Embezzlement

Embezzlement in California is defined under Penal Code 503 and 504 as the fraudulent appropriation of property by someone to whom it has been entrusted. Unlike theft or burglary, embezzlement involves a relationship of trust—you had lawful possession of the money or property, but prosecutors allege you converted it to your own use without authorization. This can include employees taking company funds, financial advisors misusing client accounts, bookkeepers diverting payments, or business partners allegedly misappropriating partnership assets. The key legal distinction is that the property was entrusted to you legitimately before the alleged misappropriation occurred.

These charges are prosecuted aggressively because they involve breaches of trust in professional or employment relationships. District attorneys view embezzlement as a betrayal that undermines business relationships and damages California’s economic interests. Prosecutors often pursue these cases based on civil disputes between employers and employees, business partners in conflict, or accountants accused during financial audits. The political pressure to appear tough on white-collar crime means even first-time offenders with no criminal history can face felony charges, substantial restitution demands, and potential prison time based on the dollar amount allegedly embezzled.

Common circumstances leading to embezzlement charges include accounting discrepancies discovered during audits where employees are blamed for systemic problems, authorized transactions that employers later claim were unauthorized, business disputes where one partner accuses another of misappropriating funds, commingling of personal and business funds that looks suspicious but wasn’t criminal, bookkeeping errors or poor record-keeping that prosecutors characterize as intentional theft, and civil disputes that escalate into criminal investigations when employers file police reports. We’ve represented clients who had authorization to make certain transactions but couldn’t prove it, clients accused of taking money they were legitimately owed, and clients caught in business disputes where criminal charges were filed as leverage in civil litigation.

Types of Embezzlement Charges We Defend

We handle all embezzlement charges in San Luis Obispo, Santa Maria, and Lompoc:

Common Embezzlement Offenses

• Embezzlement (PC 503/504) – The fraudulent appropriation of property entrusted to you, charged as petty theft (under $950) as a misdemeanor or grand theft (over $950) as a misdemeanor or felony depending on the amount.
• Employee Embezzlement – Taking or misusing employer funds, inventory, or property that was entrusted to you in your employment capacity, commonly charged when bookkeepers, managers, or financial employees are accused of diverting company funds.
• Embezzlement by a Public Officer (PC 424) – Public officials or government employees who allegedly misappropriate public funds entrusted to them, carrying enhanced penalties due to the breach of public trust.
• Embezzlement by a Fiduciary – Trustees, executors, guardians, or conservators who allegedly misuse funds they were entrusted to manage for beneficiaries, often arising in probate or trust disputes.

Serious Embezzlement Felonies

• Grand Theft Embezzlement (PC 487) – Embezzlement of property worth over $950, charged as a wobbler (misdemeanor or felony) with potential state prison time of 16 months to 3 years if charged as felony.
• Aggravated Embezzlement – Taking more than $65,000 in a 12-month period from a single victim, or more than $200,000 in aggregate, results in sentence enhancements adding 1-4 additional years in prison.
• Embezzlement by Broker, Banker, or Agent (PC 506) – Financial professionals, insurance agents, real estate brokers, or bankers who misappropriate client funds they were entrusted to handle, carrying specific professional consequences.
• Elder Financial Abuse (PC 368) – Embezzling or misappropriating funds from someone 65 or older, carrying enhanced penalties including additional prison time and mandatory restitution.

Related Embezzlement Charges Often Filed Together

• Forgery (PC 470) – Creating, altering, or using false documents to facilitate embezzlement, such as forging checks, invoices, or financial records, adding 16 months to 3 years if charged as felony.
• Falsifying Records (PC 471.5) – Altering or falsifying business records, books, or accounts to conceal embezzlement or misappropriation, commonly charged when financial records don’t match actual transactions.
• Identity Theft (PC 530.5) – Using another person’s identifying information without permission to facilitate embezzlement, such as using a company credit card or account without authorization, carrying 16 months to 3 years if felony.
• Money Laundering (PC 186.10) – Conducting financial transactions designed to conceal the source or ownership of embezzled funds, often charged in larger embezzlement cases involving multiple accounts or transactions.

Additional Embezzlement Offenses

• Misappropriation of Corporate Property – Officers, directors, or executives accused of using corporate assets for personal benefit without board approval or shareholder authorization.
• Payroll Fraud – Creating phantom employees, falsifying hours, or diverting payroll funds, often discovered during payroll audits or tax investigations.
• Theft by False Pretenses (PC 532) – Obtaining property through intentional misrepresentation or fraud, often charged alongside embezzlement when the taking involves deceptive statements about intent or use of funds.
• Commercial Burglary (PC 459) – Sometimes charged alongside embezzlement when prosecutors allege you entered the business with intent to commit theft, even if you had authorization to be there.

This list represents the most common embezzlement charges we defend, but we handle all criminal charges in this category. If you’re facing charges not listed here, or you’re unsure exactly what you’ve been charged with, we can help. Criminal charging documents can be confusing, and understanding what you’re actually facing is the first step in building your defense.

Penalties for Embezzlement Convictions

Embezzlement convictions can result in:

• Jail or prison time – Petty theft embezzlement (under $950): up to 6 months in county jail; Grand theft embezzlement (over $950): up to 1 year jail if misdemeanor, 16 months to 3 years in prison if felony; Aggravated amounts add 1-4 additional years
• Substantial restitution – Court-ordered repayment of the full amount allegedly embezzled, plus interest, which can total tens or hundreds of thousands of dollars and remains enforceable even after completing the criminal sentence
• Fines – Up to $1,000 for misdemeanors, up to $10,000 for felonies, plus penalty assessments that can double or triple the actual fine amount
• Formal probation – Typically 3-5 years with strict conditions including monthly reporting to a probation officer, warrantless searches, employment requirements, and prohibition on handling financial accounts or money in employment
• Professional license consequences – CPAs, attorneys, financial advisors, real estate brokers, insurance agents, and other licensed professionals face automatic reporting requirements and potential license suspension or revocation from professional licensing boards
• Immigration consequences – Embezzlement is considered a crime of moral turpitude, which can result in deportation for non-citizens, denial of naturalization, and inadmissibility if traveling outside the United States
• Loss of employment and career damage – Conviction for embezzlement makes employment in finance, accounting, banking, retail management, or any position handling money nearly impossible due to background checks and bonding requirements
• Civil liability – Employers can pursue civil lawsuits for treble damages (triple the actual loss), attorney’s fees, and punitive damages, resulting in financial liability far exceeding the criminal restitution
• Bonding and insurance issues – Inability to obtain fidelity bonds or employment insurance required for many financial positions, effectively ending careers in banking, accounting, and financial services
• Tax consequences – The IRS may treat embezzled funds as taxable income, resulting in additional tax liability, penalties, and interest on top of criminal restitution
• Permanent criminal record affecting employment, housing, professional licenses, security clearances, and your reputation in the business community

Why You Need an Attorney for Embezzlement Charges

The Stakes Are Higher for Professionals

Embezzlement charges threaten more than your freedom—they threaten your career, your professional license, and your reputation in the business community. Many embezzlement defendants are educated professionals with families, mortgages, and careers they’ve spent decades building. A conviction doesn’t just mean potential jail time; it means the end of your ability to work in your field. Professional licensing boards don’t wait for your criminal case to resolve—they begin their own investigations immediately. Having an attorney who understands both the criminal and professional consequences can protect what you’ve worked your entire life to build.

These Cases Involve Complex Financial Evidence

Embezzlement prosecutions rely on financial records, accounting analysis, and expert testimony that most people don’t understand. Prosecutors hire forensic accountants to trace transactions, analyze bank records, and create timelines of alleged misappropriation. They present spreadsheets, account statements, and financial summaries that make circumstantial evidence look compelling. Without someone who understands financial documentation, accounting practices, and how to challenge forensic analysis, you’re at a significant disadvantage. We work with defense experts when necessary, challenge the prosecution’s accounting methods, and identify alternative explanations for transactions that prosecutors characterize as criminal.

Intent and Authorization Are Often Disputed

The key element in embezzlement cases is fraudulent intent—prosecutors must prove you intended to permanently deprive the owner of property, not just borrow it or use it with implied authorization. Many embezzlement cases arise from civil disputes where authorization was verbal, implied, or misunderstood. Business owners claim transactions were unauthorized when records show a pattern of similar transactions that were never questioned. Employees are accused of theft when they were following instructions from supervisors who later deny giving authorization. Proving what you believed and what authorization existed requires careful investigation of employment practices, business customs, and witness interviews that prosecutors often skip.

Experience Matters

We’ve defended embezzlement cases in San Luis Obispo, Santa Maria, and Lompoc courts for over 15 years. We know which judges understand complex financial evidence and which need simplified presentations. We know which prosecutors are willing to resolve cases civilly when restitution is made, and which ones pursue criminal convictions regardless. We understand how local businesses operate, what employment practices are common in the Central Coast, and how to present defenses that resonate with local juries. That experience informs every decision—from initial negotiations to trial strategy to sentencing advocacy.

How Central Coast Criminal Defense Can Help

Helping clients in San Luis Obispo, Santa Maria, and Lompoc defend against embezzlement charges since 2010, we provide:

• Thorough Case Investigation – We review all financial records, bank statements, and accounting documents to identify errors in the prosecution’s analysis, interview witnesses who can verify authorization or business practices, retain forensic accountants when necessary to challenge the prosecution’s financial experts, and investigate the context and circumstances surrounding the alleged transactions.
• Strategic Defense Development – We challenge the prosecution’s claims of fraudulent intent by demonstrating authorization, implied consent, or good-faith belief you were entitled to the property, present evidence of poor record-keeping, systemic accounting problems, or business practices that explain the transactions, and identify civil remedies that can resolve the matter without criminal prosecution when appropriate.
• Skilled Negotiation – We work with prosecutors to present mitigating circumstances including clean criminal history, professional reputation, and family circumstances, negotiate restitution agreements that can result in reduced charges or case dismissal, explore civil compromise options where restitution resolves the case without prosecution, and advocate for misdemeanor resolutions when felony charges are filed on amounts close to thresholds.
• Trial-Ready Advocacy – We prepare comprehensive defenses for trial when necessary, including expert witnesses who can challenge the prosecution’s financial analysis, cross-examine forensic accountants on their methods and assumptions, and present alternative explanations for transactions that don’t involve criminal intent.
• Personal Attention – You work directly with experienced attorneys who understand white-collar criminal defense, the professional consequences of conviction, and the importance of discretion in cases involving business and financial matters.

We understand that embezzlement cases often involve professionals who have never been in trouble with the law, business disputes that escalated into criminal investigations, employees accused during contentious terminations, or situations where authorization existed but can’t be easily documented. We’ve represented accountants, bookkeepers, financial advisors, business owners, nonprofit employees, and executives who were accused based on misunderstandings, poor documentation, or civil disputes that should never have become criminal cases.

Our approach focuses on understanding the full context of the alleged embezzlement. What was the business relationship? What authorization existed, even if not in writing? Were there business practices or customs that explain the transactions? Was there an accounting error or systemic problem that you’re being blamed for? We examine the financial evidence carefully, investigate the accuser’s motives and credibility, and look for civil resolutions when appropriate. Many embezzlement cases can be resolved through restitution and civil compromise without criminal prosecution.

Embezzlement charges can be defended, and careers can be protected. Between challenging the financial evidence, proving authorization or good-faith belief, negotiating restitution agreements, and presenting alternative explanations at trial, there are paths to favorable outcomes. We’ve helped professionals avoid convictions, minimize consequences, and protect their ability to continue working in their fields. Whether you’re facing accusations from an employer, a business partner, or a client, we’re here to provide the representation that understands both the criminal charges and the professional stakes.

Don’t Wait—Call Us Today

Embezzlement charges require immediate attention, particularly because professional licensing boards may already be investigating, and early restitution can sometimes prevent prosecution altogether. Understanding your options and addressing both the criminal and professional aspects of the case is critical.

Call Central Coast Criminal Defense at (805) 621-7181 for a free, confidential consultation. We’ll review the allegations, explain the potential outcomes, discuss the professional consequences you’re facing, and develop a strategy to protect your freedom, your career, and your reputation.

Your career, your reputation, your future—let’s protect what matters.