blog home Financial Crimes How Embezzlement Differs from Theft Under California Law

How Embezzlement Differs from Theft Under California Law

By Los Angeles Criminal Defense Attorney on December 10, 2025

When the circumstances of a theft involve a breach of trust, the charges may rise to the level of embezzlement. While both theft and embezzlement involve the unlawful taking of property, they are distinct crimes with different elements, penalties, and legal defense strategies.

The experienced Los Angeles white collar attorneys at Werksman Jackson & Quinn LLP have successfully represented high-profile clients across California. We know how these charges are designed, and we know how to counter them effectively.

What Is Theft Under California Law?

Theft, also known as larceny, is defined broadly under California Penal Code Sections 484 and 488. At its core, theft occurs when a person unlawfully takes someone else’s property with the intent to permanently deprive the owner of it.

There are multiple forms of theft in California, including:

• Petty theft: When the value of the property taken is $950 or less.
• Grand theft: Involves property over $950, certain items regardless of value (like firearms), or theft directly from a person.
• Theft by false pretenses, trick, or fraud: Where the victim is deceived into giving up their property.

What all theft charges have in common is this: the accused allegedly had no legal right or authority to take the item in the first place.

What Is Embezzlement?

Embezzlement is a separate offense under California Penal Code 503. It’s defined as the fraudulent appropriation of property by a person to whom it has been entrusted. This is a key distinction. In an embezzlement case, the alleged offender usually has a trusted relationship with the owner, often as an employee, manager, accountant, or other fiduciary role.

Examples of embezzlement include:

• An employee stealing money from a cash register.
• A bookkeeper diverting company funds into their personal account.
• A nonprofit treasurer using donations for personal expenses.

The unique element here is misappropriation; using entrusted property in a fraudulent or unauthorized way.

Embezzlement vs. Theft: Key Differences

• Possession
  • Theft: The person had no legal right to possess the property.
  • Embezzlement: The person was lawfully entrusted with the property.
• Intent
  • Theft: The intent was to permanently deprive the owner of their property.
  • Embezzlement: The intent was to misuse or convert the property for personal benefit.
• Relationship
  • Theft: No relationship of trust is required between the parties.
  • Embezzlement: Typically involves a position of trust or authority (e.g., employer-employee).
• Example
  • Theft: Shoplifting items from a retail store.
  • Embezzlement: An employee siphoning company funds from a payroll account.

Why Does the Difference Matter?

The classification of a crime as theft versus embezzlement can significantly impact the outcome of a case, including:

• How prosecutors charge the offense
• What evidence they focus on
• How the jury interprets your actions
• The potential penalties at sentencing

Embezzlement cases are often viewed more seriously than basic theft because they involve a breach of trust. This can influence the judge’s discretion at sentencing, even if the dollar amount taken is relatively small.

Additionally, white-collar crime definitions often place embezzlement in the same category as fraud, bribery, and insider trading. These charges can carry reputational consequences far beyond the courtroom.

Employee Theft vs Embezzlement

Employee theft can involve a wide range of conduct, from taking office supplies to falsifying invoices. If the employee simply stole something without being granted control over it (e.g., grabbing from the supply closet), it may be charged as theft.

When the employee was entrusted with the property and they used that position to take money or assets, the crime escalates to embezzlement.

What the Prosecution Must Prove in Embezzlement Cases

To secure a conviction under Penal Code 503, the prosecution must prove:

1. The owner entrusted the defendant with their property.
2. The defendant fraudulently used or took that property for their own benefit.
3. The defendant intended to deprive the owner of the use of that property, even temporarily.

Importantly, the prosecution must show that the act was intentional and deceptive, not an honest mistake, clerical error, or misunderstanding.

Legal Defense Against Embezzlement Charges

Lack of Intent

If the accused believed they had the right to use the funds, or if the use was temporary and intended for a legitimate purpose, the element of fraudulent intent may not be satisfied.

Mistake or Misunderstanding

In complex organizations, employees are often unclear about financial processes. Misallocating funds without understanding policy doesn’t automatically constitute embezzlement.

Consent

If the accused had permission from the owner to use the property or funds in a certain way, this may undermine the claim of misappropriation. This permission can either be explicit or implied.

Insufficient Evidence

Embezzlement requires a clear paper trail or documentation. Ambiguities in records or unclear transaction histories can weaken the prosecution’s case.

How Werksman Jackson & Quinn LLP Approaches These Cases

Our defense strategies focus on dismantling the prosecution’s narrative from the outset.

In these cases we may:

• Challenge whether entrustment was properly established.
• Examine the intent behind the financial decision.
• Uncover procedural errors in internal investigations or audits.
• Engage forensic accounting experts when necessary.
• File pretrial motions to suppress improper evidence or dismiss unsupported charges.

Don’t Wait to Take Action If You’ve Been Accused

If you’ve been accused of embezzlement, employee theft, or another white-collar offense, you don’t want to wait. Early intervention from an experienced attorney can determine whether you face felony charges or walk away with your freedom and career intact.

At Werksman Jackson & Quinn LLP, our attorneys include former prosecutors with decades of courtroom experience, and we’re known throughout California for defending clients in high-profile criminal cases.

Speak With a Trusted White Collar Defense Lawyer in Los Angeles

Don’t let a misunderstanding or internal accusation ruin your future. Whether you’re under investigation or you have already been charged, contact our team legal today.

Call (213) 688-0460 for your free consultation to see how we can protect your future.