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Understanding Embezzlement

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Do you know what embezzlement is? Embezzlement is a white-collar crime that many people have heard of, but few people understand what exactly it means. You may have a vague idea of large sums of money and high-powered CEOs going on trial, but beyond the sensationalist view we get from the media, pinpointing what embezzlement involves can be a challenge for most.

Below we answer the question, “what does embezzlement mean?” and give an example. Keep reading.

What Does Embezzlement Mean?

In New York, embezzlement is classified as a type of larceny. Under New York PEN § 155.05, “a person steals property and commits larceny when, with the intent to deprive another of property or to appropriate the same to himself or a third person, he wrongfully takes, obtains, or withholds such property from an owner thereof.”

Embezzlement occurs when a person takes funds that have been entrusted to them and then misappropriates those funds for their own gain.

Embezzlement can also be defined as a breach of fiduciary duty or responsibility by the person charged with managing the funds. For example, if someone were to take the funds entrusted to them for business purposes and then use them to buy a boat, this would qualify as embezzlement.

Common examples of embezzlement include:

  • Misuse of company or corporate credit cards
  • Stealing cash
  • Making unauthorized transactions
  • Overcharging or overbilling customers and pocketing the difference
  • Cashing customer checks into a personal account
  • Creating fake invoices or fake vendor payments
  • Diverting company funds to personal accounts
  • Making fraudulent expense reports

Embezzlement can happen at all levels and involve both small and large funds. For example, if a cashier steals cash from a register, this is considered embezzlement. So, too, is when an executive of a major company steals millions of dollars from the company he works for.

A Famous Example of Embezzlement

Ponzi schemes are one of the most famous types of embezzlement, with the Bernie Madoff case being perhaps the most famous of all embezzlement cases. A Ponzi scheme is a scam in which people are tricked into investing in a non-existent enterprise (such as an investment opportunity) that promises significant returns. Money from new investors is used to pay earlier investors, giving the illusion to earlier investors that the scam is real. Ponzi schemes eventually collapse when there are no new investors from which to gain investments.

Bernie Madoff was convicted of embezzlement after he ran the largest Ponzi scheme in history, ultimately defrauding investors of billions of dollars. Telling people that they were partaking in an investment strategy, he falsified trading reports to convince clients they were making a profit on non-existent investments. He was convicted in 2008, sentenced to 150 years in prison, and forfeited $170 billion in assets.

NYC Penalties of an Embezzlement Charge

In NY, criminal conviction penalties for embezzlement are frequently based on the amount of stolen money or property. The type of property stolen and who the victim was may also have an impact on embezzlement conviction penalties. For example, if property valued at over $1,000 is stolen, the alleged perpetrator will face a grand larceny charge in the fourth degree. In comparison, in cases where property valued at over $1,000,000 is embezzled, the alleged perpetrator will face grand larceny in the first degree.

Embezzlement conviction penalties in New York may include the following:

  • Thousands of dollars in fines
  • Extensive jail time
  • Victim restitution

What to Do If You Are Facing Embezzlement Charges

Prosecutors are notoriously aggressive when pursuing embezzlement cases, and frequently, they will request the maximum penalties. Consequently, if you have been arrested (or believe you are under investigation) for embezzlement, you should seek counsel from an experienced, qualified criminal defense attorney like ours at Foley Griffin.

To schedule a consultation, contact our law firm online.

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