Q: If a check was written out to me in order to deposit into my acct to then pay a customer but I spend it by mistake
I’m a 1099 contractor who subcontracted work for a client. Client took out a larger than needed loan through subcontractor in order to get some of the loan back in cash. However the subcontractor wrote the clients cash portion out in my name on a check for me to deposit and then to pay client but I spent the money once is cleared in my account by mistake. Now client is demanding his cash back from the subcontractor which is in the amount of $18k. Legally what charges can be filed against me?
A:
Based on the situation described, you could potentially face civil liability or criminal charges:
Civil Liability:
- Breach of contract - The client could sue you for failing to fulfill your obligation to pay over the funds as agreed. They would likely seek recovery of the $18k you were supposed to pay the client.
- Conversion - Misappropriating another's money for an unauthorized use can constitute conversion under California tort law. You could be liable for damages.
Criminal Charges:
- Theft - California Penal Code 484 defines theft broadly to include stealing or defrauding people of money via false pretenses. Spending money that was entrusted to you for another purpose could potentially implicate theft statutes. This could be filed as a misdemeanor or felony depending on the amount at issue.
- Fraud - Given the questionable loan situation, you could potentially face fraud charges as well from either state or federal prosecutors related to the overall scheme.
In summary - both civil liability and criminal prosecution are significant risks given the situation. You should consult with both a civil litigation and criminal defense attorney immediately to understand your options and develop an appropriate response strategy. The facts suggest potential exposure given your admitted mishandling of money that was not yours to spend.
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