Misappropriation of Public Funds – CA Penal Code 424 PC

January 7, 2018

In California, misappropriating public funds is charged under Penal Code 424 pc making it unlawful to use public funds for a personal or unrelated public benefit.[1] This charge is a straight felony that cannot be reduced to a misdemeanor. Persons ordinarily associated with this charge are those working in the public sector who handle or control monies stemming from the public. Furthermore, it is not uncommon for someone to face additional charges of receiving stolen property, embezzlement, grand theft, or money laundering.

Financial Crime

Specifically, PC 424 makes it a crime for a public officer to use public funds in any of the following ways:

  • Use public funds for their own use or the use of another without authoritative law;
  • Loan public funds, make a profit out of, or use the funds for an unauthorized purpose;
  • Knowingly keeping a false account or make an entry or erase any account;
  • Falsify, alter, conceal, or destroy any public fund account;
  • Willfully refusing on demand to pay over funds from someone with authority, by warrant, or upon presentation of a draft.

As you can see, the prosecutor may rely on a number of different theories prior to charging someone with misappropriation of public funds. In addition, nothing is in the law preclude the prosecution from relying on multiple theories when proving their case against you.

What does the prosecutor need to prove for PC 424?

Misappropriation of public funds is very similar to California embezzlement because they both involve misappropriating funds from a person in a trusted position. In order for someone to be guilty of penal code 424, the prosecutor must prove:

  1. You were an officer of the State of California, County, City, town, or district;
  2. You were entrusted to handle public funds;
  3. You fraudulently converted, used, or refused to turn over public funds;
  4. When you acted, you intended to deprive the true owner of its use.[2]

What are the Legal Defenses?

Knowledge can require that you harbored the intent to deprive the entity of public of its rightful funds or that you acted with criminal negligence in that you should have known that your act with criminal. However, ordinarily negligence, mistake, accident, or misfortune serve as viable defenses. With some much money and documents, money could be innocently used for an illegitimate purpose without you even realizing it. Additionally, misappropriation of public funds requires more than minimal loss or it being incidental. Consequently, minor unauthorized expenditures would not be sufficient to expose you to criminal liability.

Punishment & Sentence

Misappropriation of public funds is a serious offense not taken likely by the courts or prosecutors. Namely, because the public officer is charged with taking advantage of their trusted position. A conviction for penal code 424 is punishable in the state prison for 2, 3, or 4 years. In addition, a court will order you to repay all of the money misappropriated as a condition of your sentence.

Contact Us for a Free Consultation

If you have been arrested or are under investigation for misappropriation of public funds under penal code 424 pc, it is imperative that you consult with a reputable and experienced Newport Beach criminal defense attorney. Our office devotes a substantial amount of our practice to defending clients accused of white collar crimes and have a history of achieving noteworthy results in the state and federal level. We know how to effectively defend cases of this kind and dedicate our time to your interest. For more information and to schedule a free confidential consultation, contact the Law Offices of John D. Rogers.

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Legal Footnotes:

[1] Penal Code 424 – defined (“(a) Each officer of this state, or of any county, city, town, or district of this state, and every other person charged with the receipt, safekeeping, transfer, or disbursement of public moneys, who either:

  1. Without authority of law, appropriates the same, or any portion thereof, to his or her own use, or to the use of another; or,
  2. Loans the same or any portion thereof; makes any profit out of, or uses the same for any purpose not authorized by law; or,
  3. Knowingly keeps any false account, or makes any false entry or erasure in any account of or relating to the same; or,
  4. Fraudulently alters, falsifies, conceals, destroys, or obliterates any account; or,
  5. Willfully refuses or omits to pay over, on demand, any public moneys in his or her hands, upon the presentation of a draft, order, or warrant drawn upon these moneys by competent authority; or,
  6. Willfully omits to transfer the same, when transfer is required by law; or,
  7. Willfully omits or refuses to pay over to any officer or person authorized by law to receive the same, any money received by him or her under any duty imposed by law so to pay over the same;—“).

[2] There is no exact CALCRIM jury instruction outlining the requirements for this offense. However, the elements are similar to California embezzlement under CALCRIM 1806. See: https://www.justia.com/criminal/docs/calcrim/1800/1806.html

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