Embezzlement Definition, Examples, Laws, Charges & Punishments

According to the Federal Bureau of Investigation’s Crime Data Explorer, U.S. law enforcement agencies recorded 11,316 embezzlement arrests in 2022, showing how common trust-related financial crimes remain across industries and organizations.

Embezzlement often sounds like something that happens only in corporate boardrooms, but that’s far from true. These cases involve employees, bookkeepers, cashiers, treasurers, nonprofit workers, government staff, and people from dozens of other positions who gain access to money—or property—and misuse it for personal gain.

What Is Embezzlement?

Embezzlement is a property theft crime that occurs when a person:

1. Is trusted with money, property, or assets
2. Uses it for personal benefit
3. Without permission from the rightful owner

In simple terms: it’s stealing something you were allowed to hold, but not allowed to take.

Key Components are

• Someone had lawful access, not ownership.
• They intentionally used the property for themselves.
• The owner didn’t allow the use.
• There was intent to permanently or temporarily deprive the owner.

Embezzlement Examples

There are 7 common examples seen across U.S. courts:

1. Employee Cash Theft

A cashier pockets $80 per shift from the register.

2. Payroll Embezzlement

A payroll manager creates a “ghost employee” and deposits paychecks into their own account.

3. Nonprofit Treasurer Theft

A nonprofit treasurer transfers $12,000 of donations into a personal account.

4. Corporate Funds Misuse

A company executive charges $40,000 in personal vacations to the corporate card.

5. Bank Employee Theft

A bank teller skims $200 per week from customer deposits.

6. Investment Advisor Misappropriation

A financial advisor diverts client funds into personal accounts.

7. Guardian or Trustee Fraud

A legal guardian uses a protected adult’s money to buy personal items.

Federal vs. State Embezzlement Laws

Embezzlement can be charged under state law or federal law, depending on what was stolen and who owned it.

Federal Embezzlement Laws

A case becomes federal when:

• The stolen money belonged to the U.S. government
• The crime involved a federal agency, such as USPS or IRS
• The case involved a bank insured by the FDIC
• The theft crossed state lines
• An interstate wire transfer was used

Main Federal Statutes

Federal embezzlement crimes are found under 18 U.S.C. §§ 641–669.

Some examples include:

• § 641 – Theft of Government Property
• § 656 – Bank Embezzlement
• § 657 – Embezzlement from Credit Unions or Loan Associations
• § 666 – Theft from Organizations Receiving Federal Funds

Federal Penalties

Federal penalties can include:

• Up to 10–30 years in prison for bank embezzlement
• Up to 10 years for federal property theft
• Fines reaching $250,000 or more
• Mandatory restitution

State Embezzlement Laws

States classify embezzlement based on:

• Value stolen
• Type of property
• Victim (employer, senior citizen, bank, nonprofit, etc.)

Each state has its own statutes. For example:

• California: Penal Code § 503–515
• Texas: Penal Code § 31.02–31.04
• Florida: Statute § 812.014
• New York: Penal Law § 155.05

Typical State Penalties

Most states use value-based thresholds. For example:

• Under $500–$1,000 → Misdemeanor
• Over $1,000–$5,000 → Low-level felony
• Over $50,000 → High-level felony
• Over $100,000 → Major felony

Penalties often include are Jail or prison, fines, restitution, probation and permanent criminal record.

Learn More: Common Types of Healthcare Fraud

Punishments & Sentencing Ranges

Punishment depends on:

• Amount stolen
• Duration of the scheme
• Trust position of the defendant
• Whether the victim was vulnerable
• Prior criminal history

Typical Sentencing Ranges by Amount

Value Stolen	Typical Charge	Possible Penalty
$500–$1,000	Misdemeanor	Up to 1 year jail
$1,000–$5,000	Felony	Up to 3 years prison
$5,000–$50,000	Felony	Up to 5 years prison
$50,000–$100,000	Felony	5–10 years prison
$100,000+	High Felony	Up to 20 years prison
Federal bank/government embezzlement	Federal Felony	Up to 30 years

Other penalties include:

• Fines (from $1,000 to $250,000+ depending on the case)
• Probation
• Loss of professional licenses
• Paying restitution
• Employment restrictions

Misdemeanor vs. Felony Embezzlement

Misdemeanor Embezzlement

Occurs when:

• Low dollar amounts are involved (usually under $1,000)
• No vulnerable victims
• First-time offender

Penalties may include:

• Up to 1 year in county jail
• Fines
• Probation

Felony Embezzlement

Occurs when:

• Larger amounts were stolen
• The scheme lasted long
• A position of trust was abused
• A bank or government agency was involved

Penalties include:

• 1–20+ years in prison
• Heavy fines
• Mandatory restitution
• Criminal record

What are the Types of Embezzlement?

There are 10 major types, each involving different victims and methods:

1. Employee Embezzlement

Misusing employer funds or assets.

2. Bank Embezzlement

Tellers, loan officers, or managers taking bank money.

3. Corporate Embezzlement

Executives or accountants manipulating financial records.

4. Payroll Embezzlement

Ghost employees, false hours, or inflated pay.

5. Nonprofit Embezzlement

Misuse of donations or grant funds.

6. Government Embezzlement

Theft of public funds or property.

7. Trustee/Guardian Embezzlement

Taking money from protected persons.

8. Vendor/Supplier Fraud

Vendors stealing from companies through fake invoices.

9. Healthcare Embezzlement

Misuse of patient payments or insurance reimbursements.

10. Retail Register/Point-of-Sale Embezzlement

Skimming, refund fraud, or void schemes.

What are the Elements Prosecutors Must Prove?

Prosecutors must prove four elements for a conviction:

1. A fiduciary or trust relationship existed

The defendant legally held money or property.

2. The defendant acquired the property through that relationship

They didn’t steal it outright—they misused access.

3. The defendant intentionally took or misused the property

Accidents don’t count as embezzlement.

4. The defendant intended to permanently or temporarily deprive the owner

Intent is critical.

Which type pf Defenses Attorneys Commonly Use?

Defense attorneys challenge these elements by arguing:

1. Lack of Intent

The accused believed they had permission or made a bookkeeping mistake.

2. Owner Consent

The employer or owner allowed the expense or transaction.

3. Mistaken Identity

Another employee or person conducted the fraudulent act.

4. Insufficient Evidence

Missing documents, unclear records, or lack of direct proof.

5. Duress

The defendant acted because of threats or coercion.

6. Lack of Trusted Relationship

If no fiduciary duty existed, the charge may not apply.

7. Returned Property

While not a full defense, repayment can reduce penalties.

Final Thought

Embezzlement may look like a “paper crime,” but its impact can hit businesses, nonprofits, and individuals with real financial and emotional damage. Understanding the definition, laws, punishments, and common defenses gives anyone—from employees to business owners—a clearer sense of how seriously the justice system treats these cases. Staying informed helps prevent mistakes, protect organizations, and navigate situations where trust and money intersect.

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