The term embezzlement refers to a type of white collar crime. It occurs when a person is entrusted to handle the finances of another person or business, and illegally takes that money for their own personal use. Embezzlement is most common in situations involving an employee with access to their employer’s checks, cash, and/or bank account(s). An example of this would be an accountant or bookkeeper illegally writing a check to themselves, stealing cash, or withdrawing money from business bank accounts.
Whether embezzlement is considered a misdemeanor or a felony depends on the amount of money that was embezzled. Additionally, states may differ regarding what constitutes a felony or misdemeanor embezzlement. Embezzlement can also be considered criminal conversion. As it is a crime against ownership, the act of embezzling violates the right of the owner to control the use of the property entrusted to the embezzler. State statutes typically include tangible and intangible property, and do not generally include real property. Real estate embezzlement often occurs when a real estate agent embezzles funds from their clients or embezzles funds from the real estate company in which they work.
What Is a Fiduciary Relationship?
In order for a person to be charged with embezzlement, a fiduciary relationship must have existed between the two parties involved. A fiduciary relationship involves one person placing their trust, confidence and reliance on another; the trusted person then has the duty to act for the benefit and best interests of the other party. The party who owes the duty is called the fiduciary, and the party to whom the duty is owed is known as the principal.
Fiduciary relationships are most common in situations in which a business has hired a bookkeeper, accountant, or payroll manager to oversee the financial aspects of their business. The person charged with embezzlement must have accessed the stolen funds by using their fiduciary privilege to access the stolen cash, blank checks, or financial accounts. Embezzlement charges also require that the fiduciary intended to steal the money from the principal. Meaning, the fiduciary was aware of the fact that their actions would result in the other party losing their own money.
What Are the Consequences of a Conviction for Embezzlement?
The consequences of an embezzlement conviction will vary based on whether the crime was a misdemeanor, or a felony. As previously discussed, embezzlement is categorized as either a misdemeanor or a felony based on the amount of money stolen from the owner (or, principal). Consequences will also vary from state to state, as well as various other factors related to each specific case.
Many people often ask will I go to jail for embezzlement? Judges will consider the following when imposing a sentence:
- The amount of money embezzled;
- The time period over which the embezzlement occurred;
- The financial harm caused to the victim of the embezzlement;
- Whether the defendant intended to embezzle from the plaintiff; and
- Any prior embezzlement or financial crime convictions.
Felony embezzlement convictions are, of course, generally more severe and could include jail time. Such punishments could include:
- Extensive jail or prison time;
- Probation, or parole;
- Significant fines and/or restitution to the victim;
- Court ordered rehabilitation courses or programs;
- Being ineligible to hold a public or elected office;
- Having professional licenses, such as an accountant certification, revoked; and/or
- Permanent documentation of the conviction on their criminal record, which could negatively impact future employment opportunities.
Is Embezzlement a Federal Crime?
Embezzlement may be charged as a federal crime, depending on the facts of the case. Typically, embezzlement is only a federal crime if it involves embezzling federal money or property. The most common persons that are charged with the federal crime of embezzlement are governmental employees or elected officials embezzling public funds.
What are the Common Defenses to Embezzlement Charges?
Available defenses to embezzlement charges will, again, depend on the specifics of each case. The most common defense is that the embezzler did not actually intend to steal the other party’s money, and may be used when the defendant:
- Intended to return the money;
- Was unaware that they took any money in the first place; and/or
- Never intended to take the money for their own personal gain.
Under this defense, the defendant could argue that they:
- Removed the money from the account accidentally;
- Were following the directions of the owner; and/or
- Did so as requested by the other party.
As a fiduciary relationship must exist in order for the crime to be considered embezzlement, the defendant may also argue that no such relationship existed. There are several other more general defenses that they may utilize, including but not limited to:
- Insufficient evidence;
- Entrapment; and
How Can A Person Protect Themselves from Embezzlement?
It is important for employers to learn how to recognize embezzlement in the first place. Some of the more common signs of employee embezzlement include:
- Delayed bank transactions, such as deposits;
- Altered checks or questionable signatures;
- Unnecessary or duplicate expenses; and
- Changes in the employee’s schedules, habits, or standard of living.
When entrusting a person with a fiduciary relationship, such as an accountant or a bookkeeper, it is important to continue overseeing their work to ensure that the money does not go missing. Another way to protect yourself from embezzlement is to maintain meticulous financial records relating to bank accounts, issued checks, and cash deposits.
Should I Hire an Embezzlement Attorney Near Me for Legal Assistance?
If you feel that you have been a victim of embezzlement, or if you are being charged with embezzlement, you should consult with a skilled and knowledgeable criminal lawyer. An experienced criminal attorney can represent your interests either way, and inform you of any defenses available to your case if you are the defendant. Additionally, will protect your rights and represent you in court as needed.