Embezzlement is probably the most common form of Federal white-collar crime. Federal Embezzlement involves the allegation that someone in a position of trust or with a fiduciary (financial) duty to another intentionally took money or property from that person for his own purposes without permission or authority to do so. Federal criminal defense attorneys and white collar defense lawyers often see these positions of trust and fiduciary relationships occurring in a variety of businesses, industries and organizations. An individual is often given control or access to another person’s or business’ money for the purpose of monitoring, managing or using the money or property for the benefit of the other party. Sometimes that control becomes criminal – such as the case of “Ponzi” schemes, fraudulent billing, the filing of false records, among many others. However, on many occasions, innocent people of all walks of life can be accused of embezzling funds or taking property such as a company’s computer or trade secrets – including clerks, bank tellers and employees, supervisors, accountants, lawyers and even owners of a company. Whether charged in New York State or Federal court, Embezzlement is a serious offense punishable by many years in prison and hefty fines.What are the Elements of Embezzlement?
In Federal court, Embezzlement is typically prosecuted as Mail, Wire, Securities, or Bank Fraud. Many states have a particular Embezzlement statute.
- Wire Fraud: Title 18, United States Code, Section 1343
- Mail Fraud: Title 18, United States Code, Section 1341
- Bank Fraud: Title 18, United States Code, Section 1344
- Security Fraud: Title 18, United States Code, Section 1348
- Federal Conspiracy Crimes
- Federal White Collar Crimes
- New York State Embezzlement & Grand Larceny Crimes
As a general principle, the crime of Embezzlement has four elements:
(1) There must be a position of trust or a fiduciary relationship between the two parties;
(2) The defendant must have acquired the money or property while in the position of trust or during the course of the fiduciary relationship;
(3) The defendant must have taken the money or property for his (or someone else’s) benefit, and not for the benefit of the other party; and
(4) The defendant must have acted intentionally, meaning that it was his conscious aim and objective to violate the fiduciary duty or position of trust and take the money for his own benefit.What is a Position of Trust or Fiduciary Relationship?
These terms are not specifically defined in the Federal criminal law; however, they are applied frequently:
Under the Federal Sentencing Guidelines these terms refer to anyone who exercises professional or managerial discretion. Such a person typically will have substantial discretionary judgment that is given considerable deference. People in such positions usually are subject to significantly less supervision than others whose responsibilities are primarily non-discretionary. For example, under the sentencing guidelines, an attorney serving as a guardian who embezzles a client’s funds, a bank executive’s fraudulent loan scheme, or an accountant who steals money from a company’s accounts receivables would all be held to have violated their positions of trust and their fiduciary duty.
Under the Federal Securities Fraud or Insider Trading law, an “insider” does not have to be an employee of the company or entity whose security is being traded. An “insider” is anyone who has a fiduciary duty to the entity based upon his knowledge of material non-public information. This duty “passes on” to anyone that is told or overhears material non-public information by an “insider.” So, if a person hears his neighbor talk about material non-public information and makes a trade of securities based upon that information, that person can be held liable for insider trading (both criminally and civilly) even though they never worked for the company. Basically, the fiduciary duty is “transferred” to anyone who obtains the material non-public information from someone with a fiduciary relationship to the entity.
For purposes of other fraud statutes, it could include anyone who, based upon their position, job, or relationship, has been entrusted in some way with someone else’s money – such as a bank teller, hotel clerk or toll collector.What are the Penalties for Embezzlement?
As noted above, there is no specific crime of Embezzlement in the Federal criminal law. It is typically prosecuted through the use of the mail, wire, securities and bank fraud statutes. Those crimes typically allow for a sentence of up to 20 years in prison and a $250,000 fine.
- The Federal Court Process from Arrest to Potential Sentence
- Understanding the Federal Arrest Process: The Importance of Knowledgeable Counsel
- From Witness to Target: Potential Exposure & Consequences of a Federal Investigation
No matter the stage of a fraud or Embezzlement proceeding – whether an agent just came to pay you a visit, they executed a search warrant, you received a subpoena or have been arrested – the experienced, former prosecutors, of Crotty Saland PC can help you navigate the mirky waters of the criminal justice system. The potential penalties, including prison and six figure fines, can ruin the life and take away the liberty of an otherwise law abiding individual. Make sure you have proper representation from a skilled Federal criminal defense attorney. Protect yourself and your future. Contact the Federal Embezzlement defense attorneys and former Federal and New York prosecutors at Crotty Saland PC and let experience, knowledge and advocacy work for you.
Call the Federal criminal lawyers and former prosecutors at (212) 312-7129 or contact us online today.