What Are Examples of Embezzlement and Employee Theft?
Embezzlement and employee theft involve theft from someone in a position of trust. When someone leaves money or valuables in the care of someone else, the employee or trustee may be tempted to take a portion for themselves. Embezzlement may be motivated by necessity, unfair treatment, or temptation. If warning signs of theft are discovered, it can lead to a criminal investigation.
Unfortunately, many people are unjustly accused of embezzlement when there is no evidence of any wrongdoing. Even without evidence, the prosecutor may still decide to bring criminal charges. If you were accused of embezzlement or employee theft, you have the right to a strong defense. Contact an experienced criminal defense lawyer for help.
Embezzlement is a type of theft that occurs when someone who has been entrusted with the money or company property fraudulently takes or misdirects money that belongs to someone else. The embezzler could be an employee, trustee, administrator, accountant, or another person in a position of trust.
Embezzlement is generally considered a “white-collar crime.” White-collar crimes are financially motivated, non-violent offenses. Embezzlement may not be much different than common employee theft. However, when someone talks about embezzlement, it is generally because it involves a lot more money. An employee taking $20 from a small business may be employee theft. Employees taking $200,000 from the business may be embezzlers.
Embezzlement is not limited to employee theft. Embezzlement can involve a trustee taking property from a trust or an insurance agent directing the customer’s premiums into their own bank account. Some examples of embezzlement may include:
- Fake vendor payments: A bookkeeper or assistant could create fake invoices for goods or services never provided. Payments to the fake vendor may be directed to a family member or the worker’s own fake business. This kind of theft may also include altering accounting records.
- Taking kickbacks: For employees or agents in a position to select vendors, taking kickbacks from other businesses and not reporting the money or benefits could be theft.
- Skimming from fundraisers: Fundraising can be thankless work. People working hard to collect money for charitable causes can be tempted to skim donations to cover their expenses and costs, and it can be difficult to detect.
- Customer credit card fraud: Many workers are entrusted with the credit card information of customers. This is personally identifying information that can be misused to fraudulently purchase other goods for the employee’s benefit.
- Padding: It can be tempting for employees who travel for work to pad their expense reports. Padding can include covering meals or rooms for someone else in exchange for cash or buying gift cards under the reporting limit to sell or keep for personal use.
- False theft reports: Falsely reporting a work computer as stolen or other property as missing may be a type of embezzlement.
- Selling trade secrets: Selling information to another company may not be just a violation of a noncompete agreement, taking money for company information may be embezzlement.
Employee theft is one of the most common types of embezzlement. Stealing by workers could also generally be considered embezzlement because the worker is in a position of trust with the business property. This includes a cashier handling customer cash, a retail worker processing clothing for the sales floor, or management processing accounts and payroll.
Any type of taking or misappropriation of employer property may be considered a type of employee theft. Employee theft can occur in any type of job, from minimum wage restaurant workers to corporate officers defrauding the company. Some of the common types of employee theft include:
- Intentionally mismarking prices: When an employee has control over price tags or ringing up purchases, they may be able to improperly discount items for themselves, friends, or family.
- Hiding inventory in the trash: An employee could put a valuable retail item in the regular trash. After the trash is taken out, the employee or an associate could go take the item out of the trash without it having to pass through the security measures at the front door.
- Markouts: Many businesses markout damaged goods or food they can no longer sell. If an employee marks out an item in order to keep it for themselves, this could be considered employee theft.
- Not ringing up cash purchases: It can be difficult to keep a strict inventory of some items, including food and alcohol. If a customer pays cash for entry or to buy food or a drink, an employee could pocket the cash without ringing it up at the cash register, and the employer may have no idea.
Embezzlement cases often involve larger amounts of money, while employee theft may only deal with stealing some clothes or office supplies. However, these crimes may be prosecuted under similar state or federal theft laws. The criminal penalties for theft or larceny generally depend on the value of the items or services involved. Theft under a certain amount may be charged as a misdemeanor, with penalties including fines, probation, community service, or jail.
Grand theft of larger amounts of money or goods may be a felony. Depending on the state law, felony theft could result in prison for more than a year, fines, restitution, and a felony criminal record. A felony conviction can make it harder to get a job, find a place to live, get benefits, and could restrict gun ownership.
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