Information on the crime of false financial statements, also called defrauding by presenting false statements, is found at California penal code section 532a. In short, presenting a false writing, which appears to be true have legal significance, with the intent to defraud the person or entity that is presented with the writing, is a crime.

 

The Law
 

532a(1): Any person who knowingly makes or cause to be made, either directly or indirectly, any false statement, in writing, with the intent that the writing will be relied upon, by an unsuspecting person or entity, for the purpose of procuring the payment of cash, a loan or credit, the execution of a contract, the discount of an account receivable, for the benefit of either himself or herself or of that person, firm or corporation, is guilty of defrauding by presenting false statements (Abbrev.).

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For example, presenting a false financial statement to a bank in order to receive a loan is a violation of PC 532a.

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Note: Whether or not the defendant actually defraud another person after presenting a false financial statement is irrelevant to the charge. It is the act of attempting to defraud with false financial statements that qualifies as the criminal act. However, if the defendant is successful in defrauding a person with financial statements then the defendant may be charged with additional theft crimes.

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The Penalties

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PC 532a(1) may be charged as a misdemeanor or as a felony (wobbler). When PC 532a(a) is charged as a misdemeanor, the defendant may face up to six month in the county jail. When PC 532a(a) is charged as a felony, the defendant may face up to 16 months, 2 years, or 3 years in jail.

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Note: if the defendant uses a false social security number, false name, or false business name in relationship to a charge of presenting false financial statements, he or she is will be charged with a felony (no misdemeanor option) and may face up to 3 years in jail if convicted (PC 532a(4)). 

 

Probation Sentence: A probation sentence is period of supervision instead of jail. Probation sentences may be available to defendants convicted of presenting false financial statements depending on the defendant's criminal history and the aggressiousness of the crime (among other factors). Some probation sentences can include a period of manual labor or electronic monitoring (work release and house arrest respectively). Felony probation setences are monitored by a probation officer whereas misdemeanor porbation sentences are monitored by the court.

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PC 1170(h): If the defendant is not granted a probation sentence after a conviction for PC 532a he or she may nevertheless request that his or her sentence be split (served paritlally in jail and partially out of jail on work release), or suspended (not served unless the defendant violates some condition of his or her out of custody sentence. In addition, any jail time that is ordered after a conviction for PC 532a may be served in a local county jail as opposed to a state prison.

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Note: The crime of presenting false financial statements is considered a crime involving moral turpitude, which means the crime involves deceit and carreis special consequences for non United States citizens and persons who hold a professional license (therapist, doctor, dentist, lawyer, teacher, etc.). Also, PC 532a is not a strike offense under California's Three Strikes Law.

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Good Behavior Credits: If the defendant is ordered to serve jail time or work release time after a conviction for PC 532a then the defendant will be entitled to reduce that setnence by up to 50% for good behavior. For example, if a defendant is sentence to 16 months after a felony conviction of presenting false financial statments then he or she will only serve 8 months in jail (so long as the defendant is on his or her good behavior while in jail).

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Bail: The scheduled bail amount for felony charges of PC 532a is $25,000, or the amount defrauded, which ever amount is more [San Bernardino County 2020]. Be aware, that if the alleged victim is actually defrauded due to the defendant's presentation of false financial statments then he or she could be charged wiht additional crimes). 

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In addition the penalties listed above, if found guilty of presenting false financial statements, the defendant could face any of the following punishments: denial of entry into the military, restitution, restraining order, loss the right to possess or own a firearm, fine and fees, and more.

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Defenses to PC 532a

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The most common mistake to a criminal charge of presenting false financial statements is probably mistake of fact. This means that the defendant actually believed in the financial condition as reported to a third party. For example, if a defendant relies on false profit and loss statements (P&Ls) to apply for a business loan, but the defendant is not aware that the P&Ls are in fact inacurrate, then the defendant is not guilty of presenting false false financial statements. This is similar to the defense of insufficient evidence to prove the defendant knew the financial statements were false. Other defenes may apply.

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Note: The defense of statute of limitions, also known as the time period in which a prosecution must be filed, is not generally a good defense in PC 532a cases as the statute of limitations does not typically begin to run in fraud type cases until the fraud is discovered. 

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If you have been arrested or charged with the crime of presenting false financial statements to defraud, or PC 532a(1), contact out criminal defense lawyers today for a free consultation. our criminal defense lawyers are available seven days a week to assist you. Call today!

 

909-913-3138

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