Embezzlement is a term frequently encountered in discussions of financial crimes, yet its precise meaning can often be unclear. To gain a comprehensive understanding, it’s crucial to explore the legal definition of embezzlement, particularly as it is interpreted within the United States legal system. This article aims to clarify “What Is Embezzlement” by examining its definition, key elements, and distinctions from related offenses.
Defining Embezzlement: A Legal Perspective
The Supreme Court case Moore v. United States (1895) provides a foundational definition of embezzlement, characterizing it as:
Embezzlement is the fraudulent appropriation of property by a person to whom such property has been entrusted, or into whose hands it has lawfully come. It differs from larceny in that the original taking was lawful, or with the consent of the owner, while in larceny the felonious intent must have existed at the time of the taking.
This definition highlights a critical aspect of embezzlement: the lawful initial possession of the property. Unlike larceny, where the intent to steal exists from the outset, embezzlement involves someone who legitimately comes into possession of property and subsequently abuses that trust by fraudulently appropriating it for their own use.
Key Elements of Embezzlement
Under U.S. law, specifically 18 U.S.C. § 666(a)(1)(A), prosecuting embezzlement requires establishing specific elements beyond general criminal elements. These key elements, as outlined in United States v. Powell and United States v. Dupee, are:
- Fiduciary Relationship: There must be a relationship of trust or fiduciary duty between the defendant and the organization involved, whether it’s a private entity, a state, or a local government agency. This element underscores the breach of trust inherent in embezzlement.
- Lawful Possession by Virtue of Employment: The property must have come into the defendant’s possession or care as a direct result of their employment or position within the organization. This lawful access is what distinguishes embezzlement from theft by unlawful taking.
- Fraudulent Conversion or Appropriation: The defendant’s actions concerning the property must constitute a fraudulent conversion or appropriation, meaning they misused the property for their own benefit in a deceitful or dishonest manner. This signifies the act of betrayal of the entrusted responsibility.
- Intent to Deprive the Owner: The defendant must have acted with the specific intent to deprive the owner of the use of their property. This element establishes embezzlement as a specific intent crime, requiring proof that the defendant deliberately aimed to misuse the entrusted assets.
Specific Intent and the Irrelevance of Restoration
Embezzlement is classified as a specific intent crime, as affirmed in United States v. May. This means that proving embezzlement necessitates demonstrating that the defendant acted with a particular criminal intent – the intent to deprive the owner of their property’s use.
However, a crucial point to note is that this intent does not require a desire to permanently deprive the owner of the property. Even if the individual intends to eventually return the embezzled assets, the act is still considered illegal from the moment of fraudulent appropriation. As highlighted in United States v. Powell, restoring the misappropriated property is not a valid legal defense against embezzlement charges. The crime is committed when the fraudulent appropriation occurs, regardless of any subsequent attempts to rectify the situation.
Conclusion: Understanding Embezzlement
In summary, “what is embezzlement” revolves around the breach of trust and the fraudulent misappropriation of property that was lawfully entrusted to an individual. It is distinct from larceny due to the initial lawful possession, and it requires specific intent to deprive the owner of their property, even temporarily. Understanding these core elements is essential for recognizing and addressing embezzlement in legal and organizational contexts.
