We all know that it is illegal to steal something that belongs to someone else, and doing so can expose a person to significant criminal penalties. However, it is equally illegal to take possession of, or deal in, property that has been stolen.
The California Penal Code section that deals with the receipt of stolen property is section 496, which contains a fairly broad definition of the crime and encompasses more than simply receiving (i.e., taking possession of ) property that has been stolen.
A person violates Penal Code section 496 if they either receive or buy property that has been stolen, or has been obtained by means of extortion. The law is also violated if a person conceals (i.e., hides) assists in concealing, sells, assists in selling, withholds or assists in withholding any property that has been stolen. In order for the statute to be violated, the individual must commit one or more of these acts "knowingly," meaning they must be aware or should have been aware that the property they are involved with is either stolen, or was obtained by extortion.
A violation of Penal Code section 496 can be either a misdemeanor or a felony; a type of crime commonly known as a "wobbler." However, if the value of the stolen property is less than $950.00, the crime can only be charged as a misdemeanor.
Because the definition of the crime encompasses so many different aspects of dealing with stolen property, it is entirely possible, if not likely, that the individual who initially steals or extorts the stolen property will engage in one or more acts that constitute a violation of this law. However, section 496 specifically provides that a person can be convicted of the underlying theft crime or a violation of section 496, but not both.
In addition to the criminal penalties, which will generally involve jail or prison time and probation; anyone who is convicted of receiving stolen property can also be subject, pursuant to section 496, to a civil lawsuit by the victim whose property was stolen or extorted. In that lawsuit, the victim can recover three times the dollar value of the stolen item or items, as well as costs and attorney fees.
The idea that you can be prosecuted for simply taking possession of property, even temporarily, can be frightening; particularly when you have no idea that the property was stolen. Fortunately, the law recognizes that a person may not know that a particular piece of property is stolen, and will not permit prosecution, except in certain circumstances.
Because Penal Code section 496 contains the word "knowingly" in the definition of the crime, which means that a person is not breaking the law if they are not aware that the property was stolen, or was obtained via extortion. For most people, the knowledge requirement is what is known as actual knowledge, which means they must actually be aware that the property was stolen in order to be prosecuted.
The question then becomes, what if that person should have been aware that the property was stolen, and they were either negligently or willfully blind to obvious indications that the property had been stolen? The answer, for most people, is that it really doesn't matter whether or not they should have been aware that property was stolen; so long as they were not actually aware, then they cannot be prosecuted. There are, however, certain classes of people who are required by law to engage in what is known as due diligence (meaning they must make a reasonable inquiry into how the property was obtained if they have reason to suspect that it may be stolen.) If a person is within this class of individuals and they fail to make a reasonable inquiry, or take possession of the property despite an inquiry that shows the property was likely stolen; they can be prosecuted even if they did not actually know that the property was stolen. Under Section 496, due diligence is required of swap meet vendors, pawn brokers and individuals engaged in similar businesses.
Swap Meet Vendors and Pawn Brokers:
Because swap meet vendors, pawn brokers and similar businesses tend to obtain their merchandise from individuals on an ad-hoc basis, rather than from other established businesses; they are an easy and accessible means of selling stolen property. Penal Code section 496 recognizes this and requires them to conduct due diligence before receiving any property from someone else. Failing to do so, or taking possession despite of it; can subject them to misdemeanor or felony charges for receiving stolen property.
Specifically, the Penal Code imposes a due diligence requirement on swap meet vendors (as they are defined in Business and Professions Code section 21661,) and anyone whose primary business is collecting or dealing in personal property or merchandise, as well as anyone who works for such a person. By that definition, virtually any type of store is included; everything from a mom-and-pop souvenir shop to a Wal-Mart. In fact, every such type of store is covered by the statute. However, most types of stores receive their merchandise from trusted sources; primarily other businesses with whom they have a prior relationship. As such, it is the rare case where one of these types of stores will have reason to suspect that the merchandise they are receiving is stolen.
Pawn shops, and similar businesses are somewhat different in that they receive the bulk of their merchandise from individuals who come to them ad-hoc, and are looking to sell or pawn one or more items on a one-time basis, rather than a repeating course of conduct. Because of that, the due diligence requirement tends to apply to them more so than other types of stores.
So, what exactly is due diligence? Under section 496, when a person required to perform due diligence receives or buys property under circumstances that should cause them to be suspicious as to whether the property was stolen, they have the obligation to make a reasonable inquiry before taking possession of the property. If they fail to do so, they can be prosecuted for receiving stolen property. If they make that reasonable inquiry, and the result of that inquiry is that the property either is or is likely to be stolen, they must refuse to take possession of it. if they take possession of the property anyway, they can be prosecuted.
Examples of Receiving Stolen Property:
- Marcus was sitting on his couch at home one day, minding his own business, when his friend Tyler rang his door bell. After letting him in, Tyler told Marcus that he need him to hold onto the laptop computer that he bought with him. Marcus noticed that it was a fairly new, and very expensive model which caused him to wonder how Tyler got it, since Tyler has never had very much money. Marcus was also curious as to why Tyler needed him to hold onto it. When asked, Tyler came clean and told Marcus that he had taken it from his roommate because the roommate was not paying his rent, so Tyler stole the laptop in order to sell and make the rent payment. Marcus told him that he was not comfortable holding onto the laptop because it was stolen, but nevertheless agreed to do so. A few days later, two police officers showed up at Marcus's house. It turns out that when police officers were taking a stolen property report from Tyler's roommate, they saw him acting suspiciously, and interrogated him. Tyler instantly folded and confessed, telling the officers where the laptop was. Marcus was then arrested and charged with receiving stolen property.
- Evelyn has a habit of making friends with people who get into trouble. It seems as though every other week, one of her friends is doing something they should not. This week it was her friend Barry, who makes no attempts to hide how much he loves crystal meth. One day, Barry comes over to Evelyn's apartment with a small diamond bracelet, telling her that it's a gift for his girlfriend, and he needs her to hold onto it until its time to give it to her. Evelyn seriously doubts that Barry is telling her the truth; he is not the type of guy to buy his girlfriend a diamond bracelet, even a small one. She suspects that he stole the bracelet and is going to sell it to buy drugs. She even asks him if the bracelet is stolen. Barry then gives her a very unconvincing denial. While she suspects the bracelet is stolen, she does not actually known if it is or not. Reluctantly, she agrees to hold onto the bracelet for a few days. Later that same day, Barry comes back, this time in handcuffs and accompanied by two police officers. The officers instruct Evelyn to give them the bracelet, which she does. Fortunately for her, Barry told the officers that he lied to Evelyn about the bracelet being stolen, and that she didn't know. The officers believe Barry, and Evelyn is not arrested for, or charged with, receiving stolen property because she did not actually know that it was stolen.
- Bruce is a swap meet vendor. Typically, he sells vintage, vinyl records and record players, but sometimes will peddle other wares that he either finds at garage sales or buys from eBay or Craigslist. If someone comes to his stall at the swap meet with vintage records for sale, he will often buy them if he thinks that he can resell them for a profit. One day, a guy that Bruce has seen a few times before, always with something different to sell; comes to his stall with a box full of vintage records, looking to sell them. Looking through the box, Bruce sees a number of very valuable records mixed in with some fairly worthless ones. Bruce has always suspected that the guy uses the swap meet to sell stolen goods, but was not certain. Based on his knowledge of the market for vintage records, Bruce thinks he can sell the valuable ones for as much as $700.00, and maybe $50.00 for the rest. When the guy says he only wants $100.00 for the whole box, Bruce doesn't hesitate and does not bother to inquire. He hands the guy $100.00 and takes the box. A few weeks later, the police show up to Bruce's stall. The guy had been arrested for burglary, and pointed the police to where he had sold the box of records he had previously stolen. When the police ask Bruce whether he suspected the records were stolen, Bruce responded that he thought it was a possibility, but that he wasn't sure. The police then asked Bruce whether he had inquired as to where the guy got the records, and Bruce admitted that he had not. Bruce was then charged with misdemeanor receipt of stolen property.
- Tammy is a pawn broker who operates a small shop in a nice part of town. She has been running the shop for many years, and instituted a number of policies aimed at making her work more streamlined. One of those policies is to have everyone who sells or pawns an item with her to sign a document that states the item belongs to them, and is not stolen. She does this instead of taking the time to inquire with anyone as to how they got the item they are selling, and if they are the legal owner. Tammy finds that this is much easier, and avoids any awkward situations. She did not consult with a lawyer before instituting the policy. One day a couple of detectives show up to her shop with a search warrant. In the course of searching the shop, the detectives find a number of stolen items. Tammy tells the officers that she not worried because she has signed documents for each item, signed by the person that sold them; stating that they were the owner and the item was not stolen. Tammy is then arrested and charged with multiple counts of receiving stolen property. Her court-appointed lawyer then informs her that she was under an obligation to make reasonable inquiries whenever she had reason to suspect that an item was stolen, and simply having the seller sign a document was not compliant with the law. Fortunately for Tammy, each of the stolen items was worth less than $950.00, and because each was purchased on a separate occasion, they cannot be aggregated to meet the threshold for a felony charge. Instead, each of the charges she faces is for a misdemeanor.
How Does a Prosecutor Prove Receiving Stolen Property:
The elements a prosecutor must prove to convict on a charge of receiving stolen property are:
(1) The defendant either received, sold or concealed (or assisted in one of those acts) property that was stolen; and
(2) The defendant was actually aware that the property was stolen at the time they bought, sold, concealed or assisted in buying, selling or concealing; or
(3) The defendant was a swap meet vendor, pawn broker or was in the business of collecting or dealing in personal property or merchandise (or worked in such a business) and had a reason to believe that the property may be stolen, but did not make a reasonable inquiry with the seller.
Receiving stolen property can be either a felony or a misdemeanor. However, if the value of the stolen property is less than $950.00 the prosecutor can only pursue misdemeanor charges.
Misdemeanor receiving stolen property will trigger the following penalties:
(1) 3 years’ Summary probation; and/or
(2) Up to one year in county jail; and/or
Felony receiving stolen property will carry the following penalties:
(1) 5 years’ formal probation; and/or
(2) Up to 16 months, 2 years or 3 years in county jail or state prison.
In addition to criminal penalties, anyone convicted of receiving stolen property can be sued by the property owner for three times the value of the stolen property, as well as an award of costs and attorney fees.
Lack of Knowledge:
A defendant can argue that they were not actually aware that the property was stolen, even if they suspected that is might be but were not sure. Swap meet vendors, pawn brokers and individuals operating or working in similar businesses, however, are precluded from making this argument and must conduct a reasonable inquiry.
Swap meet vendors, pawn brokers and individuals operating or working in similar businesses are required to make a reasonable inquiry into a seller's right to sell a particular item of personal property. If they do so, and do not learn in the course of that inquiry that the property was stolen, they can defend against a charge of receiving stolen property on that basis.
Intent to Return:
If a person receives property that they know to be stolen, but receive it only for purposes of returning it to the rightful owner, then they can use that fact as an affirmative defense against a charge. This may be difficult to prove, especially if the defendant is caught immediately after receiving the stolen property. In such a case, an experienced criminal attorney will likely be the best chance of successfully presenting the defense.
Claim of Right to Ownership:
If a person believes that they are the owner of a particular item of personal property, which they believe was stolen from them; it is not a violation of Penal Code section 496 to take possession of it because they believed that they were the rightful owner, and because of that; the property was not stolen, but rather was being returned to its rightful owner.
Multiples Item received at One Time:
If a defendant knowingly receives multiple stolen items at one time,that constitutes only one count of receiving stolen property. While not really a defense, in certain cases it can be critical to avoiding significantly greater penalties. In particular, when a defendant receives multiple items, each of which has a value in excess of $950.00, they can, at most, be charged with a single felony count of receiving stolen property. It can also be helpful in cases where the aggregate value of multiple items is less than $950.00. In such a case, the defendant can only face a single misdemeanor charge. However, in cases where the aggregate value of multiple items exceeds $950.00, the defendant may face a felony charge, even if the individual value of each item is less than $950.00.
Tony was a care-taker for an elderly gentleman who lived on a large rural property. The elder asked Tony if Tony would sell some of the items the gentleman had collected over his many years so that the elder could gain funds for refurbishing the property. Tony sold some of the items, had some of the items still in his possession, and gave the proceeds of the sale to the complaining witness after taking out the fee that the elder had promised Tony. Later, since he was suffering from memory loss, the elder forgot that he had given Tony the property and made accusations of theft and receiving stolen property. After doing extensive investigation and uncovering a number of witnesses who the elder had either swindled or falsely accused of theft and presenting the evidence to the district attorney I was able to convince the D.A. to dismiss the charges against Tony. Tony was incredibly relieved to have the charges dismissed.
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