Embezzlement

Embezzlement is the act of defrauding people of assets that have been lawfully entrusted to someone for such purposes as holding or investment. Embezzlement is a type of financial fraud that may range from minor in nature (small amounts of money) to elaborate schemes involving millions of dollars. Most often, embezzlement involves premeditation and is carried out in a way that is intended to deceive people of the perpetrator's true intent to steal the asset. Embezzlement often involves taking small amounts of the asset over long periods to help avoid detection.

Embezzlement is a statutory offense, which means that the definition of the crime may vary according to the statute. It does involve several typical elements in its definition. First, the act of embezzlement is deemed fraudulent in that the perpetrators are willfully and knowingly claiming the asset for use as if it were theirs. Next, embezzlement requires the asset to be converted in respect to ownership from the rightful owner to the perpetrator. Embezzlement involves the conversion of property. Although this property may not be limited in scope to only personal property, it does typically exclude real property (i.e., real estate holdings such as land, buildings, or another subset of land). Embezzlement must involve the property of another person—one cannot embezzle his or her own assets. Finally, the perpetrator must have lawful possession of the asset at the time of conversion. If the perpetrator is merely in custody of the asset, this is considered larceny.

[Page 250]Though similar in nature to larceny, embezzlement differs in several important ways. First, the act must not involve trespass. This means that the perpetrator has the legal right to possess and use the assets for a purpose. Second, the act or offense must be continual in nature. In many cases, acts of embezzlement are carried out over years or decades and are usually only detected during times of reorganization or when a large portion of the asset is needed at a given time.