Misapplication of entrusted property

HOW IS MISAPPLICATION OF ENTRUSTED FUNDS DEFINED IN PENNSYLVANIA?
Section 4113 of the Crimes Code applies under these circumstances:

• The disposition of property entrusted to a person as a “fiduciary”;
• The disposition of property of the government;
• The disposition of property of a financial institution.

It’s a crime when one “applies or disposes” of property under these circumstance “in a manner which he knows is unlawful and involves substantial risk of loss or detriment to the owner of the property or to a person for whose benefit the property was entrusted.”

HOW SERIOUS IS THIS CRIME?
Generally, misapplication of entrusted funds is graded as a third-degree misdemeanor unless the amount involved exceeds $50, which in that case it’s graded as a second-degree misdemeanor.

WHAT ARE THE DEFENSES TO THIS CRIME?
Generally speaking “ignorance of the law” (or mistake of law) is not a defense. However, in light of the statutory language of Section 4113, requiring the prosecution to prove beyond a reasonable doubt that the accused applied or disposed of property “in a manner which he knows is unlawful,” this crime is one of the rare cases where a mistake-of-law defense may apply.

WHAT IS THE STATUTE OF LIMITATIONS?
A prosecution for misapplication of entrusted funds must be commenced within two years after it is committed.