What is Embezzlement?

January 08, 2023

Embezzlement is a white-collar crime that involves a person misusing the property that has been entrusted to them. It is a type of larceny but differs from typical theft because the perpetrator was granted control over the property due to their employment or another arrangement with the victim, so it involves a significant breach of trust.

In South Carolina Embezzlement is referred to as Breach of Trust with Fraudulent Intent under SC Code § 16-13-230 and can carry up to ten years in prison.

The relationship between the victim and the defendant is crucial in an embezzlement case. If a banker steals money from someone’s wallet, it is not embezzlement. However, if they use their privileged position as a bank employee to transfer money from a victim’s account into their own, it qualifies as embezzlement.

An embezzlement conviction can come with severe penalties. Unfortunately, even the accusation of embezzlement can be detrimental to one’s career and reputation. It’s vital to vigorously refute any false claims of embezzlement before they can cause irreparable damage to your life. A skilled criminal defense lawyer can help you protect your interests and fight against all charges of wrongdoing. Read on to learn more about embezzlement and frequently used defenses.

What Are the Four Elements of Embezzlement?

Under federal law, four specific elements must be present for an act to be considered embezzlement:

  • A financial relationship between the perpetrator and the victim: When an individual or entity relies on or trusts another individual to oversee their finances, valuables, or property, they enter into a fiduciary relationship. This relationship must go beyond merely handling cash. For example, a customer does not have a fiduciary relationship with a gas station clerk. Instead, embezzlement often involves people who manage funds, invest savings, or perform similar acts.
  • Gaining access to property through the fiduciary relationship: Embezzlers utilize their employment or position of trust to access the funds or other property.
  • A conversion or transfer of the property to the perpetrator or a third party: Simply having access to the property does not qualify as embezzlement. It becomes a crime when the individual moves the money or property without consent to benefit themselves or others. Concealing the property from the owner or destroying or disposing of it could also be considered embezzlement.
  • An intent to defraud the victim: Honest accounting mistakes or miscommunications about financial transactions are not considered embezzlement. The perpetrator must have intentionally performed the action while realizing that it would deprive the victim of their property.

is It Still Considered Embezzlement if the Individual Returned or Intended to Return the Funds?

Because the intent to deprive someone else of their property is a key factor that determines whether an action qualifies as embezzlement, it may seem that claiming you intended to return the property would be a valid defense. However, this is not the case. The law does not state that the deprivation of property must be permanent to be illegal, so even if it is only taken or “borrowed” for a short time, it is still in violation of the law. For example, if an investment broker used their client’s money to purchase stocks for themselves and then paid the money back after selling the stocks for a profit, they could still be charged with embezzlement.

Can Embezzlement Lead to Federal Charges?

If a person is accused of embezzling from an individual, corporation, trust, or similar private entity, they will likely face state charges for the alleged crime. Every state has its own laws regarding embezzlement and the penalties perpetrators face if convicted. Based on these laws, it may be a misdemeanor or a felony. In general, as the value of the property embezzled increases, so do the charges. There may also be increased penalties if the crime involved a major breach of trust or the victim was a vulnerable member of society.

Misappropriating public funds or government property can lead to federal charges of embezzlement. Many businesses and organizations, from nursing homes to school boards, receive government funding, and employees who misuse those funds can be subject to federal laws. Banks and other financial institutions are also federally regulated. Embezzlement convictions on this level can result in heavy consequences, including time in federal prison, large fines, and restitution to victims.

What Are Common Defenses Against Embezzlement Charges?

Embezzlement is a serious charge with potentially harsh penalties. However, anyone charged with a crime is innocent until proven guilty. Defense strategies used in embezzlement cases can include:

  • Insufficient evidence: If there is no clear evidence that the defendant personally misused the property or there exists a reasonable doubt that they did not embezzle, the charges may be dropped.
  • Lack of intent: A key factor in any embezzlement case is the intent of the accused. If they had good reason to believe that the property was theirs to use or the incident happened due to a genuine error or misunderstanding, the action no longer meets the criteria for embezzlement.
  • Duress: If someone has been coerced into embezzling by another person, such as an employer, they may claim that the actions were done under duress.
  • Legitimate business purposes: This defense is related to lack of intent and involves the defendant explaining why they believed their actions were justified and legal. For example, an employee may argue that using the company’s funds for travel expenses was legitimate because they were on business trips.

If you’ve been charged with embezzlement in Georgia or South Carolina, an experienced white-collar crime defense attorney can provide you with knowledgeable legal representation and build the strongest possible defense on your behalf.

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