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Embezzlement Definition

Key Takeaways:

  • Embezzlement is a white-collar crime often involving fraudulent use or conversion of entrusted property.
  • You can face both criminal charges and civil liability for embezzlement.
  • Embezzlement can involve taking small amounts from an employer or trust over a long time.

Embezzlement is a white-collar crime, usually committed in the workplace. What makes embezzlement different than regular larceny is the person is supposed to have access to the money, services, or goods. Misappropriation for your own use is what makes the crime of embezzlement.

Embezzlement can be a felony or misdemeanor, depending on the value of property taken. Even if you mean to return the property, it may be too late if you’ve already committed a criminal offense. For more information about embezzlement charges, contact an experienced criminal defense attorney.

What Is Embezzlement?

Embezzlement is using assets within your control for unintended purposes. It is different from other theft crimes because you can be lawfully in possession of the property. The crime occurs when you convert those assets to benefit yourself instead of using them as intended.

The Supreme Court has defined embezzlement as “the fraudulent appropriation of property by a person to whom such property has been entrusted, or into whose hands it has lawfully come.”

Embezzlement is a form of criminal fraud and often involves a breach of fiduciary responsibility.

What Are Examples of Embezzlement?

Embezzlement can encompass a lot of behavior. For example, you can temporarily “borrow” money from a trust or bank account you control. You can face criminal charges even if you intend to pay it back. Other examples include:

  • Taking cash from the cash register and not ringing up purchases
  • Taking bribes or kickbacks from vendors in exchange for business
  • Adding a fake employee to the payroll and taking the payment

Many embezzlement cases involve taking money gradually over time to avoid suspicion. Some people need cash and intend to repay it once they have covered their expenses. This can look legitimate, and it is not always easy to catch. But whether you intend to pay it back or not, it still qualifies as embezzlement.

Embezzlement requires a relationship between the embezzler and the person with the assets. The assets need to be entrusted to the embezzler. Otherwise, it is a different crime.

What Is Embezzled Property?

Embezzlement isn’t limited to

  • Money and credit cards
  • Real estate and property
  • Company cars, computers, or phones
  • Stocks, securities, or investments

Embezzled assets can be transferred into a normal checking account or through a third party. For example, embezzlers may try to hide funds in offshore accounts and use fake names or companies to hide their activity. Increasing computer crimes and technology make embezzlement an evolving crime.

How Do You Prove Embezzlement?

According to the Department of Justice, the elements of embezzlement as a federal crime include:

  1. A trust or fiduciary relationship between the defendant and a private organization or agency;
  2. The property came into the possession or care of the defendant by virtue of their employment;
  3. The defendant’s dealings with the property constituted a fraudulent conversion or appropriation to their own use; and
  4. The defendant acted with the intent to deprive the owner of the use of this property.

What Are the Criminal Penalties for Embezzlement?

The criminal penalties for embezzlement can depend on whether it is a state law or federal offense. Other factors include:

  • The amount of money
  • Use of public funds
  • Number of victims

As a federal felony, the penalties for embezzlement can include up to a 10-year prison sentence, fines, and restitution. A felony criminal record will make it harder to get a job and find a place to live, and you can lose your right to own a gun.

Depending on how the money or property was used, there can also be associated offenses. For example, trying to hide the illegal nature of the money could also be criminal money laundering.

How Can I Defend Against Embezzlement?

Companies and organizations often use monitoring, employee reporting, or audits to track funds. Risk management teams have entire roles focused on watching property, vetting employees, and monitoring things like money and equipment. If you are aware of an embezzlement investigation where you work, you may want to reach out to an embezzlement attorney.

Sometimes, the person committing the theft covers it up by making it look like someone else was committing embezzlement. Even if you had nothing to do with the misappropriation of company property, it may look like you did it. If you are accused of taking money or property for your personal use, talk to an experienced criminal defense lawyer for legal advice.

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