What are the penalties for embezzlement?

| by Max Soni

Last Updated on: 27th September 2023, 12:45 am

What are the Penalties for Embezzlement?

Embezzlement is a white-collar crime that involves stealing money or assets from an organization or business. This article covers the criminal penalties and sentences for embezzlement under federal and state laws.

What is Embezzlement?

Embezzlement is defined as the fraudulent taking of money or property that an individual was entrusted with due to their position or employment. Common examples include:

• An employee stealing company funds
• A financial advisor misappropriating client assets
• A nonprofit treasurer using donated money for personal expenses

To be convicted of embezzlement, prosecutors must prove the defendant was in a position of trust, acquired the property through that relationship, and intentionally misused the assets illegally.

Federal Embezzlement Penalties

At the federal level, embezzlement cases are often prosecuted under:

• 18 U.S.C. § 656 – Theft/embezzlement by bank officer
• 18 U.S.C. § 666 – Theft from programs receiving federal funds
• 18 U.S.C. § 1341 – Mail fraud
• 18 U.S.C. § 1343 – Wire fraud

Penalties under these laws include:

• Up to 30 years in prison
• Fines up to $1,000,000
• Restitution to victims

Longer sentences apply for large-scale embezzlement schemes with major losses for victims.

State Embezzlement Laws

Most states also have laws prohibiting embezzlement with penalties such as:

• Up to 10 years in state prison
• Fines up to $25,000
• Restitution to victims

Factors that can increase sentences for state embezzlement convictions include:

• Prior criminal record
• Position of trust
• Amount stolen
• Multiple victims
• Length of scheme

Federal Sentencing Guidelines

Under the U.S. Sentencing Guidelines for embezzlement offenses, key factors include:

• Loss amount
• Number of victims
• Sophistication of offense
• Abuse of trust
• Role as a leader/organizer

These enhance sentences for larger, more complex embezzlement cases. The guidelines provide a sentencing range, but judges have discretion to depart from the range.

Restitution to Victims

Courts commonly order restitution in embezzlement cases to reimburse victims for losses. Restitution may cover:

• Stolen money and property
• Lost income and interest
• Attorney fees
• Accounting costs

Restitution amounts can total millions of dollars for large corporate embezzlement cases.

Fines and Asset Forfeiture

In addition to imprisonment and restitution, embezzlers may face heavy fines up to $250,000. Prosecutors can also seize assets purchased with embezzled funds through forfeiture laws.

Probation and Supervised Release

First time embezzlers may receive probation with strict conditions like restitution payments. But violating probation terms can result in incarceration. Defendants may face additional supervised release after completing prison time.

Defenses to Embezzlement Charges

Possible defenses to embezzlement allegations include:

• Lack of fiduciary duty or position of trust with victim
• No intent to unlawfully take property
• Rightful claim or ownership of assets
• Someone else committed the embezzlement

An experienced white collar criminal defense attorney can evaluate defenses and work to get charges reduced or dismissed through negotiations.

Takeaways on Embezzlement Penalties

• Federal and state laws impose years in prison
• Fines, restitution, asset forfeiture also common
• Loss amount and victims impact sentencing
• Probation with restitution for first time offenders
• Possible defenses can defeat or reduce charges

The substantial penalties for embezzlement highlight the legal risks of misusing entrusted funds or assets. Strong financial controls and auditing procedures can help prevent embezzlement in businesses and organizations.

References

[1] https://www.justice.gov/archives/jm/criminal-resource-manual-941-18-usc-656-theft-embezzlement-or-misapplication-bank

[2] https://www.law.cornell.edu/uscode/text/18/666

[3] https://www.ussc.gov/guidelines/2018-guidelines-manual/annotated-2018-chapter-2-part-b-3

[4] https://www.nolo.com/legal-encyclopedia/embezzlement-crimes-32628.html

[5] https://www.fbi.gov/scams-and-safety/common-scams-and-crimes/embezzlement