The term embezzlement may conjure pictures of CEO bosses decked out in their finest. Although this type of white-collar crime was a tool used by the government to bring down the likes of Bernie Madoff and the business leaders at Enron, the authorities also use embezzlement charges to target more than just billionaire business leaders and massive business schemes.
Even the Average Joe can find themselves accused of embezzlement.
Perhaps an employer claims funds are missing, or neighbors argue Homeowner’s Association (HOA) money was misused. Whatever led to the allegations, the first step for anyone who finds themselves facing these allegations is to get a better understanding of the situation. The following will provide some foundational information before discussing common defense strategies to help you feel more in control as you move forward.
What is embezzlement?
The Supreme Court has defined embezzlement as any fraudulent appropriation of property by a person in a position of trust. There are multiple elements the government must prove to establish a claim for embezzlement. These include:
- Fiduciary. The accused must serve as a fiduciary, or be in a role of trust over the property, with the alleged victim. An example is a bank teller.
- Possession based on the relationship. The alleged offender must have come into possession of the funds as a result of the fiduciary relationship. Going back to the example of a bank teller, this would occur when a customer gives their money to the bank teller with the expectation the teller transfers the funds into the victim’s account.
- Fraud. Next, the government will need to show that the accused fraudulently transferred the property in question. In our current example this could be an act of transferring the alleged victim’s funds into the bank teller’s personal account instead of the victim’s account.
- Intent. Finally, the prosecution will need to establish the alleged offender meant to steal the property, that they knew what they were doing.
Basically, the government may have a case for embezzlement when they believe someone intentionally uses funds for their own purposes.
The bank teller example used above is a common one, but a more local and recent example is that of a property management company hired by an HOA. Authorities claim the owner of the management company stole $600,000 in HOA funds for personal use instead of using it to better the community. They are currently building a case against this manager, working to establish that she is guilty of embezzlement. If successful, she could face serious penalties.
What types of penalties are possible with an embezzlement conviction?
Whether a property manager in charge of HOA fees, a bank teller, or serving in another fiduciary role, the consequences if convicted of embezzlement are serious and can include civil as well as criminal penalties. They often include repayment of the allegedly ill-gotten gains, additional financial fees, and potential imprisonment.
Are there defenses to embezzlement?
Going back to our main question, is it possible to get out of embezzlement charges, the answer is yes. Defenses to these allegations can defeat the claim. Although the best defense strategy will vary depending on the details of the case, it is important to review the elements noted above. Review each individual portion because if the government cannot establish each claim, they are unlikely to have a successful case.
It is wise to tailor this and other defense strategies to each case and note that sometimes a mix of multiple strategies works best. Those accused of embezzlement should know that they may need to navigate state as well as federal charges. An attorney experienced in this area of criminal defense can discuss these and other options to help better ensure the best possible outcome.