Under 18 U.S.C.A. § 641, it is a crime to embezzle a record, voucher, money, or thing of value of the United States or of a federal department or agency or to embezzle property made or being made under contract for the United States or for a federal department or agency.
The following is a non exclusive list of the kinds of property subject to embezzlement: money and checks, parts of a building, a rented automobile, parts of a truck, personal services and any property belonging to the United States can be the subject of embezzlement. The property of the United States may include property belonging to the various federal agencies and programs or interstate commerce and those received by the public officers in their official capacity.
However, courts have held that funds deposited in a bank for the principal or employer are not subject to embezzlement since embezzlement occurs when the defendant wrongfully appropriates to his/her own benefit property entrusted to him/her by the plaintiff. Viewed from this perspective, money deposited in a bank for the benefit of a principal or employer is considered intangible property, which cannot be embezzled. On the other hand, funds deposited in a bank generally constitute tangible property subject to embezzlement. This is because, the intangible nature of the depositor’s money becomes a tangible sum of money when a check drawn upon the depositor’s account is presented for payment.
There is some difference of opinion among various jurisdictions regarding the nature of real property as a subject of embezzlement. While some statutes hold that real property may be the subject of embezzlement, some others expressly bar such construction. Courts have also held that real property is not subject to embezzlement under a federal statute proscribing embezzlement by an officer because embezzlement is limited to items of personal property[i].
In order to be the subject of embezzlement, the property must have at least some nominal value. Thus, a credit card can be the subject of embezzlement. However, the exact proof of value is not necessary to convict a person for embezzlement. Anything of value cannot be embezzled and a “thing of value” includes both tangible and intangible property and includes services[ii].
Federal law also prohibits the embezzlement of a record, voucher, money, or thing of value of the United States or of a federal department or agency or to embezzle property made or being made under contract for the United States or for a federal department or agency[iii]. The act of purposefully receiving, concealing, or retaining embezzled property with a specific intent to convert it to personal use is also an offense under federal law[iv].
Public funds cannot be embezzled by officials as well as individuals and the term public funds includes a variety of property or assets in the nature of public credits. However, this does not include money intended to be contributed to public funds unless the public authority has taken some steps for the acceptance or ratification of such money.
The term public funds encompasses witness and juror fees and money collected with respect to judgments, a draft drawn upon funds under the control of a disbursing officer of the treasury, an indemnity fund paid by foreign governments on various accounts and collected by the State Department, sums collected as privilege sales taxes in excess of what was due and money received by a public officer in his/her official capacity.
However, fictitious tax-anticipation warrants, surplus fees and emoluments collected in excess of those authorized by law, interest on public money, and taxes collected contrary to statute upon unassessed property will not fall under the category of public funds.
The issue of whether the funds constitute the property of the United States depends upon the federal government’s control over the ultimate disposition of such funds[v].
For instance, in a case, the Department of Housing and Urban Development transferred funds to the city housing authority for rent subsidies. The funds were received by a nephew of the city housing authority’s chairman, pursuant to a fraudulent arrangement in which he concealed the chairman’s illegal receipt of subsidized rent payments. While upholding the nephew’s conviction for theft of money of the United States, the court held that the money constituted public funds because the federal government retained considerable control over the disposition of the funds, notwithstanding the transfer, through its restrictions on landlords and local agencies[vi].
[i] 18 U.S.C.A. § 657
[ii] United States v. Croft, 750 F.2d 1354 (7th Cir. Wis. 1984)
[iii] 18 U.S.C.A. § 641
[iv] U.S. v. Burton, 871 F.2d 1566 (11th Cir. 1989)
[v] U.S. v. McIntosh, 655 F.2d 80 (5th Cir. 1981)
[vi] U.S. v. McKay, 274 F.3d 755 (2d Cir. 2001)