Embezzlement is a type of financial fraud. It is characterized as a white collar crime, or a subset of criminal law in which the crimes are committed by individuals in business and in government. An example of embezzlement is when there is theft or misappropriation of funds that belong to an employer, but were the responsibility of an employee.
Embezzlement is different from larceny or theft, in that the embezzler originally had permission from the owner of the property, to handle that property as instructed by the owner. The embezzler, however, never had permission to take the property from the company or organization.
Some other examples of embezzlement include:
- Employees moving money from the account of a customer into their own account;
- Altering account books and records to hide financial losses or stolen assets; or
- Using the Social Security check that belongs to a child or a relative.
Embezzlement is a crime that can result in financial fines, imprisonment, or both. An embezzler may receive a lesser sentence if they repay or return what was embezzled; however, this largely depends on the extent of their embezzlement, how much harm the act caused, and the manner in which they repaid it. It is also important to note that repaying or returning what they embezzled will not absolve or clear them of the crime completely.
For embezzlement to exist, and to be charged, there are four conditions that must be met:
- The defendant must have a fiduciary relationship with the party who owns the property or asset, the plaintiff;
- The defendant acquired or gained possession of the property through the fiduciary relationship;
- The defendant acquired ownership through the fiduciary relationship with intent to permanently deprive its owner; and
- The defendant’s actions were intentional.
In defense of themselves, the defendant could claim:
- Insufficient Evidence: There must be clear and irrefutable evidence that the embezzlement occured. Criminal charges may often be dismissed if there is insufficient evidence to prosecute;
- This defense only works if the jury cannot find you guilty without a reasonable doubt. However, roughly forty percent of federal embezzlement cases are thrown out because of insufficient evidence.
- Duress: Duress as a defense legal term is defined as “constraint illegally exercised to force someone to perform an act.” Therefore, duress as a defense occurs when someone seriously believes they will be in some danger or harm if they do not commit a crime;
- Some common duress defenses that will not work in embezzlement cases include embezzlement to satisfy an addiction, or to prevent family hardship. A successful duress claim could be that you would lose your job unless you participated in the embezzlement scheme.
- Entrapment: Entrapment differs from duress in that entrapment occurs when the government compels an innocent person to commit a crime they otherwise would not have committed. In comparison, duress implies threat. The prosecution will generally contend that you were inclined to commit the offense regardless of influence;
- Absence of Intent to Commit a Crime: As you can see from two of the four conditions, whether or not the defendant intended to embezzle is very important. Embezzlement requires that you intended to take the money or property from the people who entrusted you with the money or property; or
- A common absence of intent to commit a crime defense is when a person thought they were the true owner of the money or the property that they are accused of embezzling.
- Incapacity: If you can show that at the time of embezzlement, you were mentally incapacitated and that was the cause of your act, you could have a defense against the embezzlement charge.
- An example of incapacity includes being under the influence of heavy medication, which causes you not realize that you deposited company money into your own account. However, voluntary intoxication is not a reasonable defense to any crime, including embezzlement. Additionally, claiming insanity is unlikely to be successful.
What if you honestly did not know that you were committing embezzlement? Unfortunately, ignorance of the law is not ever a defense. However, if you embezzled funds because you reasonably thought you were entitled to them, then you may have a defense.
This was previously mentioned as absence of intent to commit a crime. An honest mistake will need to be thoroughly proven by an attorney, as it is a fine line between ignorance and intent.
Although embezzlement is a generally a non violent crime, it is still a serious crime. An embezzlement conviction can come with severe financial penalties, jail time, or even both. A knowledgeable and experienced criminal defense attorney should be consulted if you are being accused of or charged with embezzlement.
A well-qualified attorney will evaluate your case, help you make sense of the charges you are facing, and will represent you in court. Finally, they will help you assert the best possible defense.