What is Misappropriation of Public Funds?
The public funds misappropriation law is outlined in California Penal Code Section 424 and is typically classified as a white collar crime.
In simple terms, it makes it illegal to use public money for purposes unrelated to public benefit or for personal gain. This crime is commonly referred to as misuse of public funds.
Misappropriation of public funds is usually charged against local or California state officials responsible for managing the funds.
Still, anyone with control over government funds can also be prosecuted for these charges.
Misappropriating public funds is always classified as a serious felony. A conviction under California Penal Code Section 424 can result in up to 4 years of state prison and a fine of up to $10,000.
Additionally, individuals charged with misappropriation of public funds often face related criminal charges such as embezzlement, grand theft, or money laundering.
If you are under criminal investigation or have been charged with misappropriation of public funds, it is important to consult a California criminal defense lawyer to examine the case details.
What Does PC 424 Say?
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 the 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 a 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 for two, three, or four years, and disqualified from holding any office in this state."
Different Ways to Violate PC 424
Under Penal Code 424, a person can commit the crime of misappropriating public funds through various methods, such as:
- Using public funds for personal use or benefiting another individual.
- Profiting from, or misusing public funds for unauthorized purposes.
- Knowingly keeping a false record, creating an entry, or deleting an account.
- Concealing, changing, falsifying, or destroying a public funds account.
- Intentionally refuse to disburse public funds to anyone with official authority, whether by warrant or upon presentation of a draft.
A prosecutor may rely on several theories to charge you with misappropriation of public funds.
Who Qualifies as a Public Officer?
Under PC 424, a public officer or a person entrusted with public funds refers to any employee or official of a California state or local government agency. This encompasses
An individual who is elected or appointed, such as an official, accountant, lawyer, or regular employee—regardless of whether they hold a government position—who has custody, control, or is entrusted with public funds.
This indicates that you are responsible for or have some level of authority over the safekeeping or distribution of public money.
A typical example of public funds misappropriation involves someone running a nonprofit organization that solely receives government funding for its operations.
They withdraw funds from the nonprofit's account and use them for personal expenses. In such cases, they could face charges of
Misappropriation of public funds under California Penal Code Section 424 applies even if the individual is not a government official or employee, provided they were entrusted with public money.
What Factors Must Be Proven to Convict?
To secure a conviction for misappropriation of public funds, the prosecutor must prove, beyond any reasonable doubt, the specific "elements of the crime." These elements include:
- You were an officer of a California state or local government entity, or
- An individual responsible for receiving, safeguarding, transferring, or disbursing public funds.
- You used public funds for your own benefit or that of someone else without proper authority, and
- You either knew that the law forbade the appropriation of public money or you were grossly negligent in checking whether they had the legal authority to do so.
Under these elements of the crime, "appropriating public money" means using the funds for personal or other purposes, such as friends or family. "Criminal negligence" means failing to exercise ordinary or reasonable care or acting recklessly with public money.
How Is Misappropriation Different From Embezzlement?
Embezzlement under California Penal Code Section 503 is quite similar to, but not identical with, misappropriation of public funds. It involves the fraudulent appropriation of property entrusted to you by another person.
This can include any kind of property, including money belonging to the California government. Sometimes, embezzlement charges are brought instead of, or alongside, PC 424 charges for misappropriation of public funds.
What are the Penalties If Convicted?
If convicted of misappropriation of public funds under California Penal Code Section 424, it is a felony. Penalties can include the following:
- 2, 3, or 4 years in state prison,
- a maximum fine of $10,000,
- formal felony probation, and
- requirement to repay the entire amount misappropriated.
Moreover, a conviction will bar you from holding any public office in California.
What are the Best Defenses for PC 424?
Our criminal defense attorneys can deploy a range of effective defense strategies if you face accusations of misusing public funds. These legal defenses include:
- You did not act intentionally: The prosecutor must prove you knew your actions were illegal or that you were criminally negligent. Sometimes, our lawyers can create a reasonable doubt by demonstrating it was simply carelessness or an honest mistake. Essentially, you were unaware that your use of public funds was unlawful.
- The public money involved was incidental: Normally, the amount of public funds should be significant. However, PC 424 does not explicitly specify what qualifies as substantial. In certain cases, our attorneys might demonstrate that the unauthorized public expenditures were insufficient to establish criminal charges.
If you are accused of misusing public funds under California Penal Code Section 424, your liberty and future are on the line. Contact our Los Angeles criminal defense law firm, Cron, Israels & Stark, to examine the details and context of your case.
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