Embezzlement

Embezzlement is the misappropriation of money or property by someone who was entrusted with it. Unlike theft or robbery, embezzlement involves a breach of trust: an employee, officer, fiduciary, or professional allegedly diverts funds or property for personal use. Federal prosecutors pursue embezzlement aggressively, particularly when it involves banks, federal funds, or interstate commerce.

What is Embezzlement?

At its core, embezzlement means: (1) the defendant was entrusted with money, property, or assets belonging to another; (2) the defendant fraudulently converted or misapplied those asserts for personal use; and (3) the defendant acted knowingly and willfully.

Embezzlement can be charged under various statutes depending on the context, including:

  • 18 U.S.C. 656—bank embezzlement (by officers or employees of federally-insured institutions)

  • 18 U.S.C. 641—theft or embezzlement of government property or funds

  • 18 U.S.C. 666—theft or embezzlement from programs receiving federal funds

  • 18 U.S.C. 1341/1343—mail and wire fraud counts layered onto embezzlement schemes.

Common Embezzlement Scenarios

  • Employee Embezzlement: Diverting company funds into personal accounts or fabricating expense reimbursements

  • Payroll or Vendor Schemes: Setting up false vendors or “ghost employees”

  • Bank Officer Misconduct: Misusing depositor accounts, loans, or assets of a financial institution

  • Government Funds: Misusing grants, contracts, or federal program funds (such as education, defense, or health program dollars)

  • Fiduciary Embezzlement: Trustees, attorneys, or financial advisors misappropriating client funds

  • Corporate Officer Misconduct: Executives redirecting funds through unauthorized bonuses, loans, or insider payments.

Bottom Line

Embezzlement prosecutions can be devasting because they allege betrayal of trust. But not every disputed transaction is necessarily a crime—the government must prove entrustment, misappropriation, and intent beyond a reasonable doubt. When the stakes are high, an aggressive defense can often show that questionable payments were authorized, mistakes were honest, or that alleged losses are inflated.