Embezzlement is a crime involving fraudulent misappropriation of assets by a person or persons to whom it had been entrusted. It is a fraudulent conversion of property that legally came to the hands of a defendant pursuant to a fiduciary relationship.
The main elements of embezzlement are:
· A criminal intent;
· Fraudulent conversion of a property; and
· Failure to pay over money
Even though the statutes defining embezzlement do not make criminal intent essential, it is an essential element nonetheless. An indictment must charge the embezzler with criminal intent to knowingly convert or wrongfully deprive another of possession of property[i].
Embezzlement consists of a defendant’s conversion of another’s funds which is in his/her possession in a fiduciary capacity. The crime of embezzlement is complete when there is a fraudulent conversion of property/funds without the owner’s consent[ii]. Conversion occurs when a person entrusted with another’s property, treats that property as his/her own and uses it for their own purpose. Embezzlement occurs when a person comes into lawful possession of another’s property and later fraudulently converts the property to his/her use.[iii]
When a defendant fails to account and pay over funds coming into his/her hands in a fiduciary capacity without good cause, it may be treated as embezzlement. If the defendant is not able to prove any approval given to him/her to use the funds in the way the defendant did, then s/he would be liable for embezzlement of the funds[iv].
Demand by the owner of the money may or may not be a required element. A demand by the owner is not a necessary element to constitute embezzlement if the statute does not make it a requirement[v].
In certain states, to enter a conviction for embezzlement, it must be proven that the embezzler was entrusted with the property of another. A mere debtor-creditor relationship is an insufficient basis for a conviction of embezzlement[vi].
The crime of embezzlement and the crimes of money laundering have no inherent connection. They are separate offenses and not part of one continuous offense[vii].
When the issue is with regard to acquisition of the same property, courts have generally held that the crimes of fraud and embezzlement do not overlap, that they are mutually exclusive[viii].
[i] United States v. Croft, 750 F.2d 1354 (7th Cir. Wis. 1984).
[ii] People v. Riggins, 13 Ill. 2d 134, 1958 Ill. LEXIS 244.
[iii] State v. Hornbeck, 143 N.M. 562 (N.M. Ct. App. 2008).
[iv] State v. Ditzel, 77 Wyo. 233, 1957 Wyo. LEXIS 20.
[v] State v. Ensley, 177 Ind. 483 (Ind. 1912).
[vi] Dove v. Commonwealth, 41 Va. App. 571, 574 (Va. Ct. App. 2003).
[vii] United States v. McCarthy, 271 F.3d 387 (2d Cir. N.Y. 2001).
[viii] State v. Hornbeck, 143 N.M. 562 (N.M. Ct. App. 2008)