When a job involves being in control of money or something of value, it can be tempting to borrow some amount for a temporary emergency, or to take some money because the job does not pay what the employee thinks they are worth. However, even taking a small amount can spiral out of control, and land the individual behind bars facing federal embezzlement charges.
Embezzlement involves the fraudulent appropriation of property or money that someone has been intrusted with, to utilize it for their own benefit. It could be cash, company checks, jewelry, electronics, or even postage stamps. Embezzlement is different from regular theft because the person who takes the money or property generally has trusted and legitimate access to the valuables before they take them for their own use.
Embezzlement can take a variety of forms. It may range from a cashier simply taking a small amount of cash out of a cash register on a single occasion, to more sophisticated embezzlement schemes using phony vendors and invoices to steal millions of dollars over a period of years.
Federal Embezzlement Laws
Depending on the situation, embezzlement can be tried as a state or federal crime. Under federal law, embezzlement may be prosecuted as theft of public money or property, theft by government employees, or through theft of money from a bank or financial institution.
Whoever embezzles or converts for their own use any record, voucher, money or thing of value from any U.S. government agency or department can face up to 10 years in prison, and a face a heavy fine, in addition to repayment of any illegal gains.
Any officer charged with safe-keeping public money who converts it to their own use, is guilty of embezzlement, and can be sentenced to up to 10 years in federal prison.
Any disbursing officer of U.S. governmental agency or department who converts any public money to their own use is guilty of embezzlement. A conviction under this provision carries the possibility of up to 10 years in prison.
Any officer or employee of any U.S. government agency or department who embezzles or wrongfully converts money or property of another for their own use faces a fine, and up to ten years in a federal prison.
Fictitious vendor fraud generally involves an employee in a position where they can create, authorize or approve payments to vendors. An employee may set up a legitimate looking business, and create invoices from that business, submitting them to the company for work that was never done, or goods that were never provided. The company or employee will approve the payment and send it to fraudulent company. The employee will deposit the payment for their own use, in some cases using money laundering techniques to distance themselves from the cash.
Employees who engage in fictitious vendor embezzlement may start out converting small amounts of money, testing their scheme, and later get more ambitious, possibly taking millions of dollars before their fraud is ever detected.
In one example from Virginia, a man who worked as a manager at a hardwoods company allegedly stole $3.3 million over about 13 years through fake invoices from fictitious vendors. Another man in Ohio was charged with embezzling almost $9 million in his position as an accountant through a fictitious vendor scheme, over the course of more than 10 years.
There are specific provisions that apply to embezzlement from banks, credit unions or other financial institutions. Any bank officer, director or employee of a bank, lending, credit or insurance institution who embezzles any money, funds or credits in their care or custody may be facing federal banking embezzlement charges. If the total embezzled amount does not exceed $1,000, it may be charged as a misdemeanor. However, any theft in excess of $1,000 may result in a felony charge, with a fine of up to $1 million, and as much as 30 years in prison.
Discovery of Embezzlement
Depending on the individual, their job, and the type of theft, embezzlement can take years to discover, and in some cases may never be discovered at all. However, a number of red flags can alert an employer or company to possible embezzlement. This could include an employee living a lifestyle that appears beyond their means or having financial difficulties. Increased depletion of petty cash, a suspiciously low inventory of goods, an employee who is defensive about taking time off, or has too close of a relationship with some vendors may also put some employers on notice of a possible inside theft.
In some cases, discovery of the embezzlement will come from a tip from a co-worker or someone else who suspects the employee is taking money or property. Upon discovery of possible embezzlement, a company may conduct an internal investigation, or take the information directly to law enforcement.
Embezzlement Defense Lawyers
Federal law enforcement and agencies take embezzlement charges very seriously. If law enforcement or company auditors contact you regarding an embezzlement investigation, speaking to an experienced lawyer could help protect you from future liability. Cooperating with investigators is an important decision to make, and your federal embezzlement defense attorneys should advise you and represent you in any negotiations.
Federal embezzlement cases can be complicated, involving sophisticated accounting and auditing. Therefore, you need the lawyers who will meticulously comb over all of the evidence in the case, page by page, spreadsheet by spreadsheet - not just rely on what the prosecutor tells them you did. If you are facing federal embezzlement charges, you should contact criminal defense attorneys who have successfully represented clients accused of embezzlement. Simply hoping that everything will work itself out can have lifelong consequences, including the loss of your job and a felony record. Your experienced criminal defense lawyers will be able to identify the issues in your case, and fight to keep you out of jail, and defend your rights.