What is Embezzlement Law?
Embezzlement law provides the specific elements that the state must prove in order to convict someone accused of misappropriating money or property that was placed in their care. It also determines the legal defenses that a defendant may raise, and the punishments that can be imposed after a conviction. Most embezzlement prosecutions take place at the state level, and the penal codes in every state contain a statute defining the crime. Whether embezzlement constitutes a misdemeanor or felony typically depends on the value of the property taken by the defendant.
While the crime of embezzlement differs slightly in each jurisdiction, it generally requires the defendant to convert property that has been entrusted to the defendant by the victim. Examples include a stockbroker who skims money from client accounts, or a contractor who takes lumber belonging to a property owner. In this context, the term “convert” means to deal with the property in a way that is inconsistent with the arrangement between the defendant and the owner. Thus, a car dealer who makes personal use of a vehicle that the dealer is supposed to be selling on consignment may be guilty of embezzlement.
Unique Aspects of the Crime
In order to prepare a defense to criminal charges, the defendant must understand the exact nature of the offense of which he or she has been accused. This is true of any crime, but it is especially important when dealing with embezzlement, because it closely resembles several other property crimes. Even if the defendant acted improperly, it may be possible to defend the charges by showing that the conduct does not qualify as embezzlement, and that the defendant has been charged with the wrong crime.
For example, embezzlement is very similar to larceny, in that both crimes involve the taking of property belonging to another. The only difference is that larceny can be committed by anyone, while embezzlement requires a defendant who has been entrusted with the property. This means that the defendant’s position within a company will often determine which crime applies. Store clerks are not entrusted with the cash in the register, so taking it will constitute larceny. If the same cash is taken by the store manager, however, the crime should be charged as embezzlement.
The crime of fraud provides another example. Fraud occurs when the defendant gains ownership of the victim’s property through some type of misrepresentation. In other words, the defendant uses a scheme to obtain title to the property. By contrast, a defendant guilty of embezzlement does not actually own the property once it is taken. The defendant takes possession only – title stays with the true owner. Therefore, if a mortgage lender tricks a client into signing over the deed to the client’s home, the mortgage lender has committed fraud, not embezzlement.
The Issue of Fraudulent Intent
Another element of embezzlement that can sometimes prevent a conviction involves the requirement of fraudulent intent. To be found guilty, the defendant must have purposefully tried to defraud the owner of the property. If the defendant took the items with the plan of returning them before anyone noticed, then the element of intent is missing. Of course, the jury will be allowed to infer fraudulent intent from the defendant’s conduct. A mere assertion at trial that the defendant “was going to put it back” is unlikely to succeed.
Similarly, people who take property based on a mistaken (but genuine) belief that they have a right to the property cannot be convicted of embezzlement. The element of fraudulent intent requires that the defendant acted with the objective of wrongfully depriving the true owner of his or her property. This cannot be said of defendants who believe they are the rightful owner. Again, the jury will consider the defendant’s conduct objectively. Fraudulent intent will probably be inferred if the property was taken in secret. Conversely, if the property was taken in open view of the owner, this suggests fraudulent intent is lacking.
Restitution and Punishment
Those who are convicted of embezzlement can expect to be ordered to make restitution. Restitution means the money or other property that was taken must be returned. Oftentimes the defendant no longer has the property at the time of sentencing, and will need to pay the debt in installments. Judges will usually impose a term of probation that will not terminate until the last installment has been paid. In addition to restitution, the judge may order further penalties such as incarceration, fines, community service, and more.
An Experienced Attorney Can Help
If you have been accused of embezzlement, you may face hostility from ex-employers who believe you violated their trust, as well as law enforcement investigators who do not have your best interests in mind. There is no need to deal with the situation on your own. Contact a defense lawyer today.
Embezzlement Law - US
- Embezzlement - Wikipedia
Embezzlement is the act of dishonestly appropriating or secreting assets, usually financial in nature, by one or more individuals to whom such assets have been entrusted. Embezzlement is a kind of financial fraud. For instance, a clerk or cashier handling large sums of money can embezzle cash from his or her employer, a lawyer can embezzle funds from clients' trust accounts, a financial advisor can embezzle funds from investors, or a spouse can embezzle funds from his or her partner. Embezzlement may range from the very minor in nature, involving only small amounts, to the immense, involving large sums and sophisticated schemes.
- Embezzlement of Public Money, Property or Records
Whoever embezzles, steals, purloins, or knowingly converts to his use or the use of another, or without authority, sells, conveys or disposes of any record, voucher, money, or thing of value of the United States or of any department or agency thereof, or any property made or being made under contract for the United States or any department or agency thereof; or Whoever receives, conceals, or retains the same with intent to convert it to his use or gain, knowing it to have been embezzled, stolen, purloined or converted Shall be fined under this title or imprisoned not more than ten years, or both.
- FBI - Financial Crimes
The Federal Bureau of Investigation (FBI) investigates matters relating to fraud, theft, or embezzlement occurring within or against the national and international financial community. These crimes are characterized by deceit, concealment, or violation of trust, and are not dependent upon the application or threat of physical force or violence. Such acts are committed by individuals and organizations to obtain personal or business advantage.
- Theft, Embezzlement or Misapplication by Bank Officers or Employees
Title 18, Chapter 31 of the U.S. Code contains sections that deal with the various forms of embezzlement and their penalties. For example, Section 656 covers theft, embezzlement, or misapplication by a bank officer or employee.
Organizations Related to Embezzlement Law
- Federal Trade Commission - Financial Crimes - Embezzlement
The FTC deals with issues that touch the economic life of every American. It is the only federal agency with both consumer protection and competition jurisdiction in broad sectors of the economy. The FTC pursues vigorous and effective law enforcement; advances consumers’ interests by sharing its expertise with federal and state legislatures and U.S. and international government agencies; develops policy and research tools through hearings, workshops, and conferences; and creates practical and plain-language educational programs for consumers and businesses in a global marketplace with constantly changing technologies.
- National Consumers League (NCL)
Our mission is to protect and promote social and economic justice for consumers and workers in the United States and abroad. The National Consumers League is a private, nonprofit advocacy group representing consumers on marketplace and workplace issues. We are the nation's oldest consumer organization.
Publications Related to Embezzlement Law
- Association of Certified Fraud Examiners (ACFE) - Fraud Manual on Employee Embezzlement
The manual describes a host of common fraud schemes perpetrated by trusted employees within the organization, as well as many important concepts about fraud. While these fraud schemes come from the public sector, the same schemes also occur in the private sector. So, there is plenty of information for everyone. The material is not copyrighted and is provided with the compliments of the author, Joseph R. Dervaes, with the hope that readers will use the information to both deter and detect employee embezzlement fraud in the workplace.
- WordPress - Embezzlement
Open source WordPress has been incredibly successful and risen from a handful of users to the most-used blog tool in its category. However, as easy-to-use as we could make the open source package, there was still a barrier in that it requires a hosting account, a database, FTP, and a whole alphabet soup of acronyms that make normal people like you and me dizzy.
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