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Pleas and Defenses

There are not much pleas and defenses available to an accused in the prosecution for a crime of embezzlement.  The few pleas/defenses available are: plea of lack of intent; entrapment; expiry of the limitation period; good faith belief; and plea of nolo contendere.

In prosecutions for embezzlement, the plea of nolo contendere has been accepted.  In this plea, the defendant will not contest the case.  S/he neither pleads guilty nor innocence.  It is the duty of the court to find the truth from the evidence put forth before it.  But it is pleadable only with the permission of the court[i].

An accused has the defense of limitation if the prosecution proceedings for the crime are not initiated within the period of limitation.  In certain states, the period of concealment of the embezzlement is not considered when calculating the limitation period.  However, mere silence does not amount to concealment.  There should be some positive acts from the part of the accused to prevent discovery of the embezzlement to constitute concealment[ii].  When there is a part payment of the embezzled amount, the period of limitation runs from the date of last payment[iii].  Usually the period of limitation runs at the time of the wrongful conversion or misuse of the money.  But if the embezzlement is a continuing one, the last act in the chain of acts would be taken.

The limitation period of the offense may also start from: the time of finding of the misappropriation, time when the embezzler uses the misappropriated funds, or from the time when the defendant could not account for the amounts entrusted upon him/her.  If in a jurisdiction there is no statute of limitation with regard to embezzlement, then the time offense was committed is not an element.  The state has the right to prove the offense any time before the indictment[iv].

The defense of entrapment is another plea available to an embezzler.  But if the plan of committing embezzlement was designed by the accused, s/he cannot raise the plea of entrapment[v].  To accept this plea it should be shown that the owner actively urged the accused to embezzle the asset.

The plea of absence of loss is not available in the case of embezzlement.  The fact that no loss has occurred to the owner is not an excuse to avoid prosecution[vi].  A defense that the loss could have been avoided if the victim had been diligent is not valid.

The return of the embezzled property does not clear the accused from criminal liability to the offense.  The offense of embezzlement is complete on the conversion of the asset by the embezzler.  The initial lawful possession becomes illegal on misuse of the asset.  Subsequent return or settlement would not release the liability of the accused.  An offer to return or intent to return is not a defense in the crime of embezzlement[vii].

An accused charged with embezzlement may show facts and circumstances from which it can be proved that s/he did not have the intent to misappropriate the alleged embezzled property.  A fraudulent intent to embezzle cannot be inferred when the property is retained by the accused without secrecy[viii].

An accused may raise a plea that s/he was not aware of the fact that the embezzled property belonged to another.  Instead, s/he believed under good faith that s/he had a right over the property.  Therefore, a defense of mistaken claim of right is available unless it is found that the belief of claim of right is unreasonable or improbable[ix].  If an accused retains a property of the employer under a belief that s/he has a right to keep it as compensation, it may not amount to embezzlement[x].  If the defendant has tried to conceal the taking, the defense of good faith is not available.  If an accused retains a property of the employer under a belief that s/he has a right to keep it as compensation, it may not amount to embezzlement[xi].

An embezzler cannot raise the defense of double jeopardy when s/he is charged for two or more offenses that are not identical.  For example, when an embezzler is charged with both larceny and embezzlement, the question of double jeopardy will not arise as the offenses of embezzlement and larceny are not identical. A person therefore may be prosecuted under both offenses[xii].  But further prosecution may not occur on the same transaction when a common verdict has been passed.

[i] Winesett v. Scheidt, 239 N.C. 190, 194 (N.C. 1954).

[ii] State v. Gainer, 227 Kan. 670 (Kan. 1980).

[iii] Mast v. Kinnard, 29 Kan. App. 2d 301 (Kan. Ct. App. 2001).

[iv] State v. Gregory, 191 S.C. 212 (S.C. 1939).

[v] State v. Lee, 640 So. 2d 270 (La.App. 3 Cir. Dec. 22, 1993).

[vi] United States v. Stockton, 788 F.2d 210 (4th Cir. Md. 1986).

[vii] United States v. Floyd, 882 F.2d 235 (7th Cir. Ill. 1989).

[viii] People v. Barrett, 405 Ill. 188 (Ill. 1950).

[ix] State v. Stenger, 122 Haw. 271 (Haw. 2010).

[x] State v. Hanna, 224 Ore. 588 (Or. 1960).

[xi] State v. Hanna, 224 Ore. 588 (Or. 1960).

[xii] Bolden v. State, 568 So. 2d 841 (Ala. Crim. App. 1989).

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