What is Embezzlement?

Embezzlement is a term used to refer to the theft or larceny of assets by an individual who is responsible for the management and protection of those assets. Assets here usually include property or money.

Embezzlement is quite common in corporate environments.

There are various types of embezzlement and the most common one happens to be accounting embezzlement, where records are manipulated to hide the embezzlement of monetary assets. The scenario typically involves offenders who were trusted with those very assets.

Large corporations often hire individuals to manage and protect their assets. In some cases, these individuals are also tasked with using the assets in the best interests of the owners (the corporations). However, some of these individuals exploit their position and misappropriate the assets for personal benefits. This is how embezzlement occurs.

Examples

A common example of embezzlement is the misappropriation of assets carried out by bank tellers and store clerks. There have been plenty of cases were store clerks or tellers purposely avoid accounting certain transactions and use these gaps to funnel in money into their own pockets.

As indicated earlier, embezzlement can happen with any property as well. For instance, some employees, who are authorized to supervise company property such as its machinery or other equipment, end up misappropriating it.

Embezzlers also have different approaches to embezzlement. Some choose to misappropriate a large amount all at once while others prefer to do it in small installments over time. There are other methods used as well and quite often, they are perplexingly creative. For instance, embezzlers have been caught fabricating everything from checks to even employees.

The 4 key factors

There are 4 key factors that define what constitutes an embezzlement.

  • Firstly, a fiduciary relationship must exist between the embezzler and the owner/corporation. The owner/corporation, in this case, is dependent on the embezzler.
  • Secondly, the embezzlers must have gained control of the property via his/her relationship with the owner.
  • Thirdly, the embezzler must have transferred ownership to himself/herself or to someone else.
  • Lastly, the actions of the embezzler need to be proven as being intentional.

Punishment

The punishment for embezzlement varies from state to state in the US and is often dependent on the value of the property stolen. In fact, there are specific categories such as “property below $500” or “property below $25000”.

Other than that, some states also look at the type of property. For instance, the embezzlement of certain chemicals carries harsh punishments irrespective of the quantity or the value of stolen chemical.