Embezzlement

San Mateo Embezzlement – Privatizing Criminal Prosecution to Circumvent the Constitution (CA Penal Code 503)

First District Court of Appeals Judge Martin J. Jenkins.

In a decision that rocks the foundation of the U.S Constitution and will likely have far reaching consequences, the First District Court of Appeals ruled that a private law firm’s investigation and cooperation with the District Attorney does not make the materials used in that investigation subject of mandatory disclosure rules and the principles set forth in Brady v. Maryland.

BACKGROUND

The Seminal case of Brady v. Maryland dictates that the prosecution must disclose any and all exculpatory materials derived in the course of a criminal investigation.  This includes; evidence which proves defendant’s innocence, reduce his sentence, or would allow for impeachment of any witness.  The rule is means to strengthen the corner stone of our criminal justice system.

People v. Shehayed is a San Mateo Embezzlement case (CA Penal Code 503) involving a CEO accused of using company funds to pay personal obligations.  It is clear that a private law firm was retained by the company and worked closely with the San Mateo Office of the District Attorney to investigate and collect evidence against Mr. Shehayed.  Obviously had the District Attorney collected this evidence, it would be subject to the Brady rule and discoverable by the Defense team.  The question raised in this case is; What are defendant’s Brady rights if the materials available to the District Attorney are gathered by a private party such as a law firm.

San Mateo Judge Joseph Scott agreed with the defendant that any exculpatory materials found by the private law firm in investigating this matter should be handed over to the defense.  However, the court of appeals held that the law firm in question was simply a cooperating witness and that therefore the District Attorney was not obligated to turn over any materials known to the Santa Clara District Attorney and which may be necessary for Mr. Shehayed’s defense.

 

ANALYSIS

Government actors are subject to some limitation in investigating a criminal case.  These limitations are meant to guarantee against any misconduct and assure a proper defense.  For example, a statement derived in violation of the rules set forth in Miranda v. Arizona, may be excluded from evidence.  The remedy for an improper search is the exclusion of evidence found in that search.

California penal code section  1054.1 outlines the prosecution’s obligations to disclose relevant materials to the defense.  It states, in relevant parts, that the prosecution MUST disclose:

  • “(c) All relevant real evidence seized or obtained as a part of the investigation of the offenses charged.
  • (d) The existence of a felony conviction of any material witness whose credibility is likely to be critical to the outcome of the trial.”

However, none of these remedies are available if the bad actor is a private entity.  Statements obtained by Loss Prevention in a petty theft case are not subject to Miranda and are admissible against defendant.  Likewise, the fruits of an illegal search are not subject to Fourth Amendment remedies if these are obtained by loss prevention officers as these actors are not under government control.

While this outcome is somewhat justified with regards to a loss prevention officer, the case before the court presents a different set of legal challenges because, in this case, the private investigators worked closely with the District Attorney and helped form a strategy to prosecute the case.

The first circuit’s ruling opens the door to potential abuses and prosecutorial misconduct.  Could a government agency simply ignore the U.S. constitution by relying on private party investigation of criminal cases?  It appears that the court finds this outcome acceptable.

The core values of our criminal justice system such as the burden of proof, the ability to properly cross examine witnesses and the right to evidence which will be presented against a criminal defendant have been shattered by this decision.  Defendant’s trial lawyer will likely appeal this decision.  It would be interesting to see if the California Supreme court takes on this issue.

Summit Defense Criminal Attorneys is the Bay Area’s premiere exclusively Criminal Defense firm.  With six offices in the bay area, our criminal lawyers have successfully defended hundreds of criminal cases in San Mateo, Santa Clara, Alameda, San Francisco, Marin and Contra Costa counties.

Bay Area Crime Penalties – disproportionate and UNJUST

About ten years ago, I handled a criminal matter in San Jose Superior Court.  It was slightly unusual because it was handled by the Attorney General’s office but otherwise, it was a routine arrested for embezzlement case (CA Penal Code 503).  I had managed to convince the prosecutor to meet me for a cup of coffee to discuss the case and heard perhaps the most difficult statement I have had to digest as a criminal defense lawyer.

The offer in the case (thirteen years in state prison) seems absurd to me given my client’s age and lack of criminal background even conceding the $350,000 embezzlement.  What was really impossible to digest, however, was when the prosecutor routinely admitted that had the case been in Alameda, or San  Francisco, the offer would have been drastically reduced (3-5 years).

I considered a meeting between two similarly situated individuals in state prison who realize their background and crime are identical but one was being released in days while the other had a decade of time left all because she committed a crime in Santa Clara County as opposed to Alameda.

The perverse misery of this conversation has haunted me for years.  How can two counties located 50 miles from each other get “justice” so different?  Can the rate for a crime in Santa Clara really be triple that in Alameda or San Francisco.

Through the years, I have examined various offers in the six bay area counties (Marin, San Francisco, San Mateo, San Jose, Alameda and Contra Costa) and found that across the board, penalties for crimes in Santa Clara, Marin and San Mateo FAR exceed those in Alameda, San Francisco or Contra Costa.

 

Some Examples:

The starting offer for a DUI in Santa Clara is 12 days of Sheriff work jail alternative. The same applies in San Mateo.  In alameda it is 4.

The offer for a misdemeanor domestic violence in Alameda usually does not require any jail time.  That isn’t true in Santa Clara or San Mateo.

The issue becomes far more drastic in felonies.  Both Santa Clara and San Mateo District Attorney offices routinely require prison or jail time for felony convictions, something that is fairy rare in Alameda.

Through the years, I have learned that the dreaded conversation between two similarly situated people meeting in prison is far too common.  Counties should have some leverage in exacting the price of justice from its citizens.  However, one county offering  13 years in state prison while another county offering 3 is a travesty of justice.

We at Summit Defense Criminal Attorneys will try to collect signatures and put this matter for ballot in the next state wide elections.  This will be a tough fight because the fear mentality that has gripped our society has made the accused an easy target.  But if we don’t try to fix this problem, than we are living a daily injustice.

SF Chief Financial Officer For Nonprofit Convicted of Embezzlement (CA Penal Code 503)

A San Francisco man has recently been sentenced for his part in an embezzlement scheme related to the nonprofit for where he once served as the chief financial officer.  The 51-year-old (name withheld for reasons of privacy) was tried this past November on charges of tax evasion and fraud.  Court records show that he took more than $800,000 for himself and another $120,000 in payments to an employee who did not actually work for the organization.  He evidently accomplished all of this via the use of credit cards and checks for the nonprofit, both of which he had full control over; he has been sentenced to a period of nearly 5 years in federal prison.

18 U.S. Code, Chapter 31 is the federal law that addresses embezzlement and theft.  It is easy to understand what embezzlement is when you think of it as the theft of property; except, in these cases, the property is money or goods that an individual has access to and control over in name, but does not have actual ownership of those monies or goods.  There are at least 17 different kinds of embezzlement, ranging from the theft of a major artwork to the theft of public money, property, or records.

Depending upon which section of Chapter 31 an individual has been charged under, there are a variety of different penalties they may be subject to if convicted.  This also means that there are separate penalties for misdemeanor embezzlement and felony embezzlement (CA Penal Code 503).  The man in the aforementioned case was likely charged under the section of Chapter 31 that covers ‘programs receiving federal funds’ as he worked for a nonprofit agency.  If this is the case, his near 5-year sentence was light, considering that he could have been forced to remain in federal prison for 10 years and pay a $250,000 fine.  He was also asked to pay an additional $1.1 million in restitution to the outfit where he was previously employed.

Nonprofit Worker Arrested for Embezzling from Disabled Clients in Santa Rosa (CA Penal Code 503)

66-year-old Santa Rosa man (name withheld in order to protect the privacy of the accused) has recently been arrested for having stolen at least $400,000 from disabled clients of the nonprofit for which he worked.  It seems that he would simply take checks that were meant for individuals served by the nonprofit organization and deposit them into his own accounts.  He has been charged with embezzlement.

Embezzlement could be considered a kind of property theft as it is a white collar crime wherein which an employee steals from either clients or from their employers. (CA Penal Code 503). Specifically, if you have been charged with embezzlement, it means that you have absconded with monies or property that was entrusted to you.  The fact that the property was entrusted to you directly is the key point.  If property or monies have not directly been entrusted to you, then you may be charged with theft under a different section of California law.

Depending on the value of the property or amount of monies you have stolen matters as to how it will be prosecuted.  If the value is below $950, then you will likely be charged with petty theft (CA Penal Code 488), whereas you may be charged with grand theft (CA Penal Code 487) if the value of the stolen property is over $950.  Furthermore, prosecutors must be able to prove that the property or monies you stole were entrusted to you. This means that they must also prove that you had some kind of relationship with the alleged victim that involved their putting trust in you.

This particular crime is a ‘wobbler,’ meaning that it may be prosecuted as a misdemeanor or as a felony.  Conviction on felony embezzlement charges may mean up to 3 years in state prison and a fine of $10,000; conviction on this charge as a misdemeanor means that you may face 1 year in county jail and a $1,000 fine.

 

Alameda County Judge Sentenced for Embezzlement of Elderly Neighbor (CA Penal Code 368(d) and 368(e))

Former Alameda County Superior Court Judge (name withheld for privacy) has been given five years’ probation in an elder abuse case against a 97-year-old female neighbor. He was arrested on charges of elder abuse and other felony counts; he’d taken a quarter-million dollar loan from the woman and stolen a small amount of other monies from her as well. He effected this crime by gaining power of attorney over the elderly woman and her husband and then proceeding to sell off some of her property. In the end, most of the felony charges against him were dropped and he pled no contest to the allegations of elder abuse and perjury.  Additionally, he has been disbarred in the state of California and has been removed from the bench.

In California, criminal elder abuse laws fall under several different sections of the Penal Code.  What he has pled no contest to is charges pursuant to (CA Penal Code 368(d) and 368(e)), in which a caretaker either steals or embezzles money from someone that they are meant to be taking care of.  Penalties for these particular crimes are harsh.  Penalties for a misdemeanor section d (when the amount is equal to or more than $950.00) charge includes 1 year in county jail and a $1,000 fine or, for a felony count (when the amount exceeds $950.00), up to 4 years in state prison.  Pursuant to section e, given that the amount taken is over $950.00, penalties may include up to 4 years in state prison and a fine not to exceed $1,000.  If the value of the property is not in excess of $950.00, one year in county jail and the same fine.