Under Federal law, the crime of Embezzlement normally involves the taking of Government property by a person who is in a trust or fiduciary relationship with the Government if employee took it in the course of their own employment for their own use with the intent to deprive. The most specific definition was provided in the case of Moore v. United States, in which the Supreme Court defined Embezzlement as “the fraudulent appropriation of property by person to whom such property has been entrusted, or into whose hands it has lawfully come. It differs from larceny in that the original taking was lawful, or with the consent of the owner, while in larceny the felonious intent must have existed at the time of the taking.”
Per 18 USC 666(A)(1)(a) The Government must establish the following specific elements to establish Embezzlement:
- There was a trust or fiduciary relationship between the Defendant and the private organization or Governmental agency;
- The property came into the possession or care of the Defendant by virtue of his or her employment;
- The Defendant’s dealing with the property constituted a fraudulent conversion or appropriation of it to his or her own use; and
- The Defendant acted with the intent to defraud the owner of the use of the property.
TYPES OF FEDERAL EMBEZZLEMENT:
Pursuant to 18 USC 641-670, Federal Embezzlement can occur in all types of ways. The following list is just the most general ways in which it occurs;
- 641- when public monies or property or records are unlawfully taken;
- 643- when public money is taken through inappropriate accounting practices;
- 648- when a custodian misuses public monies and failed to properly deposit them;
- 649- when a public employee fails to safeguard public money and doesn’t guard it’s deposits;
- 651- when the public employee improperly disperses public monies or does not provide a full payment;
- 657- when money is taken by a bank employee from a Federal credit union, bank, insurance institution, or lending company;
- 663- when a public employee solicits gifts of money or uses donated money or property for their own use;
- 664- when there is theft from an employee benefit plan (such as a 401k, etc.);
- 665- when theft occurs from programs which received federal funds;
- 669- theft which occurs in connection with health care (such as Medicare benefits); and
- 670- theft of medical products.
The preceding list did not include all types of cases, but the underlying theme is that the Federal Government has been defrauded by an employee, or somebody in a position of trust with the Federal Government.
The penalty for an individual who misappropriates over $1,000 could be a fine of $250,000 and up to 10 years in the Bureau of Prisons. The fine for an organization that is convicted of committing Federal Embezzlement (as opposed to an individual) can be a $200,000 fine for a Misdemeanor conviction of Theft below $1,000, or a Felony fine of $500,000 for Theft above $1,000. In addition, the Government can impose a fine of double the amount actually stolen.
DM Cantor’s goal is to always have a business charged with the crime, as opposed to an individual. This is because a business cannot go to prison, whereas an individual can.
- The Transfer was Unintentional; for example, many times there is a miscommunication or misunderstanding involving what can be placed on the company credit card. This is especially true with family members or long time employees who have a close relationship with the owner.
- Gift; often times, the business owners will convey a gift to an employee, only to change their mind or “forget” when the relationship goes bad.
- Legitimate Business Purposes; often times, the payments to the employee were for reimbursement of legitimate business purposes. Or, the amount that was sent to the vendor was actually for a proper business purpose, and it was the vendor who was defrauding the company, not the employee.
- Sloppy Bookkeeping; many times there is accidental comingling of funds which occurs when the employee is trying to manage the company’s finances while also trying to manage their own. In these situations, we attempt to close the case as a “Civil Resolution” rather than a criminal resolution.
- Owner Covering up Their Own Failures; we have seen many times where the owner is the one who is actually taking money from a company, or they have driven the company into near bankruptcy, then they attempt to blame their employees/bookkeeper. It is important for us to interview all witnesses to find out exactly what has occurred. Many times, we will secure the services of an Expert Forensic Accountant to comb through the books to show that there was no intentional defrauding of the company by the employee.
Additionally, because our law firm fights convictions from all angles, we would assert a wide range of defenses and challenges regarding constitutional violations which can apply in all criminal cases. The possibilities are numerous and diverse. One of those that we frequently assert is a “Miranda Rights Violation.” In Arizona, the standard of whether any incriminating statement, (i.e., a statement which intends to admit guilt) is only admissible into evidence based upon a “voluntariness” standard. If we can demonstrate that the police coerced you (i.e., intimidated or tricked you) into making a confession or an inculpatory statement, or that they did not properly read your Miranda rights, then we can suppress those statements and have any evidence gathered as a direct result of those statements. In addition, “Denial of Right to Counsel,” is another common defense which is often raised. This occurs when a suspect is in custody and requests to speak to their attorney, but is denied that request and the questioning continues.
Other defenses which can be used in more serious cases may include challenging the validity of any search warrant, or whether there were any “forensic flaws” during the investigation of your case. Depending on what else you have been charged with, this could include exposing flawed procedures regarding computer analysis/cloning hard-drive procedures; forensic and financial accounting reviews; etc.
Lastly, one of the most common defense tactics is exposing sloppy or misleading police reports which include everything from misstatements, false statements, flawed photo lineups, and witness identification procedures.
Once an allegation has been made, or an investigation has begun, it is important to get DM Cantor involved as quickly as possible. Many times we are able to contact the Assistant U.S. Attorney or Federal Investigator to stop them from proceeding to a criminal Indictment. If we can utilize Forensic Accountants to go back and “trace” where the assets went, it may be possible to show that it was not the defendant who actually took the items, but somebody else who is attempting to cover up for it.
Many times, we are able to show that the misappropriation was Unintentional. This could be due to a miscommunication or a misunderstanding of the job duties or the law. If the items or money can be returned, or in an agreement to return them over time can be reached, then it is often quite possible to keep charges from being filed.
Another defense has to do with what is known as “Sloppy Bookkeeping.” This occurs when the employee or bookkeeper doesn’t know to property maintain balance sheets or profit and loss statements. If the mistakes can be undone, and property can be returned, it is often possible to resolve these cases with a “civil resolution.”
It is important to hire the right Federal Embezzlement defense attorney in order to have your charges dismissed. Our firm has handled numerous cases such as these and we have had them successfully defended throughout Arizona. Visit our case victories pages and click on Federal Embezzlement in order to view our most recent successes.