California employees may have permission to use company funds for work expenses. However, an employer may later question how that money was spent. A dispute over company spending does not always mean a crime took place. Under California law, embezzlement involves the fraudulent use of property placed in someone’s care.
When does authorized spending cross legal boundaries?
Embezzlement occurs when someone fraudulently takes or uses property entrusted to them. An employee may face charges for knowingly using company funds for an improper purpose. Prosecutors must prove fraudulent conduct and an intent to deprive the owner of the property or its use, even for a short time.
Under Cal. Penal Code § 511, a good faith “claim of right” defense applies if an employee openly appropriates funds under an honest belief of entitlement, provided the claim is not based on an illegal offset.
What factors determine criminal liability?
Investigators may review spending records, company rules and payment details to find out whether funds were misused. Several types of evidence may help explain what the employee was allowed to spend:
- Expense records: Reports may show where company funds went and why.
- Written approvals: Emails or signed forms may show that a manager approved the spending.
- Company policies: Written rules may explain which expenses were allowed.
- Payment records: Receipts and bank statements may help explain disputed purchases.
These records can provide useful facts, but they do not guarantee that charges will be dropped. Investigators may also review hidden purchases, changed records or false expense claims for signs of fraud. Embezzlement involving money or property valued over $950 is prosecuted as grand theft, whereas amounts of $950 or less are prosecuted as petty theft. However, some exceptions apply and certain transactions may be combined when deciding the charge.
How do authorization limits affect criminal liability?
Spending more than the approved amount may raise concerns. Still, breaking a company rule does not automatically mean embezzlement occurred. Prosecutors must prove that the employee fraudulently used entrusted property with the required criminal intent. A disagreement over spending rules may remain a workplace matter rather than a crime.
Written approvals, payment records and company policies may help explain the employee’s actions. A California criminal-defense attorney can review these facts and assess whether the evidence supports an embezzlement charge or a possible defense.
