Embezzlement Often Starts Small, But It Can Quickly Become a Major Legal Problem

Embezzlement often isn’t something people plan for or even expect to be caught up in. Many individuals find themselves in these situations because of a moment of financial desperation or pressure. It often begins with something small—perhaps an employee needs a quick “loan” and decides to take a little money from their company, fully intending to pay it back. It might seem harmless at first, but the ease of accessing the money leads to that itch to do it again. After all, it was so easy before, so why not? Before long, what started as a one-time act spirals into a regular practice, and could end up totaling thousands or even millions of dollars.

If this sounds familiar, you’re not alone. It’s easy to fall into the trap of thinking that a little bit of money here and there won’t make a difference, but it’s a much different story when the company discovers the theft, or worse, the government gets involved. Many individuals convicted of embezzlement regret that they didn’t stop after the first time, realizing far too late that those small, seemingly insignificant actions evolved into a major legal issue. 

What is Embezzlement?

The criminal act of embezzlement is a white-collar crime involving the theft of property or money by an employee from their place of work and/or employer. White-collar crimes, such as money laundering or most types of fraud, are usually non-violent in nature but typically involve large sums of money or extensive resources.

Embezzlement has specific “badges” which define it:. 

• There must be a fiduciary interconnection between the embezzling perpetrator and the rightful owner of the stolen goods, like an employee and their employer. This element is what distinguishes embezzlement from simple theft. 
• The property holder passed control or authorized the monitoring of property/funds over to the criminal offender by intentionally, not accidently, delegating it. This aspect establishes the intent behind providing access to financial accounts or assets as one of purposeful trust, implying a duty to safeguard the funds.
• There was criminal intent behind the embezzlement. This is an important component as it protects those accused of embezzling who acquired the stolen goods by accident or unknowingly.

An embezzlement crime may be prosecuted at the state or federal levels. If it involves the transfer of funds through interstate commerce, for example by wiring money from bank-to-bank, it is a federal offense. Also, embezzlement that occurs within a company with offices or operations in several states may be considered a federal crime. 

How Embezzlement Often Occurs

Embezzlement typically involves someone with access to company accounts—bookkeepers, accountants, payroll clerks, or executives. One common form is when individuals transfer money to their personal accounts or write checks to themselves that they are not owed. These brazen actions are tough to defend because the theft is clear-cut. The person had access to company funds and made an unauthorized withdrawal.

Another form of embezzlement is more complex and involves setting up fraudulent companies that mimic a real business name. For example, an employee creates a fake company with a name that closely resembles a vendor or supplier of the employer’s, then siphons funds from the legitimate business into their own fraudulent entity. A similar scheme involves setting up companies with the same name as foreign vendors to carry out these embezzlements. 

What Are the Punishments for Embezzlement Charges?

Embezzlement charges come with serious consequences, which can include significant jail time and fines. Defendants are also required to pay restitution to the company which suffered the loss. Companies are also able to pursue separate civil legal actions to reclaim the lost funds, which puts personal assets at risk.

Some punishments extend beyond the courtroom. Having an embezzlement conviction on your record can make it difficult to find a job, especially in any position involving managing money. If you’re an entrepreneur or business owner, the conviction will likely damage your reputation and make it difficult – if not impossible – to obtain a position of trust or a professional license.

Fight Back Against Embezzlement Charges

A successful defense typically involves analysis of the transactions and company records with the assistance of forensic accountants to reconstruct the financial details. At The Law Offices of Barry M. Wax, our legal team will examine your case thoroughly to bring the most effective defenses available. Our goal is to fight for the best possible outcome and defend your rights. If you are facing embezzlement charges or suspect you might be soon, contact our office in Miami to discuss your situation and the legal strategies available to you.