Embezzlement is the act of fraudulently taking and dishonestly claiming ownership of somebody else's property or money. As a white-collar crime, embezzlement is non-violent. Unlike common robbery where the offender may physically threaten or harm their victims, embezzlement offenders use schemes to defraud unsuspecting victims. As a white-collar crime, embezzlement is mostly facilitated by a fiduciary relationship between the victim and the offender, with employer-employee relationships being the most susceptible to the crime. The relationship gives the embezzler legal access to the victim's property or monies. As such, embezzlement does not only result in substantial financial losses but also leads to a breach of trust.
Generally, the offender has the consent of the victim to temporarily possess or manage the property or monies but decide to deprive the victim of their legal ownership dishonestly. Embezzlement may either be a one-time event or an elaborate scheme spanning months or years. For example, as a simple one-time occurrence, a bank teller may pocket customers' deposits for personal use. It could also be as simple as an accountant falsifying accounting records to claim ownership of company property or monies. On the other hand, it can be complex. For example, an investment banker may hatch a plan where over several months, he/she invest their client's money for themselves. An embezzlement case may also involve a pyramid or Ponzi scheme where embezzlers unsuspecting people are promised quick returns on their investments but instead lose the investments to embezzlers.
Under Virginia law, embezzlement is a serious criminal violation; hence related offenses are treated very seriously by prosecutors. The complexity of the crime means potential penalties and charges depend on specific crimes. However, the penalties and charges still have a significant impact on the offender's life. In addition to possible jail time and financial sanctions, an embezzlement conviction can destroy a person's reputation. Even after serving prison time and or paying required fines, the fact that an embezzlement conviction is now a part of their criminal and employment records significantly reduces a person's job opportunities.
Since the potential consequences of an embezzlement conviction can completely change the course of your life, it is essential to seek the services of an experienced criminal attorney when facing embezzlement charges. If you are in Virginia and are facing embezzlement accusations, our skilled criminal attorneys at Virginia Criminal Attorney are committed to helping you navigate the complex legal process and obtain the best possible outcome.
Common Embezzlement Scenarios
As with other forms of white-collar crimes, you do not need to wear a suit and tie to work to commit the crime of embezzlement. Embezzlement happens in varied scenarios and circumstances. While most prominent embezzlement cases are of Wall Street bankers and other people in high ranking jobs, most embezzlement charges are against regular people in regular jobs.
In Virginia, embezzlement mainly occurs in employment scenarios and involve employees converting their employer's money and other assets for personal use. Things such as abusing overtime privileges can be classified as embezzlement since the privileges result in financial benefits for the employee. In more severe cases of employment embezzlement, an employee may use his/her position to steal money and other assets from his/her employer. However, for any offense to be classified as embezzlement, the prosecution must prove the existence of intent and conversion. In addition to breach of trust, intent and conversion dictate the different scenarios under which embezzlement occurs in Virginia. Some of the common embezzlement scenarios include:
- Bank employees' particularly bank tellers, channeling the client's deposits to personal accounts. While bank employees have legal access to their clients' money, they should not take the money for any personal use.
- Accounting officers and other bookkeepers, falsifying a company's accounting records to claim ownership of some of the company's assets fraudulently. The accountants may also falsify the records to hide potential financial losses that may be a result of their negligence and financial misappropriation.
- A payroll officer failing to deposit the full amount of employment tax and claiming the difference.
- An investment broker or other such professionals investing their client's money for themselves. This embezzlement scenario may include professionals such as lawyers and other business executives who entrusted with a client's investments.
- A family member or any other form of caretaker misappropriating a sick person's monies that have been entrusted to him. This also extends to the fraudulent management of a deceased person's estate intending to take the property or monies left behind.
While the above are the most common embezzlement scenario, there are many other embezzlement situations, including in commercial organizations, in charity organizations, and religious organizations. For example, an employee in a charity organization may fraudulently divert well-wishers' donations for personal use. The contributions may be in the form of money or even property. Similarly, a church treasurer or finance manager may fraudulently transfer money from the church account to his/her account.
Embezzlement Law in Virginia
The state of Virginia prosecutes embezzlement crimes under Code 18.2-111 of Virginia laws. The law treats embezzlement the same way it treats larceny, which is the unlawful possession of someone's property without their knowledge or consent. The only difference between embezzlement and larceny is that an embezzlement offender had been entrusted with temporary possession of the victim's property or monies at some point in time. Generally, taking someone's property or monies without their consent is theft hence larceny. However, it becomes embezzlement when the theft includes a breach of trust. Therefore, an embezzler is someone who violates a position of trust and steals another's property or monies. These are property or monies the defendant had legal access to but not legal ownership.
According to the law, "anyone found to have disposed of, concealed fraudulently or used personal property, money, receipt, money orders, notes, bills, bonds, checks, or a bill of lading, which they received from a person to whom they have a trust relationship" is deemed to have violated Virginia’s law and is guilty of embezzlement. Virginia courts prosecute larceny hence embezzlement as either a misdemeanor or a felony. Based on the seriousness of the offense, larceny is either grand or petit. The courts prosecute grand larceny as a felony and petit larceny as a misdemeanor. While the courts have discretion on whether an embezzlement crime is a misdemeanor or a felony, the major differentiating factors include the amount of loss suffered and whether the defendant is a first time or a repeat offender.
Virginia law also includes all forms of personal property, whether tangible or intangible, as a property that is capable of embezzlement. This definition includes computers and computer networks, computer data, programs, software, and other related properties. The law also considers intangible financial instruments, including stocks, as property capable of embezzlement.
Virginia's Embezzlement Penalties
It is evident from the legal definition of embezzlement that the severity of the punishment depends on the seriousness of the crime. In Virginia, the law does not punish a misdemeanor offender as severely as it punishes a felony offender. Essentially, the state of Virginia penalizes the crime of embezzlement based on the value of the stolen property or monies. However, if the scheme behind the embezzlement crime in any way defrauds the federal government, the case may also be prosecuted as a federal crime. As a federal crime, embezzlement Vis penalized differently. If the value of the stolen property or monies is less than $200, then it is a misdemeanor offense; otherwise, it is a felony.
In Virginia, the potential penalties for embezzling money or property of less than $200 in value include:
- A fine of up to $2500
- A jail term of up to one year
- Both the fine and the jail term
However, despite having embezzled less than $200 in value, the courts prosecute a third time offender as a felony offender.
Virginia's penalties for embezzling $200 or more include:
- A minimum of one year in jail
- A jail term of up to 20 years
- A fine of up to $2500
- Both the fine and either of the jail terms depending on the circumstances of the case
The state's penalties for embezzling $200 or more also applies to incase a firearm is among or is the stolen property. The penalty is regardless of the value of the firearm.
Restitution as a penalty in embezzlement cases means that the state of Virginia may require the defendant to repay the victim an equivalent monetary value of the embezzled property or money. In case the court decides on restitution, it is usually additional and not part of the applicable financial fines and jail time. In some cases, probation and community service may be part of the embezzlement penalties.
In case of a federal charge, potential consequences include up to 30 years in federal prison and/or a fine of up to $250,000. However, if the embezzled amount is greater than $250,000, the offender pays that amount as a fine.
While the value of the property or amount of money involved is the most common aggravating factor, other factors might lead to harsher penalties for embezzlement offenders. Generally, embezzlement consists of a breach of trust and is characterized by the existence of a fiduciary relationship between the parties in the case. In many of the cases, there exists a heightened level of trust between the offender and the victim. In some cases, the victim is usually a vulnerable member of society, including the sick, elderly, and disabled.
The defendant abusing their position of trust or taking advantage of a vulnerable person are leading aggravating factors besides the value of the property or money involved. Many states, including Virginia, may impose stiffer penalties if the defendant embezzled from a vulnerable group of victims. For example, the elderly and disabled are classified by the law as vulnerable, and the court may impose harsher penalties on a caretaker who is accused of embezzling money meant for their care or any property owned by the vulnerable individual. Essentially, there is an extra layer of protection when it comes to vulnerable individuals hence complicating the defense of such cases in addition to the likelihood of the court imposing stiffer penalties.
The existence of a heightened level of trust between the offender and the victim is another aggravating factor. In this case, there exists an above-normal level of trust in the offender by virtue of their office or position. This scenario is common in cases where the defendant is a public servant or an employee of a service institution such as a bank. This group of people, including civil servants, are deemed to be holding a unique position of trust, and a breach of this trust can be detrimental. For example, a public servant convicted of embezzlement may have additional penalties imposed on him/her, including being permanently barred from holding public office in any form.
While vulnerable individuals are a special group of victims, public servants, and other officials whose office and position attract heightened levels of trust are a special class of defendants. The law, as designed by the state of Virginia, is meant to protect vulnerable individuals and to deter people in a position of trust from breaching that trust. In both scenarios, the court may impose harsher penalties as taking advantage of vulnerable individuals and abusing a position of special trust are considered as aggravating factors in embezzlement cases. In addition to these common aggravating factors, Virginia also imposes stiffer penalties for embezzlement involving particular types of properties, including firearms. These penalties are, regardless of the value of the stolen properties.
What the Prosecutor Needs to Prove
As with most crimes, the burden of proof lies with the prosecution. For a successful embezzlement conviction, the prosecution must prove the existence of several elements, including:
- That the defendant had the intention of permanently depriving the victim of the legal ownership of the stolen property or monies. The prosecutor must prove that the defendant's actions were intentional. This element also covers the willful conversion of the property or monies to personal use.
- That the stolen property or monies had at some point in time been entrusted to the defendant by virtue of their employment or position. The prosecutor must prove that there was a fiduciary relationship between the defendant and the plaintiff and that it facilitated the defendant's actions. Mostly, the prosecutor must prove the defendant's lawful possession of the property or monies.
- In case of a felony charge, the prosecution needs to prove that the value of the stolen property or monies was $200 or more.
For a person to be declared guilty of embezzlement, the prosecution needs to prove all these elements beyond a reasonable doubt.
An embezzlement defense depends on several factors, including the specific charges and the defendant's employment and criminal record. Whether the embezzlement accusations are as a result of negligence or a mistake is also crucial to the defense attorney. Some of the common defenses in an embezzlement case include:
- Insufficient Evidence: It is the responsibility of the prosecution to produce clear and irrefutable evidence that the defendant is guilty of embezzlement. Since insufficient evidence is enough reason for the court to dismiss a criminal charge, it is a common legal defense in embezzlement cases. However, the defense is only applicable if the court is unable to prove the defendant's guilt beyond a reasonable doubt.
- Lack of Intent: The absence of intent to commit the crime of embezzlement is another common legal defense. As with many criminal cases, the intention must be seriously interrogated while prosecuting an embezzlement case. With intention being one of the elements of the crime, the prosecution needs to prove that the defendant intended to fraudulently claim ownership of the property or monies entrusted to them. One of the common scenarios in this defense is when a person faces accusations of embezzling property or monies they thought were rightfully theirs. In this case, the accused had no intention of committing a crime since they thought they owned the money or the property. However, for a successful defense, you will need to prove to the court that at the time of your actions, you were fully convinced that you had ownership rights to the property or monies.
- Good Faith: Related to the lack of intent defense is the legal defense that you acted in good faith. In this case, you reasonably believed that there was nothing wrong with your actions. The defense is common in cases where the courts accuse the defendant of wrongfully using funds entrusted to them. For example, a finance officer in a healthcare institution may wrongfully allocate money meant for infrastructure to buying medical supplies. In this case, he/she will be required by the court to present an irrefutable argument that he acted in good faith. This form of defense may lead to reduced penalties or dismissal of the embezzlement charges.
- Duress: Duress occurs when someone is illegally forced by someone else to perform a particular act. In embezzlement cases, the defendant is under duress to embezzle property or monies that have been entrusted to them. For example, a company's junior accounting officer may be forced by the accounts manager to alter some accounting records to hide the company's financial losses. Their boss may threaten the junior officer with job loss and other related consequences. As a legal defense, duress is only successful if you can prove that you sincerely believed that you risked some form of danger or injury if you did not commit the crime. For example, in the case of the junior accounting officer, he/she must clearly show that he/she had no other viable alternative actions at the time of the embezzlement.
- Entrapment: Entrapment is closely related but different from duress. In this case, a person commits a crime they would otherwise have not committed as a result of being compelled by government agencies. Entrapment is different from duress in that there is no threat; instead, it is a form of a trap that the government set to bait a person into committing a crime. While this defense may be harder to pull off, an experienced attorney can successfully argue that you were not predisposed to committing the crime and only unknowingly pursued a government bait.
- Mental Incapacity: As a part of the intention element of the crime, the prosecution needs to prove that you were not fully cognitively aware of your actions at the time of committing the crime. If confirmed, this form of incapacity puts in serious doubt the existence of intent in the crime. You could have a viable legal defense if you can prove to the court that you had some form of mental incapacitation during the time of committing the crime. For example, you might have been under the influence of some heavy medication, which compromised your cognitive abilities at the time. However, there is a thin line between this form of defense and voluntary intoxication; hence the defense must be handled by a skilled attorney.
- An Insanity Claim. While it is usually unsuccessful, claiming insanity is another legal defense option for an embezzlement case. Unlike mental incapacity, a claim of insanity as defense includes arguing that you were utterly insane at the time of committing the crime. While the defense is unlikely to lead to a dismissal, it might lead to reduced penalties.
Contact a Fairfax Criminal Lawyer Near Me
Despite being a non-violent crime, embezzlement is a serious crime with severe penalties. In addition to financial fines and prison time, an embezzlement conviction has collateral consequences, including destroying your reputation and making it hard to find a job. In case of a federal sentence, you may lose some federal benefits, such as the opportunity to apply for some federal loans. These consequences and the complexity of most embezzlement cases make it necessary for you to have an experienced and skilled criminal defense attorney. If you are in Virginia and are dealing with embezzlement accusations, our experienced and qualified criminal defense attorneys at Virginia Criminal Attorney will help you obtain the best possible court outcome by coming up with a defense strategy that is ideal for your case. Contact us at 703-718-5533 to learn more about our services.