Legal Definitions - embezzlement

Embezzlement is a type of financial crime that occurs when a person fraudulently takes or misuses money or property that has been legally entrusted to them. This typically happens because of their job, a position of authority, or a special relationship of trust.

The key distinction of embezzlement from other forms of theft is that the person committing the crime initially had lawful possession or control over the assets. The criminal intent to steal or misappropriate the property develops *after* they have already been given access to it, rather than before or during the initial taking.

Here are some examples illustrating embezzlement:

• Corporate Bookkeeper: A bookkeeper for a small architectural firm is responsible for managing the company's bank accounts, paying vendors, and handling payroll. Over several months, the bookkeeper creates fake invoices for a non-existent office supply company and diverts thousands of dollars from the firm's operating account into their personal bank account.

  This is embezzlement because the bookkeeper was legitimately entrusted with access and control over the company's funds due to their position. Their act of creating fraudulent invoices and siphoning money for personal gain constitutes a misuse of assets they were authorized to manage.

• Investment Fund Manager: A manager of a private investment fund is responsible for investing the pooled money of multiple clients according to specific strategies. Instead of purchasing the agreed-upon securities, the manager secretly transfers a significant portion of the clients' funds into a shell company they own, using the money to purchase a luxury yacht for themselves.

  This illustrates embezzlement because the fund manager was entrusted with the clients' money and had a fiduciary duty to invest it on their behalf. By diverting these funds for personal enrichment, the manager fraudulently took property they were authorized to control for others.

• Community Organization Treasurer: The volunteer treasurer for a local youth sports league collects registration fees and manages the league's bank account, which is used to pay for equipment, field rentals, and uniforms. The treasurer regularly "forgets" to deposit a portion of the cash registration fees, keeping the money for personal use instead of allocating it to the league's expenses.

  This is an example of embezzlement because the treasurer was entrusted with the league's funds and had legitimate control over the cash collected. Their intentional failure to deposit the full amount and their appropriation of the funds for personal use demonstrate a fraudulent taking of property placed under their care.