CALIFORNIA PENAL CODE 424 PC – MISAPPROPRIATION OF PUBLIC FUNDS 

Under California Penal Code 424 PC it is a felony crime when public officers or trustees of public funds misuse these funds for improper purposes. A conviction may result in a prison sentence of up to four years, fines reaching $10,000.00, and loss of the ability to hold public office.

Though it is most frequently associated with state and local government officials, misappropriation of funds can be charged to any individual who has access to government money.

Individuals who hold public office, particularly those responsible for managing or supervising public funds, often have significant authority and limited oversight. Unfortunately, some individuals in these positions may exploit the trust placed in them and unlawfully enrich themselves. In recent times, there have been notable cases where influential individuals in local government have been exposed for misappropriating public funds. These incidents have led to heightened awareness and vigilance from prosecutors, law enforcement agencies, and government watchdog organizations concerning such offenses.

California Penal Code 424 PC: (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;— Is punishable by imprisonment in the state prison for two, three, or four years, and is disqualified from holding any office in this state. (b) As used in this section, “public moneys” includes the proceeds derived from the sale of bonds or other evidence or indebtedness authorized by the legislative body of any city, county, district, or public agency. (c) This section does not apply to the incidental and minimal use of public resources authorized by Section 8314 of the Government Code.”

Source: https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum=424.&lawCode=PEN

ELEMENTS

The legal definition of misappropriation of public funds varies depending on the specific section of the law that is alleged to have been violated.

In California, under Penal Code 424 PC, there are different ways in which a person can commit the crime of misappropriation of public funds. One of these ways is by appropriating public funds without authority.

To be guilty of this form of misappropriation of public funds, a prosecutor must prove certain elements. These include:

• The defendant is either an officer of a state or local government entity or a person responsible for the receipt, safekeeping, transfer, or disbursement of public funds.
• The defendant appropriated public money for their own use or the use of someone else without the authority of law.
• The defendant is giving away their property for free to someone else.
• The defendant either knew that the law prohibited this appropriation or was criminally negligent in failing to determine whether they had the legal authority to do so.

Second form of misappropriation of public funds outlined in Penal Code 424 PC is through unauthorized loans, profiting from, or misusing public funds.

To violate this section of the law, the following conditions must be met:

• You were either an officer of a state or local government entity or a person responsible for the receipt, safekeeping, transfer, or disbursement of public funds.
• A non penal law authorized or prohibited you from loaning public money or using public money under certain circumstances.
• You loaned public money, profited from public money, or used public money for a purpose not authorized by law.
• You either knew that your actions were illegal or were criminally negligent in failing to ascertain the legality of your actions.

Another way to engage in misappropriation of public funds in California is by knowingly maintaining a materially false account or making false entries or erasures in any account related to public funds. Alternatively, altering, falsifying, concealing, destroying, or obliterating any account related to public funds with the intent to defraud can also be considered misappropriation.

It is important to note that violating California’s misappropriation of funds law does not necessarily require the actual misappropriation of funds. Knowingly tampering with public money accounts or intentionally altering or destroying them with the intent to commit fraud can still be considered misappropriation of public funds.

Furthermore, you can face a conviction for the misappropriation of public funds if you:

• Willfully refuse or fail to pay or transfer any public funds under your control when presented with a draft, order, or warrant drawn upon those funds by a competent authority, as required by law; or
• Willfully omit or refuse to pay money received by you to any officer or person authorized by law to receive it.

Similar to other forms of misappropriation of public funds, you can be found guilty of this offense if you either knew that you were legally obligated to make the payment or if you were criminally negligent in not discovering this obligation.

EXCEPTIONS

California’s misappropriation of funds law includes an exception for the misuse of “incidental and minimal” amounts of money. This means that engaging in activities involving small sums of money would not be considered a violation of this law, and you would not be held guilty for such actions.

EXAMPLE

“John worked as a financial manager for a local government agency in California. During his time in this role, he was responsible for managing the agency’s budget, including allocating funds for various programs and services. However, an audit revealed discrepancies and irregularities in the agency’s financial records, indicating that John had diverted public funds for personal use.

Subsequent investigation by law enforcement led to criminal charges being filed against John under California Penal Code Section 424 PC for misappropriation of public funds. The prosecution alleged that John knowingly and unlawfully misused public funds allocated for specific government programs, in violation of the law.

The case brought attention to the misuse and mismanagement of public resources within the agency, and the charges against John highlighted the serious legal consequences associated with mishandling public funds in a position of financial responsibility.”

PENALTIES, PUNISHMENT, AND SENTENCING

Violation of California Penal Code 424 PC, which pertains to the misuse of public funds, is considered under felony crimes in the state. If convicted, potential penalties may include formal probation, imprisonment ranging from two to four years, and/or a fine of up to $10,000. Furthermore, individuals found guilty of this offense will be barred from holding any public office in California. For California state employees, a conviction under PC 424 carries even graver implications than a standard criminal conviction.

DEFENSES

Facing charges of misappropriation of public funds can have devastating effects on your personal and professional life. These allegations often garner intense media scrutiny and can lead to public humiliation.

We are here to offer our assistance. Our Los Angeles criminal defense attorney is well-versed in the primary legal defenses against PC 424 charges. These may include:

• Lack of knowing or criminal negligence: If you can demonstrate that you did not knowingly or negligently commit the alleged actions, this could serve as a defense. A genuine but mistaken belief in the legality of your actions, as long as it does not involve gross negligence, might absolve you of the crime.
• Insignificant and trivial amounts involved: California law does not explicitly define “incidental and minimal” amounts. However, misappropriation of public funds typically applies to substantial amounts, not trivial ones. Whether an amount is considered incidental and minimal may hinge on the specific circumstances of the case, as a few thousand dollars may be significant in some contexts but trivial in others.

IMMIGRATION CONSEQUENCES

A conviction under PC 424 can potentially have adverse immigration consequences, as it falls under the category of a crime involving moral turpitude (CIMT) or an aggravated felony, depending on the specific circumstances of the case.

• Crime Involving Moral Turpitude (CIMT): A CIMT refers to a crime that involves morally reprehensible conduct. Convictions for crimes involving moral turpitude can result in immigration consequences, including inadmissibility, deportation, or denial of immigration benefits.
• Aggravated Felony: Depending on the specific circumstances of the conviction, a PC 424 offense could be considered an aggravated felony under immigration law. Aggravated felonies have severe consequences for non-U.S. citizens, including mandatory detention, ineligibility for certain forms of relief, and almost certain deportation.

To fully understand the immigration consequences of a conviction under PC 424, it is crucial to consult with an immigration attorney. They can assess your specific situation, immigration status, and criminal record to provide tailored advice and guidance. If you do not have or know of an immigration lawyer, the Tabibnia Law Firm can refer you to one.

EXPUNGEMENT

A conviction under California Penal Code Section 424 PC for misappropriation of public funds cannot be expunged. This is because convictions for certain serious offenses, including felonies that result in state prison sentences, are generally not eligible for expungement.

Therefore, a conviction related to misappropriation of public funds, which is a felony under Penal Code Section 424 PC and can result in a prison sentence of up to 4 years, would typically not be eligible for expungement in California. If you’re looking for information on expunging a crime in California, contact our Los Angeles expungement attorney. 

RELATED CRIMES

• California Penal Code 503 PC – Embezzlement
• California Penal Code 67 & 68 PC – Bribery of public officials

SPEAK WITH CRIMINAL DEFENSE LAWYER FROM TABIBNIA LAW FIRM

If you are facing allegations of misappropriating public funds, it is crucial to seek guidance from a reputable Los Angeles Criminal Defense Attorney promptly. A conviction for this offense can lead to significant and long-lasting consequences. Cyrus Tabibnia, a criminal defense attorney with over 19 years of experience in prosecuting and defending white-collar crime cases, leads the Tabibnia Law Firm. Known for his successful representation in similar cases, Cyrus Tabibnia can develop a strong strategy by meticulously analyzing the details of your situation. His legal services are available to individuals throughout Southern California, and you can arrange an initial consultation by dialing 866-713-2159.

Sources:

• California Penal Code 424
• California Code, Penal Code – PEN § 424
• CALCRIM No. 2765. Misappropriation of Public Money (Pen. Code § 424(a)(1-7))