Misappropriation of Public Funds

Penal Code 424 of the California laws defines “misappropriation of public funds” as the act of misusing public funds when assigned to manage them. Most PC 424 cases involve individuals with access to government money including local and public officials. PC 424 also outlines various ways an offender can commit this crime. They are as follows:

Prosecutors may build your PC 424 case based on evidence that shows you benefited or allowed someone else to benefit from funds meant for the public without legal consent. They’ll have to prove that you intentionally disobeyed the law or you embezzled money for personal/someone else’s use. Your case can also be based on the fact that you were a local or state government officer responsible for receiving, keeping, transferring or disbursing public funds.

Offering unauthorized loans using public finances is an instance of PC 424 offenses. The prosecution team needs to prove that you loaned or profited from public funds without legal authorization. Your charges might be severe if you knew that the act was illegal but disobeyed for selfish gains. You must also be a local government, or state official tasked to receive, keep, disburse of transfer public funds for PC 424 to be applicable.

Refusing to Transfer or Pay Public Funds

You risk criminal conviction if you willfully omit or refuse to transfer or pay any public finances that you manage. Legal action will be taken if you were presented with a warrant, order or draft asking you to initiate the payment or transfer. The same will happen if you withhold money that a public official should receive. Prosecutors may charge you under PC 424 if you were aware of and neglected the laws regarding misappropriation of public funds.

Penal Code 424 considers false erasure or the creation of accounts that hold public finances as a criminal offense. You'll be charged for keeping a fake account or updating a real account with falsified data. Prosecutors will also charge you based on the fact that you altered, concealed or destroyed an account holding public funds with a goal of committing fraud.

Activities that involve fairly small sums of cash aren’t punishable as PC 424 offenses. PC 424 makes an exception for these activities if they were incidental. Your lawyer will have to present sufficient evidence defending this claim to have your charges dropped.

Misuse of public finances is a felony offense under Penal Code 424. Possible punitive measures include formal probation and a fine not exceeding $10,000. You also risk facing two, three or four years locked up in state prison. The State of California will also prohibit you from holding any public office in California.

PC 424 cases involve thorough collection and analysis of facts/evidence that can either be used to find you guilty or innocent. Stick to your lawyer's legal advice throughout the legal process. Expect the law enforcement officers to label everyone working in your department as a suspect before making an arrest. You have to be impartial and cooperative with the investigations before and after your arrest. Still, remember everything you say will be held against you, therefore you can choose to cooperate but remaining silent may be your best option.

Police officers will temporarily lock you up in a cell as you wait for the bail hearing. During this hearing, your attorney will present valid reasons for the judge to grant you bail. The prosecution team may counter these arguments by introducing more serious allegations against you. Upon weighing the arguments from both parties, the judge may or may not grant you bail.

Bail amounts for “misappropriation of public funds” cases usually depend on the amount of the misused public funds. The bail can be set to tens of thousands of dollars if you’re accused of misusing large amounts of public money. You should give your lawyer any information that may help prove your innocence whether you’re at home on bail or at the cell after being denied bail.

California courts usually handle financial crimes with the highest level of strictness. Expect the prosecutors to be fierce when making allegations against you through any phase of the court process. Your case will progress to the next level if their claims are more serious and convincing than your lawyer’s defenses. Entrust your attorney with the same energy you did at the initial stages of the court process.

You may be required to take “not guilty”, “no contest," or "guilty" pleas at the arraignment trial. With a "no contest" plea, you get to admit that though you didn't commit the PC 424 offense, you allow the court to determine the penalties. A “guilty” plea implies that you admit having committed the crime while a plea of “not guilty” means that you admit to being innocent. Expect the judge to summon and ask you whether you’re aware of the consequences of the plea you took.

You'll automatically be convicted if you take the plea of "guilty." Your sentencing may be more lenient than that of taking a “not guilty” plea. Your request may be treated as part of the evidence used to convict you. Note that such a confession won't prevent the case from proceeding to full trial or relieve the prosecution team from presenting allegations against you.

Most PC 424 offenders tend to cover their tracks hence making it difficult for prosecutors to build a case against them. Regardless of the tactics used to cover the crime, the prosecution team must build a case through every possible means. Explained below are various ways prosecutors prove that you committed a PC 424 offense.

1. You Had Legal Obligation to Handle the Public Funds

One of the elements of a PC 424 case involves having the legal obligation to manage public finances. Prosecutors can rely on documents that highlight your job responsibilities as evidence. They have more leverage on you if one of these job responsibilities state that you were in charge of handling public money at the time of the crime. Criminal proceedings against you can’t begin if they fail to prove this fact.

2. You Breached the Obligations of Your Job

Formal jobs usually require the candidates to agree to specific terms before getting hired. In this context, one of the conditions in your employment contract may prohibit you from misusing public funds. Prosecutors will read out the clause in your employment contract that you breached when you committed the PC 424 offense. Such a strategy can only work if you willfully signed the contract when getting the job.

3. You Fraudulently Took or Utilized the Money for Personal Gains

Penal Code 424(a)(1) asserts that it's illegal to appropriate public finances for your use or someone else's use. PC 424(a)(2) also states that it’s unlawful to loan the money or generate profits out of it without any authorization. The prosecution team can give proof of the items you purchased for yourself or another person using the public finances. Evidence, in this case, may be in the form of payment receipts or bank statements.

4. You Created a False Account or Made False Entries on an Existing Account

Prosecutors may use bank statements of a newly opened or an altered account to develop their case against you. They may also get previous bank statements and compare them with the current ones to prove that the account was changed. Penal Codes 424(a)(3) and 424(a)(4) consider acts such as falsifying accounts or making false entries on accounts as elements of a “misappropriation of public funds” case.

5. You Willfully Refused to Transfer the Funds to the Intended Destination

The prosecution team may base their allegations by referencing Penal Codes 424(a)(5), 424(a)(6) and 424(a)(7). You may be charged for refusing to hand over the funds to their intended recipients after the relevant authorities issue you with a warrant or order under these clauses. Prosecutors may present the subpoena, order, and draft that mandated you to transfer the public finances in your possession. They may also ask public officers, expert witnesses or other individuals who expected to receive the cash to testify as witnesses against you.

You risk losing your career and having a bad reputation and bad criminal record when prosecuted for a PC 424 offense. Your case can also attract unnecessary attention from the press if you’re a high ranking public official. Having a lawyer by your side can guarantee you the best odds. Discussed below are the legal defenses that can help argue your innocence.

1. The Misused Funds were Minimal or Incidental

Penal Code 424 only regards misappropriation of public finances as a criminal act involving sums of money beyond the minimal or incidental threshold. Your case has the exception of being dismissed if the mishandled funds were substantially little. The circumstances surrounding your case can help determine whether you qualify for the exception or not.

2. You Didn’t Neglect the Law or Act Willfully

“Intent to defraud” is the elements that prosecutor need to prove before your case goes through the judicial process. Penal Code 424 finds offenders guilty if they were aware that their actions were illegal. This law also finds them guilty if their actions were motivated by criminal negligence.

3. You Used the Funds for their Intended Purpose

Your attorney can present evidence showing that you used the public finances as instructed by your superiors. Examples of evidence in a PC 424 case include bank statements or payment receipts. For instance, you may have your attorney present receipts showing that you disbursed a certain sum of money to an intended party. The evidence may also prove that you used the cash to finance a project as directed by your superiors.

Your legal expert can assert that you didn't intend to misuse the funds or that you didn't realize that your actions were illegal. A legal defense that takes such an approach is known as a "mistake of fact." You can rely on it to negate the prosecutor's allegations indicating that you were in the right mental state or didn't intend to commit the crime. As long as it's honest, mistake of law can serve as a legal defense in court.

4. The Funds Didn’t Qualify as Public Funds

Public funds are sums of money coming from the government to help the public access certain goods and services. The cash is derived from revenue generation methods such as taxation, payment of fines and licensing. Your attorney can claim that the money you spent didn't come from the government. The legal expert can also prove that the funding wasn’t intended for any member of the public.

5. You Acted Under Duress

California courts might pardon your criminal case if you committed a crime with a reasonable belief that your life was in danger. In this case, your attorney can claim that a third-party threatened you to embezzle the funds to a particular account. Evidence such as text messages or recorded calls can help prove your innocence. The court may decide to prosecute the actual perpetrator of the crime and dismiss your charges.

6. Your Actions were Out of Necessity

Public funds are usually stored in secure accounts while the authorization of the account is given to a limited number of individuals. Your case may be excused if you committed the PC 424 offense to avoid more significant consequences. For instance, you chose to avoid potential fraud attempts on the funds by using them. This defense may work if you tried to approach the authorities but they didn’t respond, or you didn't have time to report the matter.

White-collar crimes attract severe punitive measures in California. Besides PC 424 offenses, they include Internet fraud, mail fraud, credit card fraud and insurance fraud theft among others. Prosecutors may have you charged for crimes related to misappropriation of public finances. Regardless of their motive, here are some of the crimes that are similar to the misuse of public funds.

1. Bribing by Public Officials

Penal Codes 67 and 68 consider bribery conducted by public officials as a wobbler crime (misdemeanor or felony). Civilians also risk facing the same charges if they try bribing public officials. PCs 67 and 68 consider it illegal to offer something valuable to a known government worker. They also highlight that it’s unlawful for a government worker to solicit something valuable with a corrupt motive.

2. Embezzlement

Most embezzlement crimes are convicted along with PC 424 crimes in California. Embezzlement is the act of appropriating an item that was entrusted to you or is owned by someone else. Such a crime applies to properties including both private and public funds. You can only be charged for this offense under PC 503 if you fraudulently used or converted the item for selfish purposes.

3. Forgery

Penal Code 470 considers the act of creating or using a written document to commit fraud as a forgery willfully. Such a crime qualifies as a wobbler with penalties being a one-year county jail sentence for a misdemeanor and a 16-month to a 3-year county jail sentence for a felony. The prosecutors could charge you for both forgery and embezzlement if you used the forged document to withdraw funds from an unauthorized account.

4. Insurance Fraud

Insurance fraud involves attempts aimed at defrauding a particular insurance company. Penal Code 548 highlights that the act of defrauding may entail injuring, destroying, abandoning or disposing insured property to with intent to reclaim the benefits. The offense is punishable as a felony or misdemeanor depending on the extent of the offender’s actions.

5. Health Care Fraud (Medicare Fraud or Medi-Cal Fraud)

Medicare fraud cases usually involve programs such as Medi-Cal, which is California’s state-approved health insurance program. Medi-Cal targets disabled, elderly and low-income individuals. Billing services that patients didn’t receive can be considered as a form of health care fraud. Under Penal code 550, the penalties for such a crime include up to five years sentencing in county jail or a fine that’s double the defrauded amount.

The criminal procedure for prosecuting PC 424 cases is thorough and frustrating. Our law firm, Vista Criminal Attorney, strives to keep clients updated throughout this process. We accept clients out of the North County area seeking legal representation for their criminal charges. If you are charged with a crime in Vista, CA give us a call at 760-691-1551 today to speak to our Vista criminal defense lawyer.