Embezzlement

Embezzlement is a type of white collar, non-violent crime. It involves financial fraud and takes place when a person, usually an employee, steals funds or property from his or her employer.

The severity of embezzlement depends on the amount of money or property value acquired illegally. The offense can be charged as anything from a minor misdemeanor to a Class X felony.

State Legislation

Embezzlement is covered under the theft statute 720 ILCS 5/16-1 in Illinois. A person commits theft/embezzlement when the following occur:

• There is a relationship of trust and reliance between the embezzler and the victim.

• The embezzler takes ownership or exerts authority over a property entrusted to him or her by the legal owner through theft, forgery or deception.

• The embezzler transfers the ownership of the property to a third part for their personal gain without authorization.

• The embezzler uses or abandons the property in a way that deprive the owner of its use and benefits permanently.

• The actions of the embezzler are intentional and not the result of an accident.

While embezzlement is covered under the theft laws, the crime is distinct from regular theft due to one main characteristic. The embezzler is an employee, officer, family member, friend or board member of the victim and uses the trust placed on him or her to illegally acquire some property or financial gain.

Punishments

Embezzlement is a crime motivated by financial gain. The legislators took this into account and the penalties are designed to punish the culprit with fines and penalties along with incarceration. The offense is charged on the basis of the value of property in question.

For a value less than $500, the theft is a Class A misdemeanor which is punishable by up to one year in prison.

For a value from $500 to $10,000, the prosecution may charge it as a Class 3 felony, punishable by 2 – 5 years in prison.

If the value of the property is from $10,000 to $100,000, it may be charged as a Class 2 felony, punishable by 3 – 7 years in prison.

In a case where the value of the property is more than $100,000 but less than $500,000, it may be charged as a Class 1 felony which is punishable by 4 – 15 years in prison.

Where the value of the property exceeds $1,000,000, the offense can be charged as a Class X felony which carries the maximum penalty. A Class X felony is punishable by 6 – 30 years in prison.

Considerations

Certain types of embezzlements are considered more severe and receive a harsher punishment. For example, embezzling government property or funds can be charged as a Class 3 felony even if the value of embezzlement is less than $500.

Embezzlement charges are commonly related to fraud and deception. The prosecution usually presents evidence on the basis of the following:

• An employee directly stealing money from the cash registers or petty cash accounts.

• Issuing forged or unauthorized checks on behalf of the employer.

• Reporting false or exaggerated expenses in the books of accounts.

• Diverting money from one account to another or withdrawing money from company accounts for personal use.

• Using forged documents to transfer title of properties or assets from one person to another.

Examples and Court Cases

Most embezzlement charges that get brought to the court involve theft of government funds or deception at schools. An allegation of embezzlement of public funds is taken very seriously and the state appoints highly experienced prosecutors in trials involving embezzlement of state property.

Sheri Gossage, the former information technology director for the poplar school, was charged for embezzlement recently. He was charged with theft from a state and local government for receiving federal funding and wire fraud.

The prosecution alleges that Gossage misused the school district credit cards. He fraudulently claimed money from the government to buy supplies from online vendors like Amazon for personal use.

The trial is set to begin in May.

In a separate case, a woman from Illinois was charged with embezzlement and sentenced to five years in prison for a theft of more than $700,000.

Kristen Roberts from Paducah had earlier pleaded guilty to the charge of embezzling funds from her employer, Utilities Dynamics. The prosecutors said that she took $747,455 from the company by making direct deposits into her own account from the payroll account.

To hide the crime, she inserted fake payments to other employees who would not be aware of what was going on. She also made fake payments to company vendors while transferring all the money into her own account.

Apart from the prison sentence, the judge also ordered Roberts to make restitution to her company. The defendant has paid more than $120,000 back, but still needs to pay the remaining balance of $619,341.

Possible Legal Defenses

Most cases of embezzlement leave a documentary trail if foul play or deception was at work. However, the onus still lies on the prosecution to prove that the defendant had the knowledge or intention of theft.

This opens up two possible defenses. The defendant may argue that he or she did not have the intent to commit the offense and any theft or redirection of funds was done based on their understanding of instructions at the time.

Lack of knowledge is another defense that can be used. A defendant may be able to show the courts that they were not aware of the results of their actions.

Apart from these commonly employed defenses, an accused may also be able to show duress. If the defendant believes that he or she will be in danger unless they took the actions that led to charges of embezzlement, they can raise this defense in court.

The defendant may also use the incapacity defense where it must be shown that they were intoxicated, drugged or otherwise incapable of making a sensible decision when the fund transfer occurred.

The burden of proving incapacity or duress lies on the defendant.

Lastly the defendant may also challenge the evidence presented by the prosecution to prove theft. Under the right circumstances, a good legal defense team would be able to create enough doubt on the accuracy of the paper trail that could lead to an acquittal.