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Fraud
Fraud Crimes in Los Angeles
(California Penal Code §§ 470 P.C., 503 P.C., et seq.)
The Los Angeles Defense Attorney Law Firm handles practically every type of fraud crime, most of which fall into the following three categories: embezzlement, forgery, and white-collar crimes in general (including worker’s compensation fraud).
Embezzlement (California Penal Code § 503 P.C.)
If you are in a position of trust over an individual’s finances or property and you steal, misappropriate, or otherwise convert for your own use that person’s money or property, you will be charged with embezzlement. The key element for this crime is that you intended to permanently deprive the victim of said money or property.
If the amount of money or value of the property exceeds nine hundred and fifty dollars, then you’ll likely be charged with a felony. Anything less typically gets prosecuted as a misdemeanor. On the other hand, if you allegedly embezzle more than fifty-thousand dollars, you’ll receive a sentencing enhancement if convicted.
The key thing to remember about embezzlement is that unlike virtually all other theft-related crimes, the defendant in an embezzlement case initially had the right to lawful possession of the funds or property (or even services) at the time of the alleged theft. In other words, if you are a fiduciary by law or contract and allegedly absconded with some of your client’s money, you will almost certainly be charged with embezzlement.
Sample Misdemeanor Embezzlement Crimes
– Between 2012 and 2015 (three seasons), Moorpark (Ventura County) resident William S. Zulager served on the board of directors of the local Little League baseball organization. In December 2012, other board members allegedly uncovered evidence of financial malfeasance on Zulager’s part and filed a report with the Moorpark Police Department. Specifically, the board’s treasurer allegedly discovered a highly unusual Southern California hotel bill that was charged to the league, as well as payments made to a convenience store – charges which were allegedly made by Zulager. After conducting an investigation, Ventura County authorities charged Zulager with misdemeanor embezzlement as the total sums equaled less than the requisite amount to trigger a felony charge (nine hundred and fifty dollars). In mid-July 2016, Zulager was found guilty following a jury trial.
– In early December 2017, a director of a center at the University of California at Riverside allegedly discovered that Mr. Lauren M. Flores, a manager in the same center, had written checks to himself totaling almost $3,000 from a UCR account used to pay research subjects. UCRPD commenced an investigation, which led to Flores being charged with two misdemeanors for embezzlement from an employer and insurance fraud. Flores, who was fired by UC Riverside, reportedly confessed to the crimes (and repaid the full amount). Specifically, in late November 2018, he pled no contest to both charges.
– In late December 2015, officials for the Little League organization in Adelanto (San Bernardino County) allegedly discovered financial discrepancies in the organization’s bank accounts, and immediately reported them to the San Bernardino County Sheriff’s Department, which commenced an investigation and allegedly discovered that almost $20,000 was unaccounted for. As a result, at the beginning of March 2016, the San Bernardino County District Attorney’s Office charged League treasurer Ms. Stacy L. Blandon with felony embezzlement. She eventually pled no contest to a misdemeanor embezzlement charge, and in mid-January 2017, received a sentence of one day’s incarceration (but with credit for time served following her arrest), three years’ formal probation, almost $250 in court fines, and an undisclosed amount of restitution.
Sample Felony Embezzlement Crimes
– In 2010, Darryl McCauley, the half-brother and former manager of comedian and actor Dane Cook (Good Luck Chuck), was sentenced to six years in a California state prison after pleading guilty to embezzling millions of dollars from Cook over an approximately eight-year period. (His plea also included multiple felony counts of larceny and forgery.) For example, as part of his plea, at one point McCauley admitted that he simply wrote a check endorsed to himself for three million dollars from Cook’s business account. McCauley, a former prison guard, was also ordered to pay $12 million in restitution, as well as surrender numerous real estate and business assets. During a search, the police also found and seized over $800,000 in cash hidden in the wall of McCauley’s residence. McCauley’s wife, Erika, was also sentenced in the same case but only pled out to felony larceny for her role. She received three years in prison.
– In mid-September 2019, detectives from the Moorpark Police Department arrested Joe Rodriguez, a former employee in the human resources department of a local mortgage company. According to Moorpark PD, over a two-year period, Rodriguez had been inflating the employees’ payment invoices to vendors and pocketing the difference after remitting to the employees what they had actually earned. This scheme, which allegedly netted him several thousand dollars a month, began to unravel after he was laid off in March 2019. He was now facing multiple felony counts of embezzlement (grand theft) and money laundering.
– On July 1, 2013, a former LA County Sheriff’s Dept. sergeant named Bonnie T. Bryant III was arrested and charged with one felony count of embezzlement by a public or private officer, and one felony count of grand theft. According to the LASD, Bryant stole thousands of dollars in cash during sting operations staged in May and July 2012. At the time of his arrest, he was facing four years and six months in prison (including a special enhancement for carrying a gun during the alleged crimes).
What Can Happen If You Get a Felony Conviction for Embezzlement?
Misdemeanor embezzlement is punished exactly the same as petty theft – no more than one year in jail (if, in fact, incarceration is ordered by the sentencing judge).
Felony embezzlement (again, value at issue is more than $950.00) can be prosecuted as a misdemeanor or felony and therefore is known as a “wobbler offense” punishable the same as grand theft. That means up to either six or twelve months in jail (if sentenced as misdemeanor or misdemeanor grand theft, respectively) or, if prison is ordered, then the custody term will be sixteen, twenty-four, or thirty-six months (felony grand theft).
Defending an Embezzlement Charge
One way to attack this type of charge is by providing evidence (possibly instead of or in combination with your own testimony) that you were only temporarily borrowing the funds or using the property with the intent to return it in the near future to the owner.
Another element of this crime that might be attacked is the value of the property allegedly embezzled, which may require an expert witness to assist a jury in determining its value. Again, the amount will determine whether you are charged with a felony or misdemeanor.
Also, if you were never actually lawfully entrusted with the funds or property, then you cannot be charged with embezzlement, though you would probably be charged with a different offense, such as grand theft (felony) or petty theft (misdemeanor).
A so-called “claim of right” defense can also defeat an embezzlement charge if you can provide evidence that you subjectively (and not necessarily reasonably) believed that the funds or property belonged to or were owed to you. This, if true, defeats the key element that you intended to steal the asset from the owner. Obviously, if the money was in fact owed to you, for instance, then you could not be convicted of embezzlement.
Similarly, you might be able to show that you actually had the owner’s consent to borrow or take the subject funds or property. The consent, of course, could not have been given through any deceitful means on your part.
California Penal C. section 503 P.C.; CALCRIM Jury Instruction 1806.
Criminal Defense
How We Defend Embezzlement Cases
The end result of these cases is money – how much was taken from the owner and allegedly pocketed by the defendant, and what was the intention of the defendant in regards to the money. Occasionally, the owner-victim may be primarily interested in being made financially whole by the defendant, in which case the investigating detective or prosecuting attorney may be inclined not to pursue the case if restitution (a civil compromise) is made.
White-Collar Crimes
White-collar crimes consist of virtually every possible type of financial crime and fraud you can imagine, from your garden-variety nickel-and-dime embezzlement all the way up to complex, long-term money-laundering schemes. To put it another way, almost anything you can steal or rob without a weapon, force, or threat of the same falls under this category of offense.
More specifically, these types of crimes commonly fall into the following subcategories:
- Bribing public officials
- Fraud involving corporations
- Transactions involving credit cards
- Embezzling funds from your employer
- Crimes committed by fiduciaries (people in positions of trust)
- Forging signatures and documents
- Theft of another’s personal identifying information
- Any crimes involving computers, the internet, or social media
- Bank fraud
- Real estate fraud
- Fraudulent investment deals
- Robo-calling scams
- Ponzi schemes
- Insurance scams
- Welfare fraud
- Mail fraud
- Wire fraud
Most white-collar crimes can be prosecuted as either state or federal offenses, and can often be left up to the prosecutor to determine whether they should be charged as misdemeanors or felonies.
Defenses to White-Collar Criminal Charges
The same defenses apply here as they do to crimes involving theft and fraud in general. These include presenting exculpatory evidence that you never intended to permanently deprive the owner of the funds or property. Another alternative defense involves proving that you did not take the owner’s property for such an extended period of time as to deprive him or her of the majority of its value.
Evidencing that you lawfully obtained the owner’s permission to take or use the funds or property will also help you defeat such charges.
White-Collar Criminal Convictions
Sentences depend on whether your guilty or no-contest plea, or conviction following a jury or bench (judge-only) trial, resulted in a misdemeanor or felony. The amount of money or value of property allegedly taken as a result of the crime will also determine the severity of the sentence. So, too, will other factors, such as the number of victims affected and any sentencing enhancements. The latter includes any prior convictions involving deceit, theft or fraud.
Accordingly, you could receive no jail time, up to a year in county jail, or years or even decades in state or federal prison. You would also likely be subject to asset forfeiture and restitution orders.
Assuming you didn’t have to serve time in prison, you would also receive three or five years of probation – formal or informal, depending on various factors.
Finally, almost all white-collar offenses constitute crimes of moral turpitude, which indicate that the defendant acted with particularly reprehensible intent to deceive and steal. As a result, a conviction – even for a misdemeanor with no jail time – can result in the suspension or revocation of professional licenses, deportation if you’re not a US citizen, loss of employment and educational opportunities, dishonorable discharge from the military, and so forth.
Ninaz Saffari’s Approach to Defending White-Collar Criminal Cases
In particularly complicated cases, Ninaz will employ the services of private consultants and experts to sift through what could amount to hundreds or even thousands of pages of potential evidence. And if the documentation reveals exculpatory information that could mitigate the charges or even exonerate her client altogether, she will have her experts testify in court – typically at trial, but also occasionally at the preliminary hearing in felony cases.
Further, if you are facing ancillary consequences as discussed above, Ninaz will work with other attorneys and specialists to save your license, maintain your legal resident status, etc.
Forgery (California Penal Code 470 P.C.)
If you sign the name of another person (dead or living, real or fictitious) for the purpose of committing fraud, knowing that you lack the authority to sign, then you can be convicted of forgery.
The signature can be on virtually any type of document – again, so long as the intent was to defraud, and so long as the document has some type of legal significance. In other words, even an unsuccessful attempt to defraud can result in a forgery conviction.
There are both misdemeanor and felony forgery charges, depending on the amount at stake – if it’s less than $950, you will be charged with a misdemeanor.
Forgery can also include the counterfeiting of artistic works (with a forged signature) or even objects such as purportedly rare bottles of wine. However, as these types of forgeries typically involve the use of interstate commerce or electronic communications, they will almost always be prosecuted by the US Attorney’s Office in federal court.
The most famous (or infamous) forger in American history is Frank Abagnale Jr., who launched his criminal career at age fifteen in 1963. For the next six years, he embarked on a white-collar crime spree that was previously unknown in American history. His criminal antics included creating and assuming the identities of no less than eight people, including a jetliner pilot, a doctor, and a high-level state prosecutor. But his most notorious accomplishment was forging more than six million dollars in phony checks – all before he was old enough to vote. In fact, the national banking industry completely overhauled its procedures and safety mechanisms as a direct result of Abagnale. Incredibly, after serving less than five years of his twelve-year federal prison sentence, the FBI successfully lobbied to have his sentence commuted so he could assist them in nabbing other big-time forgers and counterfeiters. And, of course, Leonardo DiCaprio played him in the 2002 film Catch Me If You Can.
Otherwise, the majority of forgery cases involve much more mundane facts, such as forgeries of real doctors’ signatures in order to illegally obtain opioids.
Sample Misdemeanor Forgeries
– In 1991, former New York Times best-selling author Ms. Leonore C. Israel (a.k.a. “Lee” Israel) began manufacturing fake letters from long-dead, famous literary stars, and forging their signatures, which she then sold to certain bookstores for as little as $40. (She was on welfare at the time and desperate to raise money.) She went to incredible lengths to make her letters appear authentic, including purchasing old typewriters of the exact same kind that the forged authors had used. She would also go to the New York Public Library to tear out old parchment pages from books published the same year as the forged letters. Then, using copies of authentic letters from these authors, she would type letters in their unique and recognizable “voice” on the parchment, but would spice up the language with sexual innuendos or witty comments to inflate their market value. If Israel had been prosecuted in California state court, because of the low amount of money she received (less than $950 in 1991), she may have been able to accept a misdemeanor plea for forgery. As it was, however, in June 1993, she pled guilty to a federal felony for transporting stolen goods across state lines (stemming from her train trips to sell her letters) and received six months of house arrest and five years of probation. Melissa McCarthy played her in the 2018 film Can You Ever Forgive Me?
– In the late ‘90s, San Fernando Valley resident Adam Litwin allegedly began impersonating a medical resident (graduate student/doctor-in-training) at the UCLA Medical Center. He allegedly began showing up every day at the hospital to conduct pre-dawn rounds with real surgical residents but, fortunately, took care to never actually provide any medical services to patients. He allegedly parked in the doctor’s parking lot using a stolen pass and even took naps in the residents’ rooms. The jig was up after doctors and residents noticed his unusual laboratory coat and photocopied ID. An investigation was commenced and Litwin was arrested in June 1999 after allegedly attempting to forge a real doctor’s name for prescriptions. In June 2000, he pled guilty to misdemeanor forgery, as well as several other misdemeanors for petty theft and impersonating a physician. The judge sentenced him to sixty days in county jail and half a year of mental-health counseling sessions.
– In December 2014, attorney and La Verne resident Mark Haddon allegedly stole more than $10,000 from a client’s lawsuit settlement funds, which he was able to do by forging the client’s signature on legal papers and lying to the client about the amount of the settlement. Almost four years later, he pled no contest to three misdemeanors: forgery, grand theft, and identity theft. At his sentencing hearing, the judge gave him almost a week in jail, thirty-six months of informal probation, and a restitution order. Haddon was also eventually disbarred.
Defeating a Forgery Prosecution
Proving that you were the individual who executed the forged signature on the legal or financial document may not be as simple and straightforward as it sounds – unless you were contemporaneously filmed signing the document, or there were witnesses to you doing so, the DA’s Office may have to put an expert witness on the stand to testify that based on his or her analysis of your natural handwriting, you must have done the forgery.
If you actually have legitimate grounds to dispute the expert’s assertion, then you, too, will almost certainly have to present evidence from your own expert.
Alternatively, if you are not disputing that you were the one who signed the document at issue in another’s name, then the best defense – if true, of course – is that you actually had legal authority to do so – either implied or actual authority. This is the primary defense the accused forger of Stan Lee, as discussed above, will almost certainly use at his trial.
This lack of authority issue raises another potential defense – namely, that you were unaware that you were lacking it at the time you signed the document. For example, suppose you were the primary caregiver for a senior citizen suffering from dementia, and regularly wrote out small personal checks on behalf of him or her – but all having been done with his or her explicit authorization. So imagine if he or she later replaced you with a new financial custodian but forgot to inform you. In this circumstance, you could then be charged with forgery for any subsequent checks you endorsed.
Arguably, the most difficult element for the DA to prove is that at the time you allegedly signed the legal document, you had the specific intent to steal the victim’s money. Thus, you might be able to counter with credible evidence that you reasonably believed the money you took was owed to you, or that you only intended to borrow the funds temporarily (as opposed to permanently depriving the victim of it).
Sources: California Penal Code 470 P.C. & CALCRIM 1900.
What to Expect If You’re Convicted of Forgery
Your sentence will depend on whether you pled guilty or no contest to, or were convicted at trial, of a misdemeanor or felony forgery. If it’s the former, you’ll serve a maximum of 365 days in jail – assuming, of course, that the judge orders incarceration.
For felonies, you can expect sentences of one-year-and-four months, two years, or three years in a state prison facility.
There are also sentencing enhancements that may apply, such as instances where the forgery involved, say, the loss/theft of millions of dollars, or if you have a criminal record for prior theft and fraud-related convictions.
If you aren’t ordered to prison for a felony, you’ll then likely receive five years’ probation. It’s three years, typically, for misdemeanors.
In many cases, you’ll have to satisfy a victim restitution order as part of your sentencing terms.
For those of you who have professional licenses (federal or state), or who were planning on obtaining one, you should know that forgery is considered to be a crime of moral turpitude that would likely result in your license being terminated or even revoked.
Immigration consequences, if there are any, can be equally serious and result in the commencement of deportation proceedings against you.
Finally, you may have to perform community service and attend some type of counseling.
How We Prefer to Deal with Forgery Cases
In fighting theft/fraud/forgery charges on behalf of our clients, we often use a team approach. If the case is still in the investigation stage, we might work with one of our private investigators to hopefully accumulate evidence that might convince the investigating detective or even the DA’s Office to drop the charges.
Or, if there are licensing or immigration issues, for example, we will work closely with other attorneys to handle those areas as well.
A Sampling of Past Fraud Cases of the Los Angeles Defense Attorney Law Firm:
Foreigner facing felony Workers Comp fraud – prison & deportation – all charges dismissed
People v. G.P.: Our client was a foreigner (permanent resident) living here with his two young kids when he was arrested for and charged with felony Worker’s Comp Insurance Fraud. Thus, he was facing both prison and immediate deportation upon completion of his sentence. Specifically, he was facing five felony counts for WC fraud and attempted perjury. This was a particularly challenging case, particularly because the DA’s Office presented at the preliminary hearing several witnesses who alleged that our client had not actually been present in the location in which he was working at the time of his accident (and where he was injured on the job). However, we put on our own defense witnesses who directly contradicted the testimony of the prosecution’s witnesses. We were also able to impeach the DA’s witnesses with inconsistent statements they had previously made to authorities about the incident. Finally, we met with the prosecutor (after the prelim) and showed him results of a lie-detector test – administered by a highly reputable polygrapher who works closely with law enforcement – that our client had taken which clearly indicated he had been telling the truth about the incident. On the day we announced to the judge that we were ready to proceed with trial, the DA’s Office dismissed the case and our client not only was able to remain with his family in the US, but eventually became an American citizen.