However, can I ask the person provide me money in exchange that I am
not going to call police?
First of all, the conduct you describe is a tort, in addition to possibly being a crime, and so you could ask them to provide you with money in exchange for a release from tort liability (i.e. not suing them). This is done all of the time and is perfectly legal, although if one is afraid of extortion claims, the safer course would be to file the lawsuit first (and possibly also report the crime to the police first) and then to seek money damages. Once a criminal complaint has been filed and an accusation made publicly, there is no "extortion" element.
A lawyer would not be permitted as a matter of professional ethics from proposing a settlement in exchange for not contacting the police, but could obtain money with a threat of civil liability.
This is not obviously within the definition of extortion, because reporting them for committing an actual crime would not necessarily be "wrongful" conduct in every situation, and wrongful use of "fear" is one of the elements of the California crime for extortion. But, it is clearly within the definition of "fear" which is defined to mean:
Fear, such as will constitute extortion, may be induced by a threat of
any of the following:
To do an unlawful injury to the person or property of the individual threatened or of a third person.
To accuse the individual threatened, or a relative of his or her, or a member of his or her family, of a crime.
To expose, or to impute to him, her, or them a deformity, disgrace, or crime.
To expose a secret affecting him, her, or them.
To report his, her, or their immigration status or suspected immigration status.
This definition makes no reference to the validity of the accusation.
It might be possible to determine with more case law research when threatening to report a crime that they have committed is "wrongful use" of "fear".
My expectation is that this is something of a gray area and may be quite fact specific (it is not a point upon which there is great uniformity between U.S. states).
This excerpt from a California Supreme Court decision helps clarify the line between a legitimate threat and an extortionate one (case law citations and references omitted), and tends to suggest that insisting on money, hinging on a threat that the a criminal complaint will be made otherwise, does constitute extortion in the State of California, even when made by the victim in the case of a crime that was actually committed:
“Extortion is the obtaining of property from another, with his consent
... induced by a wrongful use of force or fear....” (Pen.Code, § 518.)
Fear, for purposes of extortion “may be induced by a threat, either:
[¶] ... [¶] 2. To accuse the individual threatened ... of any crime;
or, [¶] 3. To expose, or impute to him ... any deformity, disgrace or
crime[.]” (Pen.Code, § 519.) “Every person who, with intent to extort
any money or other property from another, sends or delivers to any
person any letter or other writing, whether subscribed or not,
expressing or implying, or adapted to imply, any threat such as is
specified in Section 519, is punishable in the same manner as if such money or property were actually obtained by means of such
threat.” (Pen.Code, § 523.)
Extortion has been characterized as a paradoxical crime in that it
criminalizes the making of threats that, in and of themselves,
may not be illegal. “[I]n many blackmail cases the threat is to do
something in itself perfectly legal, but that threat nevertheless
becomes illegal when coupled with a demand for money.”
The extortion statutes “all adopted at the same time and relating to
the same subject matter, clearly indicate that the legislature in
denouncing the wrongful use of fear as a means of obtaining property
from another had in mind threats to do the acts specified in section
519, the making of which for the purpose stated is declared to be a
wrongful use of fear induced thereby.” “It is the means employed [to
obtain the property of another] which the law denounces, and though
the purpose may be to collect a just indebtedness arising from and
created by the criminal act for which the threat is to prosecute the
wrongdoer, it is nevertheless within the statutory inhibition. The law
does not contemplate the use of criminal process as a means of
collecting a debt.” In Beggs “we explained that because of the
strong public policy militating against self-help by force or fear,
courts will not recognize a good faith defense to the satisfaction of
a debt when accomplished by the use of force or fear”; For purposes of
extortion “[i]t is immaterial that the money which petitioner sought
to obtain through threats may have been justly due him”; “The law of
California was established in 1918 that belief that the victim owes a
debt is not a defense to the crime of extortion”.
Moreover, threats to do the acts that constitute extortion under Penal
Code section 519 are extortionate whether or not the victim committed
the crime or indiscretion upon which the threat is based and whether
or not the person making the threat could have reported the victim to
the authorities or arrested the victim. Furthermore, the crime with
which the extortionist threatens his or her victim need not be a
specific crime. “[T]he accusations need only be such as to put the
intended victim of the extortion in fear of being accused of some
crime. The more vague and general the terms of the accusation the
better it would subserve the purpose of the accuser in magnifying the
fears of his victim, and the better also it would serve to protect him
in the event of the failure to accomplish his extortion and of a
prosecution for his attempted crime.”
Attorneys are not exempt from these principles in their professional
conduct. Indeed, the Rules of Professional Conduct specifically
prohibit attorneys from “threaten[ing] to present criminal,
administration, or disciplinary charges to obtain an advantage in a
civil dispute.” (Cal. Rules of Prof. Conduct, rule 5–100(A).)
In Libarian v. State Bar we upheld disciplinary action against
Librarian who, after losing at trial, sent a letter to opposing
counsel, accusing his opponent's client of perjury and threatening to
use the perjury charge as the basis of a new trial motion and a
criminal complaint unless opposing counsel's client paid Librarian's
client. “Although no action was taken either by Librarian or Siegel to
prosecute Nadel, the record clearly shows conduct which is in
violation of Librarian's oath and duties as an attorney. The
threats contained in the letter indicate an attempt to commit
extortion. The sending of a threatening letter with intent to extort
money is ‘punishable in the same manner as if such money ... were
actually obtained’ (Pen.Code, § 523) and the crime of extortion
involves moral turpitude.” The conduct of an attorney who threatened
an oil company with reporting adulteration of its gasoline to the
prosecutor unless it paid his clients was not only grounds for
disbarment but “constituted an attempt to extort money as said crime
is defined in sections 518, 519 and 524 of the Penal Code”; attorney's
suggestion in letter demanding $175,000 settlement in divorce case
that he might advise his client to report husband to Internal Revenue
Service and United States Custom Service constituted “veiled threats
[that] exceeded the limits of respondent's representation of his
client in the divorce action” and supported attorney's extortion
conviction]. As these cases illustrate, a threat that constitutes
criminal extortion is not cleansed of its illegality merely because it
is laundered by transmission through the offices of an attorney.
Bearing these principles in mind, we turn to the instant case.
Flatley v. Mauro, 139 P.3d 2, 15–21 (Cal. 2006).