The white collar federal criminal defense attorneys at Breeding Carter Crippen dedicate themselves to vigorously fighting to protect clients facing an embezzlement investigation or actual embezzlement charges. A federal embezzlement charge may arise from misappropriating funds from an agency, department or subdivision of the federal government or other governmental entity that receives federal funding. Embezzlement is a very serious crime punishable by lengthy periods of incarceration in the Federal Bureau of Prisons, followed by a period of supervised release, and accompanied by exorbitant fines, as well as restitution.
Several federal statutes criminalize embezzlement. The list of embezzlement crimes is quite extensive, the bulk of which are found in Title 18 of the United States Code as well as in other statutes. For example, 18 USC §666 criminalizes embezzlement of property worth $5,000 or more by an agent of a governmental entity or agency receiving federal funds. An agent is a person who is “authorized to act on behalf of another person or government, and in the case of an organization or the government, includes a servant or employee, and a partner, director, officer, manager, and representative.” To be a federal crime, the governmental agency must have received $10,000 or more of federal funds during the previous year. Additional examples of embezzlement include 18 USC §1033 which criminalizes embezzlement by an agent of an insurance brokerage and 18 USC §656 which seeks to punish agents of a federally insured bank who embezzle funds.
Federal courts define embezzlement as “the fraudulent appropriation of property by a person to whom such property has been entrusted, or into whose hands it has lawfully come.” Federal law does not define “entrusted” property. Rather, federal courts look to state law to determine whether a person holds property “in trust.” A person could not be guilty of embezzlement if he were not “entrusted” with the property. Embezzlement is a specific intent crime. In other words, to be guilty of embezzlement, the person must have formed the intent to deprive the beneficiary of the property the right to the property.
The crime of embezzlement is complete when the person misappropriates the property entrusted to them. Federal courts, including the Second Circuit in New York, have ruled that an intention to reimburse the beneficiary is not a defense to embezzlement. Therefore, a person charged with embezzlement may not present evidence at a trial of an intention to pay restitution to the victim. In fact, another federal court had previously ruled that the fact that restitution was made, and the beneficiary made whole is not relevant at trial for embezzlement because the crime is complete when the misappropriation was made. A conviction for embezzlement does not require proof of the person’s intent permanently to deprive the owner of the use of the property as does larceny or theft.
Punishment for embezzlement includes incarceration, supervised release, fines and restitution. According to the federal sentencing guidelines, embezzlement is a level 6 or 7 crime, depending upon the specific allegations. The guidelines start at zero to six months incarceration for a person with no prior criminal history. Aggravating factors such as the value of the property embezzled, the number of victims, and criminal history if any are added to the equation to determine the length of incarceration, which could last up to 20 years.