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What is the Definition of Embezzlement?
A type of white-collar crime involving a person or entity misappropriating funds or assets entrusted to them is known as embezzlement. It is a type of fraud where assets or funds are obtained lawfully. An embezzler has a legal right to have possession of them, but they do not use them for their intended purpose. Embezzlement happens when fiduciary responsibilities are intentionally breached.
Types Of Assets
It is also common for an embezzler to transfer types of assets other than money. This could involve everything from smartphones to real estate as well as company vehicles and more. Some individuals will embezzle things such as hardware, laptops, and other items that belong to an organization. An embezzler will utilize all of them them for their personal use.
Large Or Small
Embezzlement can involve both large and small amounts of assets or funds. When a store clerk simply takes a few dollars from a store’s cash register, it can be considered embezzlement. It is also something that occurs with executives working at large companies. They may transfer significant amounts of money into their personal accounts or falsely expense millions of dollars and more.
Embezzlement Process
Some organizations and individuals are entrusted with access to their client’s assets or funds. The purpose of this arrangement is often to safeguard the assets or funds for their intended use. Accessing these assets or funds and then converting them into personal use is illegal. In some situations, funds are sent to an account that only appears to be authorized to make transfers or payments. Embezzlement often involves accounts that are used as a front to enable a person, or a third-party collaborator, to take the funds. An embezzlement scheme can involve creating receipts and bills for business activities that did not happen. It could also involve services that were not rendered.
Types Of Embezzlement
It is common for embezzlement to be done in combination with other types of fraud. One is a Ponzi scheme. In this case, investors entrust a person or organization with assets they want to have invested on their behalf. An embezzler then takes the investor’s money and uses it for personal enrichment. In order for this fraud to be continued, it requires an embezzler to constantly obtain new investors and use the new money to appease previous investors.
Government Sector
Embezzlement also occurs in government sectors. This could involve employees taking national, state, or local funding and using it in their personal lives. This is something that often occurs when government funding is disbursed. It is done to support projects or fulfill contracts and more. Staff members will take some of the money for themselves. Money that was intended to pay for government expenses or projects.
Proving Embezzlement
Four main circumstances must be established for a guilty verdict on embezzlement.
*The accused must have been legally placed in charge of the assets or funds by the organization or owner.
*The accused knew that obtaining the assets or funds in question was a crime.
*The accused had the intent to take the assets or funds from the organization or owner. This will establish the accused was aware the assets or funds did not belong to them.
*The accused knew the assets funds did not belong to them and was aware they should not have used them how they were used.
Penalties For Embezzlement
Embezzlement cases are often dealt with at the state level. The penalties an organization or individual receives will often be determined by state law. In many states, embezzlement is a felony. It is common for a person or organization leaders found guilty of embezzling to face jail time as well as significant fines. The amount of a fine will be proportional to the value of the asset or funds that were embezzled. A fine will be significant if very valuable assets or a large amount of funds were taken from a person or company. The defendant is usually required to pay back all the funds or reimburses assets to the original owner. Jail time is often determined by the value of assets or the amount of funds embezzled.
Anyone who is charged with embezzlement should immediately contact an experienced attorney for representation. They will know that over 39 percent of embezzlement charges are dropped because of insufficient evidence. A case of embezzlement against someone could be dismissed because of an absence of intent, entrapment, duress or the funds having been paid back, and more. An attorney will know how to analyze the facts of a case and determine the best way to proceed.