Embezzlement is the fraudulent taking or fraudulent conversion of personal property of another with which one has been entrusted, especially as a fiduciary and whose fraudulent conversion has been made punishable by statute. Unlike larceny and false pretenses, the criminal intent for embezzlement arises after taking possession. Embezzlement can occur irrespective of the fact whether the defendant keeps the personal property or transfers it to a third person.
Under the early English statute, embezzlement was a misdemeanor, but under most modern American statutes it is either a felony or a misdemeanor. Whether embezzlement is a felony or a misdemeanor depends upon the value of the property so converted.
Embezzlers come into possession of property legally, but fraudulently convert it. If an embezzler intends to return the property later, charges of embezzlement can be levied. In order to prove a case of embezzlement, the following points should be considered:
- There should be a fiduciary relationship between the defendant and the aggrieved party;
- It should be through such a relationship that the lost property came into defendant’s possession;
- The defendant should have fraudulently assumed ownership of the property or transferred it into the ownership of another; and
- The property should have been intentionally misappropriated.
Examples of embezzlement include a clerk handling large sums of money embezzling cash from his/her employer, a lawyer embezzling funds from the client’s trust accounts, and a spouse embezzling funds from his/her partner. Embezzlement is a crime against ownership and it requires a substantial interference with the true owner’s property. Usually, embezzlement is discovered by way of circumstantial evidence. An obvious way to deter embezzlement is to regularly and unexpectedly move funds from one entrusted person to another when the funds are supposed to be available for withdrawal or use.