Embezzlement is a crime in which a person who has access to or lawful possession of money or property fails to return it to its owner, or uses it or spends it in a way it was not intended to be used or spent. The key characteristics of embezzlement are:
- The defendant had lawful possession or permission to possess or use the money or property. This is the main difference between embezzlement and theft. A person commits theft when they take something they never had permission to possess.
- The defendant converted or took the money or property for their own use, and not its intended use. Conversion includes more than taking, such as using up, selling the property, giving the money or property away to someone else, damaging property and changing its worth or value, or withholding the money or property from its owner.
- The defendant acted with intent. They intended to deprive the owner of the money or property permanently. They do not intend to give it back.
The crime of embezzlement can be a misdemeanor or a felony. Whether someone is charged with misdemeanor or felony embezzlement usually depends on the amount of money or the value of the property involved. For example, in Virginia, embezzlement is a misdemeanor if the value of the property is less than $200.
What Are Some Embezzlement Examples?
The most common example of embezzlement involves an employee, such as an office manager, who has access to money in order to purchase supplies for the office.The office manager takes that money, or uses it to purchase things for themselves, without permission and with no intent to return it.
Another example of embezzlement would be an account or bookkeeper who illegally writes a check to themselves, or withdraws money from the business bank accounts. Either way, they have no plan to return the money they are stealing. As such, their actions could be considered embezzlement.
Embezzlement does not always have to involve money. However, embezzlement always results in the conversion of assets. By nature, most assets have monetary value. Because of this, if a non-monetary asset is embezzled, it would likely result in a monetary damages award as the asset’s owner is deprived of their valuable asset.
Embezzlement Is an Example of Which Type of Crime?
White collar crime refers to a subset of criminal law in which crimes are committed by those in business and government. These crimes do not generally involve any physical or bodily harm, as they are generally non-violent in nature. White collar crimes are most commonly motivated by money. Embezzlement is an example of white collar crime. This is because embezzlement does not generally involve violence, and occurs when a person is entrusted to handle the finances of another person or business.
Some other examples of white collar crimes include criminal fraud, and tax evasion. Criminal fraud involves a scheme meant to cheat or deceive others for financial gain. Examples of criminal fraud include identity theft, forgery, and perjury. Tax evasion is any act intended and designed to defraud the IRS. It generally involves a person or a corporation misrepresenting their income to the IRS, so they may avoid paying their rightful taxes.
How Do You Prove Felony Embezzlement?
The exact elements required to prove embezzlement may differ from state to state, however generally the following must be shown:
- There is a relationship between the parties involved. Such as employer and employee, trustee and beneficiary, or investment banker and client.
- The defendant must have acquired the money or property or was entrusted with the money or property because of the relationship. The defendant was entrusted with the money or property as part of the relationship.
- The defendant must have taken or converted (used, damaged, gave away) the money or property.
- The defendant must have acted with intent to take or permanently deprive the legal owner of their money or property.
How Much Evidence is Needed to Prosecute Embezzlement?
It is important to note that every case is different, and as such, the evidence needed to prosecute the crime of embezzlement will vary. Generally speaking, the following evidence may be used to prove embezzlement:
- Financial records;
- Incriminating statements from other employees;
- An actual confession of guilt from the suspect; and/or
- A pattern of taking money and/or property for personal use, as this is evidence of intent.
If it can be shown that the suspect employed a specific method or scheme in order to embezzle, it could be sufficient to prove the required element of intent. Insufficient evidence, as well as lack of intent, are the most commonly effective defenses against embezzlement.
Therefore, as an employer or business owner it is important to incorporate various different security protocols in order to ensure the safety of your company’s assets. In the current age of technology numerous amounts of embezzlement crimes occur through the use of a company computer.
Thus, it is important for a company to implement a plan for computer security such as asset and inventory tracking software, computer information monitors, and various other computer security protections. Then, if an employee embezzles company assets, the employer would then have hard evidence to demonstrate the embezzlement occurred and the guilty party.
What Are the Penalties for Felony Embezzlement?
The penalties for felony embezzlement vary from state to state. In most states the penalties increase or are more severe based on the value of what was embezzled.
For instance, in New York the penalties for embezzlement are as follows:
Petty Larceny: theft or embezzlement of property with a value of less than $1,000. Petty larceny is a misdemeanor and punishable by up to one year in prison and a fine of up to $1,000.
Fourth Degree Larceny: theft or embezzlement of property valued at more than $1,000. The penalty for fourth degree larceny is up to four years in state prison.
Third Degree Larceny: theft or embezzlement of property with a value of more than $3,000. A defendant convicted of third degree larceny faces up to seven years in prison.
Second Degree Larceny: theft or embezzlement of property valued at more than $50,000. The penalty for second degree larceny is up to fifteen years in state prison.
First Degree Larceny: theft or embezzlement of property with a value of more than $1 million. If a defendant is convicted of first degree larceny they may face up to 25 years in prison.
First, second, third, and fourth degree larceny are all felonies in New York. In addition to a prison sentence, defendants convicted of felony embezzlement may have to pay a fine of up to twice the value of the embezzled property.
Are There Any Defenses for Felony Embezzlement?
Defendants in embezzlement cases may have one or more of the following defenses:
- Insufficient evidence: A defendant must be found guilty beyond a reasonable doubt. If there is not enough evidence to meet that burden of proof, the charges might be dropped or the defendant may be found not guilty.
- Duress: To successfully use a defense of duress, the defendant must be able to show they believed they were in danger or at risk of a significant loss if they did not embezzle the money or property.
- Entrapment: Entrapment is when the government or law enforcement coerces a person into embezzling money or property they would not have otherwise taken. While duress essentially means the defendant was threatened, entrapment implies the defendant was influenced or enticed to take property they would not have taken in the absence of that influence.
- Lack of Intent: A defendant cannot be guilty of embezzlement if they did not have the intent to permanently deprive the other person in the relationship of their money or property. There are a few specific defenses that address a lack of intent:
- Mistake: A defendant who made a mistake and accidentally deposited their employer’s money into their own bank account has a defense because they did not intend to steal the money. Similarly, a defendant who was mistaken about what they could use the money for might have a defense.
- Consent: A defendant may argue that the true owner of the property consented to it being used for their benefit.
- Incapacity: A defendant who is incapacitated, such as under the influence of drugs or alcohol, may be able to argue that they could not have formed the required intent to be found guilty of embezzlement.
Is Embezzlement the Same as Theft?
Embezzlement is different from theft. A necessary element of embezzlement is the defendant had permission to possess the money or property but used it unlawfully. They had legal access to the property.
The crime of theft involves unlawfully taking money or property from the owner that the defendant never had a legal right to have in their possession.
Do I Need a Lawyer If I Am Facing Felony Embezzlement?
Felony embezzlement is a serious crime with potentially serious consequences, including significant fines and prison time. Any felony conviction has long term consequences. If you have been charged with embezzlement you should contact an experienced criminal defense attorney to assist you with your case. They can help you understand the charges against you and determine if you have any possible defenses.