Federal Embezzlement Charges: An In-Depth Look

Embezzlement is a serious crime that can lead to federal charges and stiff penalties. This article provides an in-depth look at federal embezzlement laws, charges, defenses, and implications.

What is Embezzlement?

Embezzlement occurs when someone who is entrusted with managing money or property steals or misappropriates those funds or assets for personal gain[1].

The key factor is that the person had legal access to the funds or property, but not legal ownership. Taking the money or property for personal use is considered theft. When combined with the abuse of a position of trust, it becomes the unique crime of embezzlement[2].

Federal Embezzlement Laws

Federal embezzlement laws target theft from the federal government, such as theft of property from a national park by a park ranger[2]. They also cover theft of private property that the government has paid for through a contract. For example, if a construction company employee stole materials for a government building project, they could face federal embezzlement charges[2].

State laws cover embezzlement by state and municipal employees, as well as private individuals stealing from companies or other private entities. In some cases, federal and state laws overlap, such as bank embezzlement by an employee. Usually only one office will bring charges, but it is possible for both federal and state prosecutors to charge embezzlement[2].

Embezzlement of Public Money, Property or Records – 18 U.S.C. § 641

This broadly-written statute makes it illegal to embezzle, steal, or knowingly convert any U.S. record, voucher, money or thing of value to one’s own use or gain[3][4]. It applies to theft of government property by federal employees or private individuals. The penalties include:

• Up to 10 years in prison and a fine if the value is over $1,000
• Up to 1 year in prison and a fine if the value is $1,000 or less

Bank Embezzlement – 18 U.S.C. § 656

This law targets embezzlement by employees of banks and other lending institutions. Penalties include:

• Up to 30 years in prison and a $1 million fine if the amount exceeds $1,000
• Up to 1 year in prison and a fine if the amount is $1,000 or less[5]

Theft from Employment and Training Funds – 18 U.S.C. § 665

This statute prohibits embezzlement of federal job training funds. Penalties include:

• Up to 10 years in prison and a $250,000 fine if the amount exceeds $5,000
• Up to 1 year in prison and a $100,000 fine if the amount is $5,000 or less[5]

Theft Concerning Programs Receiving Federal Funds – 18 U.S.C. § 666

This law prohibits embezzlement from organizations that receive federal program funds. Penalties include:

• Up to 10 years in prison and a $250,000 fine if the amount exceeds $5,000[5]

Embezzlement Defenses

Some possible defenses to federal embezzlement charges include[6]:

• Lack of criminal intent – the defendant must have intended to deprive the owner of the money or property.
• Belief of entitlement – the defendant believed they were entitled to use the funds or assets. However, this can be difficult to prove.
• Return of property – if the defendant returns or pays back what was taken, it can demonstrate lack of criminal intent. But embezzlement is complete as soon as the property is misappropriated.
• Duress – the defendant was forced to commit embezzlement through threats of harm.
• Insanity – the defendant was legally insane and unable to understand the criminality of their actions.

An experienced federal criminal defense lawyer can assess the strength of these and other possible defenses for a particular case.

Implications and Consequences

The implications of a federal embezzlement conviction are severe. They include[6]:

• Prison time – federal embezzlement charges can result in years in prison depending on the amounts involved.
• Fines – courts can impose high fines, especially when large sums were embezzled. Fines can be as much as twice the amount gained by the crime.
• Restitution – courts almost always order repayment of all funds or property stolen through embezzlement.
• Loss of position – conviction will result in losing any government job or position of trust.
• Loss of rights – felony convictions result in losing voting and gun ownership rights.
• Reputation damage – embezzlement conviction causes significant reputational damage.
• Civil liability – employers or victims may file civil lawsuits to recover additional losses.
• Deportation – conviction can trigger deportation for non-citizens.

Given these severe consequences, anyone facing federal embezzlement charges should retain an experienced federal criminal defense lawyer as early as possible. An attorney can negotiate with prosecutors for a plea deal or defend the case at trial.

Examples of Federal Embezzlement Cases

Here are some real-world examples of federal embezzlement prosecutions:

• A former Veterans Affairs employee was charged with embezzling over $100,000 in VA funds under 18 U.S.C. § 641. She pleaded guilty and was sentenced to 15 months in prison.
• A bank vice president was convicted under 18 U.S.C. § 656 of embezzling over $400,000 from customer accounts. He was sentenced to 41 months in prison.
• The former executive director of a nonprofit was charged under 18 U.S.C. § 666 with embezzling over $5 million in federal program funds. He pleaded guilty and received a 10 year prison sentence.

Reporting Suspected Embezzlement

If you suspect embezzlement from a federal program or contract, report it immediately. Federal agencies and inspectors general all have hotlines to report fraud and abuse. You can request anonymity.

For suspected theft of government funds or property, contact the agency involved or the Department of Justice Public Integrity Section. Your information could lead to a federal embezzlement investigation and charges.

Conclusion

Federal embezzlement is a serious white collar crime that comes with potentially lengthy prison sentences and steep fines. The federal statutes are broad and far-reaching when it comes to public funds and property. Skilled legal defense is crucial for anyone facing such charges. With an in-depth understanding of the applicable laws and defense strategies, it may be possible to obtain a favorable outcome or minimized penalties.