HF4900

Purpose

• Create a new standalone crime called theft of public funds. The bill adds a new section (609.5523) to Minnesota law to criminalize certain actions involving money held or administered by government entities or programs funded with public funds.

What the bill covers (Main Provisions)

• Defines who and what is covered:
  • A government entity and “public funds” include money from all funds held or managed by a government entity, regardless of source or purpose.
  • The crime can involve public funds directly from a government entity or from a third party administering a program funded by public funds.
• What counts as theft:
  • Intentionally and without claim of right, taking, using, transferring, concealing, or retaining possession of public funds with the intent to permanently deprive the government entity.
  • Obtaining possession of public funds from a government entity or third party by knowingly making a false representation with the intent to defraud.
• False representations:
  • Includes, but is not limited to, promises not to perform and falsified claims (such as reimbursement requests, rate applications, or cost reports) that misstate costs or services provided.
  • The law clarifies that merely failing to perform isn’t evidence of intent unless supported by other substantial evidence.
• How the crime may be proven:
  • The offender can be charged if they defraud the government entity or a third party administering a program funded by public funds through deception or false representations.

Penalties and sentencing (Key consequences)

• Penalties depend on the value of the property or funds stolen:
  • More than $35,000: up to 24 years in prison and/or a fine up to $100,000.
  • More than $5,000 up to and including $35,000: up to 12 years and/or a fine up to $20,000.
  • More than $1,000 up to and including $5,000: up to 6 years and/or a fine up to $10,000.
• Aggregation rule:
  • In prosecutions, the value of money or property received within a six-month period may be added together (aggregated) to determine which penalty tier applies.

How it changes existing law

• Adds a new standalone offense specifically for theft of public funds (as a new section, 609.5523).
• Clearly defines “public funds” and “government entity” for the purpose of this offense.
• Introduces a three-tier penalty structure based on amount stolen.
• Allows aggregation of funds received over a six-month window to reach a higher penalty tier.
• Covers theft involving both direct public funds and funds handled by third-party administrators of public programs.

Practical impact

• Provides explicit criminal liability for a broad range of schemes involving public funds, including deceptive billing, fraudulently obtained reimbursements, and other misrepresentations that deprive government entities of money.
• Signals heightened criminal accountability for large or repeated offenses involving public money.

Relevant Terms - theft of public funds - public funds - government entity - third party administering a program funded by public funds - intentionally and without claim of right - false representation - defraud - swindling - deprivation (permanent) - aggregation (six-month period) - imprisonment - fine - value thresholds: $1,000; $5,000; $35,000 - Minnesota Statutes chapter 609 - new section 609.5523