Penal Code 424 addresses the misappropriation of public funds. The statute targets public officers and individuals entrusted with government money. The law's primary purpose is to prevent the unauthorized or improper use of public funds. This includes state and local public officials and individuals responsible for government funds. These officials include administrators, trustees, or employees handling public money.

The law's overarching goal is to ensure the proper utilization and management of public funds while holding those who misuse or embezzle these funds accountable for their actions. This criminal offense is a felony. It carries potential fines, imprisonment, and permanent disqualification from holding public office. To combat such charges effectively, it becomes imperative to secure legal representation. Contact the California Criminal Lawyer Group if you face charges for misappropriating public funds in Bakersfield.

Misappropriation of Public Funds as Addressed Under PC 424

PC 424 outlines several actions it categorizes as misappropriation of funds. Let us look at each as we break down the statute for clarity.

  1. Appropriating Funds Without Authorization

Misappropriation of public funds can occur when individuals appropriate money for their personal benefit or another's without lawful authority. For this offense, the prosecution must substantiate the following points:

  • You either occupied an official role within a state or local government entity or were entrusted with safeguarding, receiving, disbursing, or transferring public funds.
  • You wrongfully diverted public funds, using them for personal gain or on behalf of someone else, despite lacking the appropriate legal authorization.
  • You were aware of the law prohibiting misappropriation, or you demonstrated criminal negligence by failing to ascertain whether you possessed the necessary legal authority for the appropriation.

An Individual or Public Officer Entrusted With Public Funds

A person entrusted with public funds, whether an individual or a public officer, assumes a position of authority and responsibility within a government entity or public agency. Their primary role involves the management, safeguarding, transfer, or disbursement of funds belonging to the government or the public.

Some of the individuals who hold these positions of trust include the following:

  • Government officials — These are individuals elected into office, like mayors, governors, legislators, and council members. They shoulder the task of overseeing government budgets and making allocations.
  • Public administrators — Public administrators are individuals holding administrative positions within government offices. The list includes city managers, department heads, or financial officers. These individuals are tasked with managing and supervising public funds.
  • Financial officers — These officers are employees working in finance departments. They include accountants and treasurers engaged in the intricate process of receiving and disbursing public funds.
  • Trustees or board members — These are individuals appointed or elected and tasked to manage public agencies, institutions, or trusts. They bear the weight of handling the funds associated with these entities.
  • Public employees — Those who serve the government, like civil servants or workers involved in specific programs, are entrusted with funds earmarked for dedicated projects or services.

Appropriated Money

Public funds are appropriated by using them for personal benefit or the advantage of another person without proper authorization or lawful justification. This entails diverting funds for public use or specifically authorized purposes and redirecting them towards personal gain or benefiting friends or family members. This conduct is unlawful and constitutes the offense of misappropriation of public funds, carrying severe consequences of criminal charges and penalties.

Acting Knowingly or WIth Criminal Negligence

Deliberate action and criminal negligence are pivotal. Prosecutors must prove the following to establish that you acted knowingly and with criminal negligence.

  • You knew that appropriating the funds in the manner you did violated the law. They knew that your actions breached a non-criminal law that expressly prohibited such conduct.
  • You displayed criminal negligence, that is, negligence that exceeds ordinary negligence. Criminal negligence entails an intensified, gross, or reckless failure to exercise reasonable care. It signifies a profound level of carelessness or recklessness, demonstrating a complete disregard for the legal repercussions of their actions.

Note: Being aware of the unlawfulness of the conduct does not imply an individual comprehends all the intricate details of the law. Instead, it merely necessitates their understanding that their behavior was proscribed under a non-criminal law.

  1. Profiting, Loaning From, or Misusing Public Finances Without Authority

The second significant way to misappropriate public funds involves engaging in unauthorized lending. A violation of this aspect of PC 424 occurs under the following circumstances:

  • You occupied a position of responsibility either as an officer of a local or state government entity or as an individual entrusted with receiving, transferring, safeguarding, or disbursing public funds.
  • A non-penal law established the legal framework by either authorizing or prohibiting the loaning or use of public money under certain circumstances. This law defined the precise boundaries and limitations concerning public funds' utilization.
  • Despite the legal restrictions, you took one of the following actions:
    1. Making a profit from public money.
    2. Loaning public money, or
    3. Using it for purposes not authorized by the law.

Furthermore, your mental state is of utmost importance. Prosecutors must prove that you possessed knowledge that your actions were unlawful or you demonstrated criminal negligence by neglecting to ascertain whether your conduct adhered to the law.

  1. Destroying, Fraudulently Altering, or Falsifying Accounts

Misappropriation of public funds can also occur through falsifying accounts or fraudulently altering or destroying accounts linked to public funds. These actions are intertwined with deceptive and unlawful practices concerning the administration and documentation of government funds.

False Accounts

Misappropriation arises when individuals knowingly keep accounts containing material falsehoods or deliberately insert false entries or erasures in any account connected to public money. This involves a purposeful effort to create or maintain inaccurate financial records, thus misrepresenting the genuine status of public funds.

Fraudulently Altering or Destroying Accounts

Another way misappropriation occurs is when individuals manipulate, counterfeit, conceal, demolish, or obliterate accounts associated with public money with the intent to deceive and perpetrate fraud. This entails tampering with financial records or willfully causing their destruction to mislead others and cover up illicit activities involving public funds.

You do not need to misappropriate funds to violate the misappropriation of funds law personally. Guilt can be established if you knowingly tamper with accounts tied to public money or partake in actions intended to alter or destroy those accounts to commit fraud.

  1. Failing to Pay Public Funds

You can also violate PC 424 by engaging in the following activities:

  • Willfully refusing or omitting to pay or transfer public funds under your control when presented with a draft, order, or warrant drawn upon those funds by a competent authority, as required by law.
  • Willfully omitting or refusing to pay funds you received to any officer or person authorized by law to receive it.

Like other forms of misappropriation of public funds, guilt in this offense hinges on whether you possessed knowledge of your legal obligation to pay the money or displayed criminal negligence in failing to ascertain your legal requirement to do so.

This aspect of misappropriation addresses deliberate non-compliance or omissions concerning the payment or transfer of public money when legally obligated.

Exceptions to Small or Incidental Amounts

California's misappropriation of funds law includes a provision that accounts for misusing "incidental and minimal" amounts of money. As a result, individuals involved in activities concerning relatively small sums of money are exempt from guilt under this particular law.

Not every case of improper use or mishandling of funds should be subject to identical scrutiny or legal penalties. The term "incidental and minimal" pertains to situations where the monetary value at stake is deemed inconsequential.

Defenses You Can Raise in Misappropriation of Funds Case

The misappropriation of public funds has extensive ramifications, given its involvement in the mismanagement and mishandling of government resources. This can profoundly affect public trust and the effective functioning of government institutions. Nevertheless, when individuals confront misappropriation charges, several defense strategies can be used to contest the accusations and pursue a favorable resolution. Below are some of the common defenses:

  1. You Did Not Act With Criminal Negligence or Knowingly

You must demonstrate either a lack of awareness of the illegality of your actions or the absence of criminal negligence in failing to ascertain the legality of your conduct while asserting this defense.

Criminal negligence involves a higher level of culpability compared to ordinary negligence. It requires that you act with reckless disregard for the potential consequences of your actions. In simpler terms, you must have been aware of the significant risk posed by your actions yet proceeded without due regard for the potential harm.

Your defense attorney will employ several strategies to demonstrate that you did not act knowingly or with criminal negligence. These include proving:

  • A lack of knowledge — This strategy requires presenting evidence to indicate that you had no awareness of the illegality of your actions. This could entail offering testimony or documentation demonstrating your lack of familiarity with the relevant laws or regulations about using public funds.
  • Absence of reason to believe illegality — Alternatively, your attorney could provide evidence to show that you had no grounds to believe that your actions were illegal. This evidence could involve presenting any legal advice or guidance you sought or received. This will support your belief that your conduct was lawful.
  • Reasonable steps taken — You could offer evidence showcasing the appropriate measures taken to ensure the legality of your actions. This could include providing documents, records, or witness testimony illustrating the efforts to comply with the law.
  • Expert testimony — In certain instances, defense attorneys could introduce expert testimony from financial or legal professionals to elucidate intricate financial transactions. Additionally, experts can demonstrate your reasonable behavior in light of their level of expertise or knowledge.
  • Witnesses — Witnesses who can attest to your actions, intentions, and state of mind, along with relevant documents, emails, or communications, could bolster the defense's arguments. Furthermore, your attorneys can present character witnesses who vouch for your honesty, integrity, and reputation. This testimony could carry weight in favor of your lack of criminal intent or negligence.

  1. The Sum of Money is Negligible or Incidental

You can argue that the sums in the case are relatively small and insignificant. This defense relies on the exemption provision for incidental or minimal amounts. It contends that the misappropriated funds do not warrant the same level of scrutiny or legal consequences as more substantial financial misuses.

This defense requires you to provide evidence demonstrating the inconsequential or minor nature of the amounts involved in the alleged misappropriation within the broader context of the financial transactions. Such evidence could include:

  • Presenting financial records and documentation illustrating the specific amounts under scrutiny and their relative significance compared to the total funds managed or handled.
  • Introducing expert testimony from financial professionals or auditors who can assess the impact of the misappropriated amounts on the overall financial standing.
  • Citing relevant legal precedents or cases where the courts considered similar amounts as incidental and minimal, resulting in less severe legal penalties.
  • Articulating a reasoned and persuasive argument to support the claim that the amounts in question are trivial and do not justify a criminal prosecution.

You should consult our attorneys to determine if the sums in your case warrant using this defense.

  1. You are a Victim of Police Entrapment

Entrapment, as a legal defense, can be raised in cases where an individual faces criminal charges, including misappropriation of public funds. This defense comes into play when law enforcement officers use inducement or persuasion to entice someone into committing a crime they would not have otherwise committed. Proving entrapment, however, can be a complex task.

Entrapment could come into question if law enforcement officers or agents employ coercion, pressure, or deceit to lure an individual into misusing public funds or engaging in illegal financial activities. To successfully employ entrapment as a defense, you typically need to establish the following issues:

  • You must demonstrate that law enforcement officers or agents actively induced, encouraged, or persuaded you to commit the crime. This could entail presenting evidence to show that the idea to commit the crime originated from the authorities rather than from the defendant.
  • Your attorneys must establish that you had no predisposition or willingness to commit the offense. In other words, they must show that you were not already inclined to misappropriate the funds.
  • You need to provide objective evidence to substantiate your claim of entrapment. This evidence includes recorded conversations, witness statements, or other documentation that reveals the role of the government in encouraging you to commit the crime.

Merely providing an opportunity or creating a scenario where the crime could be committed does not necessarily amount to entrapment. You must demonstrate that the government's actions went beyond affording an opportunity and instead actively induced you to misappropriate public funds.

Successfully establishing entrapment as a defense can lead to the dismissal of charges or a verdict of not guilty. However, the burden of proof rests on you to demonstrate that entrapment occurred.

  1. You Were Acting Under Duress

The acting under duress defense hinges on situations where individuals are forced to commit a crime due to threats of harm or coercion. If you misappropriated public funds under duress, you could argue that you had no alternative but to engage in the illegal conduct to safeguard yourself or others from imminent harm.

You can effectively assert duress by demonstrating the following issues:

  • You must establish that you faced a credible threat of severe harm or injury to yourself or others if you did not misappropriate the funds.
  • The threat must have been immediate and unavoidable, leaving you with no reasonable means to escape or seek assistance.
  • You must prove that misappropriating public funds was a proportional reaction to the threat you encountered. In other words, the harm you sought to evade must have been more severe than the potential consequences of the illegal conduct.
  • You must demonstrate that you had no reasonable alternative course of action to avoid the threatened harm other than committing the crime.

Note: This defense is not applicable in all scenarios. Courts do not accept this defense in all cases. However, if you successfully establish this defense, it could lead to a reduction in charges, an acquittal, or a more lenient sentence. However, the burden of proof rests with you, who must provide sufficient evidence to support your claim.

  1. You Were Mistakenly Identified as the Culprit

You can also challenge the PC 424 violation charges by asserting the mistaken identity defense. Under this defense strategy, you will argue that you were wrongfully identified as the perpetrator of the crime. By employing this defense, you aim to demonstrate that they are not the actual person responsible for the misappropriation.

This defense requires you to prove the following:

  • Alibi — You must provide evidence supporting an alibi, like witness statements, documents, or surveillance footage. This evidence shows that you were not present at the location where the misappropriation occurred during the relevant time of the incident.
  • Lack of physical evidence — Your attorney could argue that the state lacks forensic or physical evidence that links you to the crime scene or the misappropriated funds. This move casts doubt on your involvement.
  • Inconsistent descriptions — If there were witnesses who observed you, our team will point out inconsistencies in their narratives, raising questions about the accuracy of the identification.
  • Alternate suspects — Attorneys could present evidence suggesting the potential involvement of other individuals who could have had motives or opportunities to commit the misappropriation.

Penalties Under Penal Code 424

A violation of Penal Code 424 is a felony. A conviction results in the following penalties:

  • 2, 3, or 4 years in prison.
  • A maximum fine of $10,000.
  • Formal or felony probation as an alternative to imprisonment.

Offenses Related to Misappropriation of Funds

  1. Embezzlement

Embezzlement under Penal Code 503, pertains to the fraudulent appropriation of property entrusted to the defendant that belongs to someone else. The act involves individuals with lawful possession of the property but subsequently convert it fraudulently for their benefit or that of another party. The crime is a form of theft, with the property involved including money, assets, goods, services, or valuable items.

Prosecutors must prove specific elements for the jury to return a guilty verdict. They must establish that:

  • You acquired lawful control or possession of the property through an entrustment, employment, or fiduciary relationship.
  • You fraudulently transformed the entrusted property for your personal use or the benefit of others, contrary to the owner's trust or intentions.
  • Your actions demonstrate a willful intent to permanently deprive the property owner.

The severity of embezzlement charges can vary, contingent upon factors like the property's value and other circumstances.

Penalties for Violating PC 503 

Embezzlement is prosecuted as grand theft (Penal Code 487 PC) or petty theft (Penal Code 488 PC), depending on the property's specific characteristics and value.

When the embezzled property exceeds $950 in value, involves an automobile, or includes a firearm, the offense is classified as grand theft. The classification as grand theft makes the offense a wobbler. Therefore, prosecutors can charge it as either a misdemeanor or a felony. If treated as a misdemeanor, the convicted person could face a sentence of up to one year in the county jail. However, if the offense is charged as a felony, the maximum possible penalty is three years of incarceration.

On the other hand, if the embezzled property's value is $950 or less, the crime is designated as petty theft. Petty theft is a misdemeanor offense. If found guilty, you could be sentenced to up to six months in the county jail.

It is important to recognize the distinction between grand theft and petty theft in embezzlement cases because it substantially impacts the severity of the potential consequences. The specific value and type of the embezzled property play a pivotal role in determining whether the accused may face a misdemeanor or felony charge, which significantly affects the penalties that the courts could impose.

Engage a Criminal Defense Attorney Near Me

At the California Criminal Lawyer Group, we offer effective representation. Our Bakersfield team of highly experienced attorneys thoroughly understands California's criminal laws. It boasts a proven track record of successfully defending clients in diverse cases.

Drawing on our attorneys' extensive knowledge and expertise in criminal defense law, we will diligently advocate for your rights and pursue your best interests. You can rely on us to work tirelessly in your defense.

If you require assistance or legal counsel for your misappropriation of public funds case, do not hesitate to contact our law firm. We are ready to offer you guidance and support in this challenging time. Call us now at 661-750-8230 to speak with one of our dedicated attorneys.