Misappropriation of Public Funds - California Penal Code Section 424
The misappropriation of public funds law is covered under California Penal Code Section 424, and typically considered a white collar crime. In basic language, this law criminalizes the acts of using public funds for an unrelated public benefit or personal use. It’s commonly known as misuse of public funds. In Los Angeles County, misappropriation of public funds is typically charged against local or California state public officials who are responsible for the funds, but these charges can also be filed any person who has care and control over government money. A recent example in California includes the situation where five officials were charged with misusing public funds by burying hazardous waste at Central Valley water district. After the drums of hazardous waste were discovered, a state audit revealed that officials running the water district misused more than $100,000 in public funds on a variety of personal items and expenses, including slot machines, concert tickets, home improvements and upgrades to his vehicle. One of the officials is facing eight felony charges, including six counts of embezzlement and misappropriation of public funds. Misappropriation of public funds is always charged as a felony crime that can’t be reduced to a misdemeanor. If you are convicted of violation of California Penal Code Section 424, you could face up to 4 years in state prison and a fine up to $10,000. Additionally, as you can see from the recent example above, it’s not uncommon for individuals who have been charged with misappropriation of public funds to also face similar criminal charges of embezzlement, grand theft, or even money laundering. If you are currently under criminal investigation, or already charged with misappropriation of public funds, you need to consult with a Los Angeles criminal defense lawyer at Eisner Gorin immediately. If you are contacted by law enforcement, you should politely decline to answer their questions without first speaking with a lawyer. Let’s review the legal definitions, penalties, and legal defense below.
Legal Definition of Misappropriation of Public Funds
Under California Penal Code Section 424, the legal definition of misappropriation of public funds is as follows:
“(a) Each officer of this state, or county, city, or district, and any other person charged with the receipt, safekeeping, transfer, or disbursement of public moneys, who either: (1) without authority, appropriates any portion to their own use, or use of another; or, (2) loans any portion; makes any profit, or uses for any purpose not authorized by law; or, (3) knowingly keeps a false account, or makes false entry or erasure in any account; or, (4) fraudulently alters, falsifies, conceals, destroys, or obliterates any account; or, (5) willfully refuses to pay over, on demand, any public moneys in their hands, upon presentation of a draft, order, or warrant drawn upon these moneys or, (6) willfully omits to transfer when required by law; or, (7) willfully refuses to pay over to any authorized officer to receive any money imposed by law : Is punishable by California state imprisonment two, three, or four years, and disqualified from holding any office in this state."
Under Penal Code 424, there are a variety of ways a person can commit the criminal offense of misappropriation of public funds. These include:
- Using public funds for your own use or the use of another person
- Loan public funds or make a profit from them, or use public the funds for any unauthorized purpose
- Knowingly maintaining a false account, make an entry or erase an account
- Conceal, alter, falsify, or destroy a public funds account
- Willfully refuse to pay over public funds from anyone who has authority, by warrant, or on presentation of a draft
The Los Angeles County prosecutor can charge with misappropriation of public funds based on a variety of theories. Contact a Los Angeles criminal defense attorney at our office for additional information.
Who is Considered a Public Officer?
Under PC 424, a public officer or a person entrusted with public funds includes any type of employee or official of a California state or local government agency. This includes an elected or appointed official, accountant, lawyer, rank-and-file employee, or even someone without a government job, but has custody, control, or entrusted with public money. This means you are responsible or have some type of control over, safekeeping, or the disbursement of public money.
A common example of misappropriation of public funds in Los Angeles County includes a situation where someone runs a nonprofit organization that receives all their funds to operate from the government. They remove the money from the nonprofits account and use it for their own personal living expenses. In this situation, they could be charged with misappropriation of public funds, under California Penal Code Section 424, even though they are not a government official or employee because they were entrusted with public money. If you need more information, contact our Los Angeles criminal defense law firm.
Elements of the Crime
In order for the prosecutor to obtain a conviction for misappropriation of public funds, they must be able to prove, beyond any reasonable, specific “elements of the crime.” These include:
- You were an officer of a California state or local government entity, or
- A person responsible for the receipt, safekeeping, transfer or disbursement of public funds
- You appropriated public money for your own use or use of another person, without authority, and
- You knew the law prohibited the appropriation public money, or you were criminally negligent in finding out whether they had the legal authority to make the appropriation.
Under these elements of the crime, “appropriating public money” means to use the money for own purposes, or for someone else, such a friend or family member. “Criminal negligence” simply means failing to use ordinary or reasonable care, or to be reckless with public money.
Embezzlement vs. Misappropriation of Public Funds
What’s the difference? While embezzlement under California Penal Code Section 503 is very similar to misappropriation of public funds, they are not the same. Embezzlement means you fraudulently appropriated property that belonged to another person that was entrusted to you. This applies to any type of property, not just money that belonged to the California government. In some cases, embezzlement charges are filed instead of, or even with charges of violating PC 424, misappropriation of public funds.
What are the Legal Penalties?
If you are convicted of misappropriation of public funds, in violation of California Penal Code Section 424, it’s a felony offense. The legal penalties include 2, 3, or 4 years in a California state prison, a maximum fine of $10,000, formal felony probation, and you will typically be ordered to repay the entire amount of misappropriated money. Additionally, a conviction means you will be prohibited from holding any public office in California.
What are the Legal Defenses?
Our Los Angeles criminal defense attorneys can use a variety of effective defense strategies if you have been accused of misuse of public money. These legal defenses include:
You didn’t act knowingly or with criminal negligence – the prosecutor has to be able to prove you specifically knew your acts were illegal or you were criminally negligent. In some cases, our lawyers might be able to able to cast reasonable doubt by showing it was just carelessness, or even a honest mistake. In other words, you did not know your actions with public funds were against the law.
The amount of public money was incidental and minimal – typically, the amount of public money needs to be substantial. However, PC 424 does not specifically define what would be considered substantial. In some cases, our attorneys might be able to prove the unauthorized expenditures of public money was not sufficient to support criminal charges.
Contact a Los Angeles Criminal Lawyer
If you are facing allegations of misuse of public funds under California Penal Code Section 424, your freedom and future are at stake. Call our Los Angeles criminal defense law firm to review the facts and circumstances surrounding your case. We have a history of success defending our clients against any type of theft or white collar crimes. We are experienced courtroom negotiators and will work aggressively to obtain the best possible outcome on your case. Contact us at 877-781-1570.