Embezzlement cases can involve different types of relationships, not just business-employee relationships. Under Penal Code § 503, embezzlement is “the fraudulent appropriation of property by a person to whom it has been intrusted.”
Therefore, whenever a fiduciary/trust relationship exists, and funds are misused for personal gain, there may be grounds for an embezzlement case.
So, what is a fiduciary relationship?
Legal obligation
A fiduciary is a person or entity with a legal obligation to act in the best interest of another. A breach of this duty can lead to legal consequences.
Examples of fiduciary relationships include:
- Trustee/executor and beneficiaries – A trustee has a fiduciary duty to manage assets according to the trust and in the beneficiaries’ best interests. An executor has a fiduciary duty to the estate and its beneficiaries.
- Financial professional and client – Financial professionals, such as financial advisors, are legally bound to act in a client’s best interest.
- Attorney and client – Attorneys have a duty of diligence, confidentiality, communication, disclosure and competence, and to avoid conflicts of interest.
- Real estate agent/broker and client- A real estate agent or broker can’t misuse a client’s escrow funds, fail to reconcile real estate trust funds or fail to disclose all known material facts.
- Corporate officers/directors and shareholders – Corporate officers/directors must act in good faith on behalf of the corporation and its shareholders.
- Business partners – If a business partner fails to act in the best interest of the business, for instance, steals company money, they can face an embezzlement charge
These are a few examples of fiduciaries in California. The nature of a relationship or interactions can establish whether you have a fiduciary duty to another.
Being in a fiduciary relationship can be sensitive. One mistake can land you in trouble. If you are facing an embezzlement charge, get as much information as possible to determine the next steps to take.
