When the term embezzlement is used in a discussion, many people will think of Bernie Madoff’s $50 billion ponzi scheme that defrauded thousands of people. Fewer people, however, have a full understanding of what embezzlement is and how it can manifest in significantly smaller crimes.
Cornell Law School’s Legal Information Institute defines fraud as the “fraudulent taking of personal property by someone to whom it was entrusted.” Cornell also notes that this is most often manifested as the theft of money. In many cases, embezzlement is simple theft with the exception that the property they are taking has specifically been placed into their protection.
A simple example of embezzlement would be if an accountant used their position as a trustee of the company’s finances to discreetly funnel company profits into their own bank accounts. Because the accountant was put into a position of trust over the money they stole, they are guilty of embezzlement rather than simple theft.
There are several types of embezzlement that can be committed against other people, organizations, or even the government. Generally, an individual can be guilty of embezzling money, materials, or information. In each case, the caretaker of the property betrays the trust placed with them to instead rob the entrusting party.
Embezzlement is a very specific crime. In order to be guilty, a prosecutor must prove that the accused took possession of property that they were entrusted with. Embezzlement is also a crime that requires intent. An individual who is entrusted with money or property who holds the good faith belief that they are now the legal owner of that property may not have committed embezzlement.
An example of this could be if an uncle gave their nephew $10,000 to hold and the nephew thought this money was a gift. Since he believed it was a gift, the nephew spends it under the impression that it was his money not the uncle’s. There may have been a breach of the uncle’s trust, but it is not likely to rise to the specific crime of embezzlement unless the uncle could prove that there was no way that a reasonable individual would have believed it was a gift.
If you have been accused of committing embezzlement, the best course of action is to discuss your options with an attorney experienced in embezzlement law to ensure that your rights are protected and the best possible outcome is achieved.