cases often boil down to internal disputes, incomplete records, or personal grudges. Before you respond to an employer, investigator, or auditor, get legal protection in place. The way you handle this now can define your future.

What Constitutes 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.” The key distinction between embezzlement and theft is that embezzlement involves property that was lawfully given to you initially, while theft involves taking property without permission.

Key Elements of Embezzlement

For prosecutors to secure an embezzlement conviction, they must prove four essential elements beyond a reasonable doubt:

1. An owner entrusted their property to you
2. The owner did so because they trusted you
3. You fraudulently converted or used that property for your own benefit
4. You intended to deprive the owner of the property’s use

The Trust Relationship Requirement

A critical element in embezzlement cases is proving a relationship of trust between you and the property owner. This relationship can exist when:

• You are an employee with access to company funds or property
• Someone gives you temporary possession of their property (like a valet with a car)
• You are tasked with managing someone’s money or property
• You hold a fiduciary duty to another party

Simply being an employee isn’t enough – there must be concrete evidence that the owner placed special trust or confidence in you regarding the property.

Common Types of Embezzlement Cases

Embezzlement can take many forms in today’s workplace:

Employee Financial Crimes

• Taking cash from registers or company accounts
• Using company credit cards for personal expenses
• Manipulating payroll or expense accounts
• Stealing inventory or supplies

Professional Misconduct

• Attorneys misusing client trust funds
• Investment advisors taking client money
• Real estate agents mishandling escrow funds
• Insurance agents pocketing premiums

Corporate Embezzlement

• Executives using company funds for personal benefit
• Accountants manipulating financial records
• Managers authorizing fraudulent transactions
• Trustees misappropriating trust assets

Penalties for Embezzlement in California

Embezzlement penalties in California depend on the value and type of property involved:

Petty Theft Embezzlement

When the property value is $950 or less:

• Misdemeanor charges
• Up to 6 months in county jail
• Fines up to $1,000
• Summary probation

Grand Theft Embezzlement

When the property value exceeds $950, or involves automobiles or firearms:

• Misdemeanor: Up to 1 year in county jail
• Felony: 16 months, 2 years, or 3 years in state prison
• Fines up to $10,000
• Formal probation

Enhanced Penalties for Large Amounts

California imposes additional prison terms for embezzlement involving substantial amounts:

• $50,000 to $200,000: Additional 1 year
• $200,000 to $1,000,000: Additional 2 years
• $1,000,000 to $3,000,000: Additional 3 years
• Over $3,000,000: Additional 4 years (plus 1 year for each additional $3,000,000)

Additional Consequences

• Restitution to victims
• Loss of professional licenses
• Immigration consequences for non-citizens
• Difficulty finding employment
• Civil lawsuits from victims
• Damage to personal and professional reputation

Legal Defenses to Embezzlement Charges

Experienced criminal defense attorneys can employ several effective strategies to defend against embezzlement charges:

Good Faith Belief in Right to Property

If you genuinely believed you had a right to use the property, this can be a complete defense. This applies when:

• You reasonably believed you had authorization
• The property was part of agreed-upon compensation
• You were following established company practices
• You had permission that was later revoked

Lack of Fraudulent Intent

Embezzlement requires proof of fraudulent conversion. You may not be guilty if:

• You intended to return the property
• You were borrowing rather than stealing
• You made an honest mistake
• You were acting under duress or coercion

No Intent to Permanently Deprive

If you didn’t intend to permanently keep the property, the embezzlement charge may not hold. This defense applies when you:

• Planned to return the property
• Used property temporarily for legitimate purposes
• Made unauthorized use without intent to steal
• Were conducting authorized transactions

Insufficient Evidence of Trust Relationship

If prosecutors cannot prove a special relationship of trust existed, embezzlement charges may be reduced to simple theft or dismissed entirely.

Constitutional Violations

If law enforcement violated your rights during the investigation, key evidence might be suppressed:

• Statements obtained without Miranda warnings
• Evidence from illegal searches of your office or computer
• Coerced confessions or admissions
• Violations of attorney-client privilege

The Criminal Court Process for Embezzlement Cases

Embezzlement cases typically follow this progression:

1. Investigation: Often involves forensic accounting, computer analysis, and extensive document review.
2. Arrest and Charging: You may be arrested at work or after a lengthy investigation.
3. Arraignment: Your first court appearance where charges are formally presented.
4. Bail Hearing: The judge considers the seriousness of charges and your ties to the community.
5. Preliminary Hearing: The prosecution must demonstrate sufficient evidence to proceed.
6. Pretrial Motions: Your attorney will file motions to suppress evidence and challenge charges.
7. Discovery: Both sides exchange financial records, witness statements, and documentary evidence.
8. Plea Negotiations: Many embezzlement cases resolve through plea bargaining.
9. Trial: Embezzlement trials often involve financial testimony and expert witnesses.
10. Sentencing: If convicted, the judge determines penalties based on loss amount and other factors.

These cases can take 8-18 months to resolve, depending on the complexity of financial records involved.

What Most People Don’t Know About Embezzlement Cases

There are several important aspects of embezzlement cases that many people aren’t aware of:

• Civil and criminal cases are separate: You may face both criminal charges and civil lawsuits seeking monetary damages.
• Restitution is often required: Courts typically order repayment even with plea agreements or reduced charges.
• Intent is difficult to prove: Prosecutors must show your state of mind, which creates opportunities for defense.
• Good faith belief is a complete defense: Honest mistakes or reasonable beliefs about authorization can defeat charges.
• Professional licenses are at risk: Many licensing boards impose discipline even without criminal convictions.
• Early intervention matters: Addressing allegations quickly can sometimes prevent criminal charges from being filed.

Embezzlement vs. Other Theft Crimes

Understanding the distinctions between embezzlement and related offenses is important:

• Embezzlement involves property entrusted to you that you fraudulently convert.
• Larceny/Theft involves taking property that was never entrusted to you.
• Fraud involves obtaining property through deception or false representations.
• Forgery involves creating or altering documents to obtain property illegally.

The specific charge affects available defenses and potential penalties.

How The Nieves Law Firm Can Help

At The Nieves Law Firm, we understand that embezzlement allegations often involve hardworking professionals who made mistakes or found themselves in complicated financial situations. Our approach to defending these charges includes:

• Conducting thorough investigations of financial records and business practices
• Consulting with forensic accountants and financial professionals when needed
• Challenging the prosecution’s evidence regarding intent, authorization, and trust relationships
• Developing compelling defenses based on good faith belief and lack of criminal intent
• Negotiating with prosecutors for reduced charges or alternative sentencing
• Preparing comprehensive trial defenses when necessary

We recognize that our clients are often professionals with families and careers to protect. Our goal is to handle the legal work while minimizing the impact on your professional and personal life.

Many embezzlement cases involve business relationships and financial arrangements that can be misunderstood by law enforcement. We work to ensure that the full context of your situation is presented and that your rights are protected throughout the process.

Contact The Nieves Law Firm today for a confidential consultation.