Embezzlement
An accusation of theft is not just a letter to HR. It’s an earthquake. One phone call from an investigator, a visit from an FBI agent, or a notification from the district attorney can, in an instant, jeopardize your freedom, your finances, and your entire professional reputation built over years.
You are in this position not because you were caught red-handed in a burglary. You are accused of something that the legal system considers far more insidious: a breach of trust, especially when embezzlement occurs. This is a crime based on abuse of access to personal property.
You, as an employee, manager, financial director, or partner, along with other employees, were entrusted with the keys to the kingdom—be it the company’s bank accounts, client funds, goods in the warehouse, or financial statements. Now the state claims that you used this trust for illegal personal enrichment, leading to potential embezzlement charges, as embezzlement involves the misuse of entrusted funds.
If you are an employee of a company involved in a legal matter or embezzlement charges for personal use, especially those involving financial institutions, the Department of Justice and federal law, and other financial crime cases, contact us!
What is embezzlement?
In the US legal system, criminal law classifies how embezzlement cases differ. It is not a separate crime with a single name, but rather a specific type of theft defined by one key factor: fiduciary relationships between two parties, which often categorize this act as a financial crime.
The legal definition of embezzlement is the unlawful and fraudulent misappropriation of another person’s property, often referred to as fraudulent conversion. That’s done by another person to whom this property was lawfully entrusted, highlighting the importance of lawful possession.
Let’s break this down.
The entrusted property is the core of the accusation: you did not break into the safe; you were given the key. You had lawful access and possession of the assets as an accountant, treasurer, or financial advisor. A critical element of embezzlement involves committing an act contrary to the owner’s property rights, for example, spending the money, selling the shares, or transferring the funds to your personal account.
The most important condition is fraudulent intent, which is one of the four factors that the prosecution must prove. The prosecution is obligated to prove that you acted not out of negligence, but with a conscious intent to deceive and enrich yourself.
To commit a crime, physical possession is not required. It is enough to have access or exercise substantial control, like the right to sign checks, a password to the banking client, or administrative rights in the accounting system, which involves embezzlement. Assets can be anything: from cash and goods to stocks, intellectual property, client data, and even trade secrets.
Federal charges vs state charges
Theft can be investigated at both the state and federal levels, which is crucial for your defense. State charges, which can result in felony charges and serious criminal penalties, are the most common scenario related to financial institutions, where you are convicted by the local district attorney under your state’s penal code according to state law (for example, California Penal Code § 503).
Penalties for Theft and Embezzlement differ. Embezzlement and stealing are separate crimes, and each is subject to different penalties depending on its severity. Federal charges arise when a case involves federal interests, especially when dealing with public funds. The investigation is done by the FBI, IRS-CI (Criminal Investigation), or the Secret Service under various federal statutes, and the prosecution is handled by a U.S. Attorney (AUSA). This occurs if the embezzlement is related, for example, to bank fraud (18 U.S.C. § 656, if you are a bank employee) or theft from ERISA pension funds, which can lead to significant fines and imprisonment. The charges also become federal if embezzlement of U.S. government funds, including embezzled funds, is documented or if mail and electronic communication were used to commit fraud (Mail Fraud / Wire Fraud), which can also include money laundering.
The severity of the accusation almost always depends on the monetary value of the stolen item. This characteristic divides crimes into Misdemeanor, if it concerns a small amount, and Felony, if the value exceeds the threshold established by the state, which determines the specific criminal penalties related to money. A felony, which can include larceny, is a serious crime that entails punishment in the form of imprisonment or jail time for a term exceeding one year.
Theft rarely looks like one big transaction. More often, it is death by a thousand cuts. The schemes we regularly observe and protect against include illegal activities such as systematic expense inflation, which can constitute a criminal offense, creating ghost employees on payrolls, or supplier fraud through shell companies, which may relate to the defendant’s actions. They also encompass the direct use of corporate cards to pay for personal vacations or gambling, skimming cash before it is accounted for, and complex stock manipulations to siphon off assets, which can also be tied to money laundering.
Why an accusation of embezzlement is a professional apocalypse
Many defendants make the mistake of focusing only on one question: Will I go to prison? They often overlook the importance of reasonable doubt in their case. The truth is that for a professional, prison is just one of three devastating legal consequences.
1. Criminal punishments: Freedom and money
This is a direct threat. Depending on the severity and jurisdiction, you face imprisonment ranging from several months to many years in federal prison, where courts adhere to strict Federal Sentencing Guidelines. Additionally, you will face massive monetary fines for any personal expenses incurred, which at the federal level can reach $250,000 or double the amount of money stolen, which could permanently deprive you of your financial stability.
Finally, you will be assigned Restitution—mandatory compensation for the full damage to the victim. This debt is typically impossible to discharge even through bankruptcy, making it essential to hire a criminal defense lawyer.
2. Professional collapse
For managers, financiers, and licensed professionals, this is often scarier than prison. A guilty verdict is the end of your career as you know it and leads to significant reputational harm. This is a real pain point for our audience, and the consequences here are catastrophic, especially when the motive is perceived as personal gain.
The consequences for your career and reputation can be summarized in the following points related to the potential criminal charges related to white collar crime :
- Loss of professional licenses: You will not be able to work. The State Board of Accountancy will almost certainly revoke your CPA license for a crime of moral turpitude; lawyers face disbarment; and FINRA and SEC will revoke financial advisors’ licenses (Series 7, 66) and ban them from working in the securities industry.
- Reputational damage: An accusation of theft is a scarlet letter in the business world; you become toxic.
- Inability to gain employment: You will never again be able to hold a position of trust (position of trust) and will not pass any security clearance (background check) for a financial or managerial position.
It is worth mentioning the Sarbanes-Oxley Act (SOX) separately. This federal law, adopted after the Enron scandals and emphasized by certified fraud examiners, introduced criminal liability for executives (CEO, CFO) who knowingly certify false or misleading financial statements, highlighting the main difference between corporate fraud and other forms of financial misconduct.
How we build your protection against theft
When state investigators or federal agents (FBI, IRS) are working against you, hoping that everything will resolve itself is a disaster. You need an experienced criminal defense lawyer specializing in white-collar crime who will immediately begin building your shield against criminal charges for a long period during the investigation.
Our work begins long before the courtroom. We immediately request all case materials from the prosecution, but we don’t stop there. We conduct our own independent investigation, often involving forensic accountants, to find discrepancies, procedural errors, and gaps in the prosecutor’s case, which may relate to a person in your job description.
Our first order to you will be: Say nothing. You have the right under the Fifth Amendment not to testify against yourself. We will handle all communication with investigators, protect you from self-incrimination, and monitor the legality of any searches where embezzlement occurs.
We know how prosecutors (DA and AUSA) think. We negotiate from a position of strength, striving to achieve the best outcome in cases of illegal activities, whether it’s a complete dismissal of charges if the evidence is weak or a pretrial resolution that avoids a conviction. In other cases, we fight for reclassification of charges from a felony to a misdemeanor or reach a favorable Plea Bargain if the evidence is indisputable.
Key Strategies of Defense in Theft Cases
Here are the main legal strategies we use to protect our clients, including strategies focused on proving embezzlement:
- Lack of intent. This is the most powerful and common defense. We prove that what happened was an honest clerical error, not intentional fraud. The prosecution must prove that you acted with malicious intent. We provide evidence to the contrary, for example, that you accidentally used the corporate AMEX card because it looks just like your personal one, or made a mistake in QuickBooks. This is negligence, but not a criminal offense.
- The presence of permission: You do not deny the transaction, but prove that you had permission for it (or you genuinely believed that you had it). We are seeking evidence (such as emails or memos) that your management approved this action. For example, the CEO told you to buy a good gift for a client, and you acted within what you think is your authority.
- Challenging the evidence and the amount. We are attacking the foundation of the prosecution’s case — their numbers. We are involving our forensic accountant to review the prosecutor’s audit. We are looking for errors in the calculations. For example, the prosecution calculated $120,000 (felony), but our expert proved that the actual disputed amount is $10,000. This not only weakens the case but could also reduce it to a misdemeanor.
- Action under duressYou acknowledge that you committed the actions, but claim that you had no choice. This defense is used when you acted under immediate threat or pressure. For example, your boss ordered you to process a fictitious invoice, threatening to fire you under an article and ruin your career. In this case, the criminal intent belonged to your boss, and you were merely an instrument.
Your next step: Don’t wait. Defend yourself.
An accusation of theft is not a problem that will disappear on its own. The longer you wait, the more time you give the prosecution to build a case against you involving embezzled funds, especially in such cases.
Do not make these critical mistakes: do not talk to investigators, the FBI, or the police; do not attempt to correct or delete accounting records, which in itself is a federal crime (obstruction of justice); and do not discuss the case with colleagues or management within your company. Your first and only call should be to a lawyer, especially if your involvement might include issues related to payroll checks.
Contact our firm for an immediate, 100% confidential evaluation of your case. We will analyze your situation, assess the warning signs and risks you are facing regarding your assets, and outline the first steps to build your defense, including strategies for preventing embezzlement and strengthening internal controls.
