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Nature of Possession

Any person who wrongfully and fraudulently uses, disposes of, conceals or embezzles any money, which he/she shall have received from another or by virtue of his/her office, trust, or employment, or which shall have been entrusted or delivered to him/her by another, shall be guilty of embezzlement.

In order to support an embezzlement conviction, the reasonable inferences fairly deducible from that evidence must support each and every element of the offense of embezzlement.  The state must prove beyond doubt that the accused wrongfully appropriated to his/her benefit property entrusted or delivered to the accused with the intent to deprive the owner thereof.  The state must also prove that the defendant had the specific intent of depriving the rightful owner of property entrusted to him/her[i].

The general rule is that where the crime charged involves guilty knowledge or criminal intent, it is essential to the criminal liability of an officer of a corporation that he actually and personally did the acts which constitute the offense, or that they were done under his direction or with his permission[ii].

Embezzlement is different from the crime of false pretenses.  The critical distinction between embezzlement and false pretenses is not the presence or absence of a position of trust or confidence, but rather whether the property at question was initially obtained lawfully or unlawfully, i.e., with the intent to defraud[iii].

The state must prove that the defendant was entrusted with lawful possession of the property prior to its conversion and there existed a fiduciary relationship between the victim and the perpetrator to convict a person for embezzlement.  However, the state need not establish the existence of a formal or technical fiduciary relationship[iv].  What is required is the proof of the existence of a relation of trust and confidence or that of a trust or agency relationship.  Thus, conversion of property delivered by mistake will not amount to embezzlement since there is no element of trust or confidence[v].  An  agent, servant, or bailee who wrongfully takes possession of the money and converts it to  his/her own use is guilty of embezzlement since the court will presume the requisite fiduciary relationship held by persons in such capacities.

Embezzlement requires the wrongful appropriation of the property of another rather than one’s own property[vi].  The person whose property is embezzled need not have absolute title. A qualified ownership with the right to possess and control the property suffices[vii].  Once the crime of embezzlement has been committed, the accused cannot escape liability by assigning the ownership of the converted property to another.

However, a trustee who holds legal title in a fund while others have a beneficial interest can commit embezzlement[viii].  Similarly, a co-tenant can embezzle money owned under a co-tenancy.

The physical possession of the converted property by the defendant is not necessary to prove embezzlement.  If it showed that the accused had intent and capability to maintain control and dominion over the converted property, such person shall be deemed to have constructive possession of the property[ix]. Thus, actual control and possession are not required, especially in the case of embezzlement of public money.  A person can easily commit embezzlement if the money or property is under the person’s direction and management[x].

[i] Waymack v. Commonwealth, 4 Va. App. 547, 549-50 (Va. Ct. App. 1987)

[ii] Bourgeois v. Commonwealth, 217 Va. 268, 274, (Va. Ct. App. 1976)

[iii] State v. Murphy, 152 N.C. App. 335, 344 (N.C. Ct. App. 2002)

[iv] Rooney v. Commonwealth, 27 Va. App. 634, 644-645 (Va. Ct. App. 1998)

[v]McAllister v. State, 97 Okla. Crim. 167 (Okla. Crim. App. 1953)

[vi] U.S. v. Taylor, 867 F.2d 700 (D.C. Cir. 1989)

[vii] Commonwealth v. Morrissey, 540 Pa. 1 (Pa. 1995)

[viii] Taylor, 867 F.2d 700

[ix] State v. Weaver, 160 N.C. App. 613 (N.C. Ct. App. 2003)

[x] U.S. v. Chapman, 690 F.2d 150 (8th Cir. 1982)

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