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In the history of criminal law, embezzlement used to be a crime where defendants easily got away from conviction because of a loophole in the law. Lack of proof for the element of a “trespassory taking” made it difficult for the prosecution to pursue the embezzlement charge. For this reason, legislators decided to resolve the issue by amending the law.

Embezzlement Definition

Embezzlement is the fraudulent act of stealing personal property of an employer, private company or government by a person who was entrusted with it. Oftentimes, the phrase “misappropriation of money” is used to describe this crime. Transferring the stolen property to a third party will not affect the charge of embezzlement.

Elements of Embezzlement

As mentioned above, criminal law has been amended to eliminate the problem of the lack of “trespassory taking.” Now, the law only requires proof that the defendant possessed the property, e.g. goods or funds, as a result of his position or authorization granted to him to exercise substantial control over the property. Lastly, it should involve an intentional act on the part of the embezzler.

To assess whether the defendant had substantial authority over the stolen property, courts typically look at factors such as the defendant’s position in the company, description of his tasks and the company’s practices.

Embezzlement Cases

There are different types of acts of embezzlement. The most common case is where the defendant acquires small amounts of money over a period of time. In other cases, the embezzlers fraudulently take a significant amount of property in the form of goods or funds in one single act.

There are also cases where employees intentionally report a smaller amount of income to the company, then take out the difference for themselves. Stealing money through manipulation of accounting reports is also a form of embezzlement.

In a New Hampshire fraud case a couple of years ago, a 52-year old woman was sentenced for stealing more than $300,000 from a tennis club where she used to work as a volunteer. She acquired the amount by getting cash or issuing checks to herself over a period of ten years. The New Hampshire criminal court charged her with three felony counts of theft and issued a sentence of imprisonment.

Tax Issues

Funds that have been acquired through an act of embezzlement have to be declared to the IRS. Failure to do such could result to charges of tax evasion. If the embezzler decides to return the funds, he could be entitled to deduct the amount from his taxes.

Embezzlement Penalties

Typically, embezzlement penalties depend on the amount stolen and the level of trust granted to the defendant. Possible penalties include imprisonment up to ten years, fines, probation, restitution and community service.

Role of Embezzlement Lawyers

Courts consider many factors before imposing a sentence. Embezzlement lawyers usually present circumstances to the court that will justify an alternative to imprisonment. Alternative sentencing could be possible in cases where convicted embezzler only acquired a small amount and there was no prior history of theft, larceny or embezzlement on his records.

Preventive Measures

To safeguard their property from possible fraudulent actions of employees, companies have introduced the use of cash registers to make sure that they will receive exactly the amount of gross sales made on a particular day. Further, various tasks are often given to different employees so as to create a checks-and-balances system within the working stations even in the absence of the owners.

Have you ever wondered how common embezzlement is? Just look at some recent New Hampshire headlines.

“Former NH accountant pleads guilty to embezzlement”

“Police: Manager siphoned cash from gas station”

“Embezzlement charge involves care for child”

“Cub Scout treasurer indicted on embezzlement charges”

Who Are These People?
Embezzlers come from all occupations, from the lowest paid clerk to the highest paid fiscal officer, and from the largest corporations to the smallest businesses. Why is it so prevalent?

Most embezzlers rationalize their behavior. Perhaps the wrongdoer doesn’t think he makes enough money or feels he is being over-worked. Maybe a mother feels the only way she can keep her family afloat is to dip into the business’ petty cash drawer occasionally. The fiscal officer overseeing large amounts of money makes himself believe that a little bit missing won’t be noticed.

This is the stuff from which fraud and embezzlement is committed. It has no social or business boundaries.

Persons holding positions of trust are usually the ones that commit this crime. Usually, these people are the last ones anyone would accuse. Trust is the one component that differentiates the crime of embezzlement from stealing.

What are the Embezzlement Statistics?
According to the National White Collar Crime Center, it is estimated that employee theft and embezzlement cost businesses and organizations $400 billion per year.

The FBI Financial Crimes Report to the Public estimates that financial crimes account for approximately thirty to fifty percent of all business failures.

The recently published Marquet Report on Embezzlement highlights statistical data on the 416 major embezzlement cases (theft of over $100,000) in the United States in 2009. The report shows that New Hampshire had five major cases in 2009, and has one of the highest loss ratios in the country at 1.69%. Based on various indicators, the report defines loss ratios as those greater than 1.0, showing that these states in the U.S. have a “greater loss propensity from major embezzlement cases than expected.”

In most U.S. states, embezzlement is a felony. New Hampshire is one of those states who consider it a felony when the amount exceeds $1,000.
As the statistics indicate, embezzlement is prevalent in today’s workplace. Consequently, more sophisticated education is being given to businesses and organizations so that owners and managers can detect the kinds of behavior that might signal workplace theft and fraud.

New Hampshire’s punishment for embezzlement is very stringent. Because charges of fraud and embezzlement are so serious, people who feel their employer is watching them, or those that have been accused of this crime, need to seek the counsel of a professional and experienced embezzlement attorney immediately.