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Misappropriation

Theft is a crime characterized by the unlawful taking of another person’s money or property without authorization and there are many different types of crimes that can be prosecuted as federal theft, including misappropriation. Misappropriation is a type of white-collar crime associated with the theft and/or misuse of funds, assets or trade secrets, and when someone commits the crime of misappropriation, they take funds, assets or trade secrets that don’t belong to them without permission and use them for their own purposes. If you have been accused of misappropriating funds, trade secrets or assets in violation of federal law, your first course of action should be to enlist the help of a trial-tested criminal defense attorney with experience in federal court. Contact Federal Criminal Defense Pro as soon as possible to find out how we can help with your case.

Knowledgeable Federal Misappropriation Lawyer

Financially-motivated theft crimes like misappropriation are associated with dishonesty, deception and corruption and these types of offenses are therefore taken extremely seriously by the court. For years, our federal defense lawyers at Federal Criminal Defense Pro have fought for the rights of those accused of criminal offenses in California and across the United States, and we know what it takes to hold the prosecution to its burden of proof and win a criminal misappropriation case. As a former prosecutor, attorney Daniel R. Perlman is intimately familiar with the strategies and tactics prosecutors use in a criminal case to get a conviction and he relies on his extensive experience and insight to get the best possible results for his clients. At Federal Criminal Defense Pro, our attorneys understand how overwhelming and life-altering a criminal conviction would be for you and your family, and we can confidently represent you at any stage of your criminal case. Whether you have received a target letter from the federal government, you have been formally charged with the crime in federal court, or you are about to face trial or sentencing, it is never too early or too late to protect your rights.

Misappropriation Defined

In criminal law, misappropriation is a general term used to describe the unlawful act of knowingly and intentionally using another person’s funds or property for your own use or for some other unauthorized purpose. Misappropriation is a type of theft crime carried out by individuals who have access to funds, assets or company data, but not ownership of these things. The most common types of criminal misappropriation that can result in federal charges are as follows.

Misappropriation of Funds

Misappropriation of funds is a type of theft occurring when a person deliberately and illegally uses another person’s money without authorization. Misappropriation of funds is similar to embezzlement, which is a theft crime committed when a person with a relationship of trust or fiduciary duty to another person steals that person’s money or property for his or her own personal gain. It is possible for a person to be charged with both embezzlement and misappropriation. For example, a business executive accused of stealing funds that were entrusted to him by his company or a client and using the funds to pay for his or her own personal travel expenses or to pay off his or her gambling debts can face charges of both embezzlement and misappropriation.

Trade Secret Misappropriation

Trade secret misappropriation is the unlawful act of acquiring by improper means (i.e. bribery, theft, fraud or violation of a contractual obligation to keep something confidential) a trade secret, which is a type of intellectual property or confidential company information that is generally not known outside of the company and that provides the company with an economic advantage over competitors. For instance, if you bring home confidential business information from work in violation of your employment contract, you could face trade secret misappropriation charges. You can also be accused of misappropriation if you publish a trade secret knowing that it was acquired through improper means.

In addition to criminal prosecution, federal law also provides for a civil cause of action for trade secret misappropriation under 18 U.S. Code § 1836(b)(1). Until recently, civil claims addressing trade secret misappropriation were governed exclusively by state laws and were handled in state court. In 2016, however, Congress passed the Defend Trade Secrets Act, which gives owners of trade secrets the right to sue in federal court in cases where their trade secrets have been misappropriated, so long as the trade secret “is related to a product or service used in, or intended for use in, interstate or foreign commerce.”

Misappropriation of Assets

Misappropriation of assets occurs when an employee or third party uses deceit to steal or misuse assets belonging to an organization or entity, such as equipment or inventory, for his or her own personal benefit. Misappropriation of assets can align with misappropriation of funds if the stolen asset is cash, or trade secret misappropriation if the stolen asset is company data or intellectual property.

What Makes Misappropriation a Federal Crime?

Many cases involving misappropriation are prosecuted at the state level, but there are some instances in which misappropriation charges can be brought in federal court. For instance, if the funds or property that you are accused of misappropriating belonged to the federal government, you could face federal criminal charges, or if the misappropriation offense crossed state lines or involved the use of the internet (internet crimes), the offense can also be charged and tried at the federal level.

Criminal Penalties for Misappropriation

There are laws at both the state and federal level that criminalize misappropriation and the criminal penalties you could face for a misappropriation conviction depends on the nature of the crime. For instance, the main federal law that prohibits the theft of trade secrets is 18 U.S. Code § 1832. This law makes it a federal crime for any person to “with intent to convert a trade secret, that is related to a product or service used in or intended for use in interstate or foreign commerce, to the economic benefit of anyone other than the owner thereof, and intending or knowing that the offense will injure any owner of that trade secret, knowingly—

(1) steal, or without authorization appropriate, take, carry away, or conceal, or by fraud, artifice, or deception obtain such information;

(2) without authorization copy, duplicate, sketch, draw, photograph, download, upload, alter, destroy, photocopy, replicate, transmit, deliver, send, mail, communicate, or convey such information;

(3) receive, buy, or possess such information, knowing the same to have been stolen or appropriated, obtained, or converted without authorization;

(4) attempt to commit any offense described in paragraphs (1) through (3); or

(5) conspire with one or more other persons to commit any offense described in paragraphs (1) through (3), and one or more of such persons do any act to effect the object of the conspiracy.”

Under this law, the theft of trade secrets is punishable by a prison sentence of up to 10 years, and if an organization commits the crime, the organization can be fined up to $5 million, or three times the value of the stolen trade secret. Furthermore, any person accused of committing this crime “intending or knowing that the offense will benefit any foreign government, foreign instrumentality, or foreign agent,” is subject to a sentence of up to 15 years in prison, and any organization accused of committing the crime can be fined up to $10 million, or three times the value of the stolen trade secret, under 18 U.S. Code § 1831 (economic espionage). In addition to serving time in prison and paying significant fines, there are other adverse consequences you could be subjected to for a trade secret misappropriation conviction. For instance, the federal government can seize any proceeds derived from the alleged criminal act, as well as any property you allegedly used to commit the crime.

Defending Against Criminal Charges of Misappropriation

One of the most frequently prosecuted misappropriation crimes is a misappropriation of funds. In many cases, the crime of misappropriating funds is committed by a public official, an executor of an estate, or a trustee of a trust, but virtually any person with access to another person’s money can be charged with misappropriating funds if that person uses the money for his or her own personal use or for another unauthorized purpose. Misappropriation is a serious offense, but it’s not always easy for the government to prove such a crime. In any criminal case, the defendant is legally presumed innocent until proven guilty and the prosecution bears the burden of proving the crime beyond a reasonable doubt. If you have been charged with the crime of misappropriation and your attorney can put forth a defense that raises a reasonable doubt as to your guilt, you cannot lawfully be convicted of the crime. For instance, in order to get a conviction for misappropriation of funds in federal court, the government must prove the following elements of the crime beyond a reasonable doubt:

  • You had access to the funds, but not ownership of them;
  • You knowingly and intentionally took the money or intended to take the money; and
  • You used the money for your own purposes or intended to use the money for your own purposes, which can include transferring the money to another bank account.

Defense Strategies for Misappropriation Charges

Facing charges for a criminal offense can be stressful, frightening and intimidating, especially when you are up against the power of the federal government. However, just because you have been accused of misappropriation does not mean you will automatically be found guilty of the crime. There are several defense strategies an experienced federal criminal defense attorney can use to challenge the prosecution’s case and protect you against misappropriation charges. For instance, if you are facing charges for misappropriation of funds in federal court, your attorney may be able to argue that:

  • You did not intent to misappropriate the funds
  • You were given consent by the owner to remove the funds
  • You had a reasonable and good faith belief that you had ownership over the funds
  • The prosecution’s evidence was obtained as a result of an illegal search
  • The prosecution doesn’t have enough evidence to prove the crime of misappropriation beyond a reasonable doubt
  • You committed the crime under duress
  • You were the victim of entrapment
  • You have been wrongfully accused
  • You are the victim of mistaken identity

The intent is a critical component of white-collar crimes like misappropriation, and if your attorney can show that you did not intend to misappropriate the funds, assets or trade secrets in question, you may be able to secure an acquittal at trial.

How Our Federal Misappropriation Defense Attorneys Can Help

A criminal conviction for misappropriation can result in a lengthy prison sentence and millions of dollars in fines, among other devastating potential penalties, and the last thing you want to do is leave your future and financial well-being in the hands of an inexperienced attorney. When you hire our misappropriation defense lawyers at Federal Criminal Defense Pro, you can rest assured that your case is being handled by a legal team that specializes in federal criminal defense. Our misappropriation defense lawyers are committed to providing quality, personalized legal representation and when you retain our services, we will carefully evaluate the facts of your case and determine the best strategy for moving forward based on your specific circumstances.

Consult Our Experts at Federal Criminal Defense Pro Today

Misappropriation is a major federal crime that carries devastating potential penalties upon conviction and any person charged with the crime of misappropriation in federal court needs to consult a knowledgeable criminal defense lawyer as soon as possible. Whether you are under investigation for misappropriation or you have been formally charged with the offense, having a reputable defense lawyer review your case and represent you in court is your best option for ensuring that your rights and best interests are protected. You can be sure that the federal government is hard at work building the strongest possible case against you, and you need a trusted legal advocate working just as hard to develop a credible and compelling defense on your behalf. Contact our firm today to schedule a free consultation with our skilled federal misappropriation defense team.

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Our Clients Say

“About 3 years ago, I was in need of legal help. I was recommended to a different firm initially, but during my consultation realized I was being lied too so that with a sense of urgency, I would retain theyer services.  I left and did my own research and found Daniel Perlman. I decided to meet with him, who immediatly struck me as someone how knew what he was talking about.  He laid out all the different options for proceeding, and after defending me for about 4 months, got me the best possible outcome for my case.  Hes not the cheapest attorney, but being a small business owner, I understand that you get what you pay for, and with this firm, its money well spent.  I highly recommend his services and hope I never need them again.” – Rhett B.

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