Embezzlement is the theft of property entrusted to someone, often money or financial instruments, by someone in a position of trust. Penalties vary by jurisdiction and amount taken. Warning signs include sudden increases in an employee’s standard of living or unexplained declines in company profits.
Embezzlement is the criminal act of a person who steals property entrusted to him. It happens most commonly with money, stocks and bonds. For an act to be legally considered embezzlement, a few different factors must be present, including intentionally stealing the property and being in a position of trust. Some people successfully steal for years without getting caught, but most of the time this is not the case. Penalties for this crime vary depending on the jurisdiction and how much was taken.
Types of properties and required circumstances
Both tangible and intangible property can be subtracted. The tangible type includes things like paintings, office supplies, pieces of equipment, and jewelry; while the immaterial type includes financial instruments such as stocks, bonds, and cash. For a theft to be legally considered embezzlement, the person carrying out the theft must be in a position of trust with someone else’s belongings. This means that unlike burglary, no violations occur. In addition to the trust requirement, the person taking ownership must claim ownership of it.
Examples
There are many different types of embezzlement, both in terms of private and corporate financing. A father could evade her daughter by taking money from a trust set up for her that he supervises, or the chief financial officer of a charity could do so by taking funds donated for her private use. Employees also steal this way by not putting money in a drawer when they should, or by creating an imaginary bill and then taking the money used to pay it. Similarly, a manager can create an imaginary employee and then take the salary owed to him or her. Another common type of embezzlement is slightly under reporting the revenue and keeping the difference.
Warning signs
Individuals and companies can avoid becoming victims of an embezzlement scheme by carrying out frequent and regular audits. They may also look for warning signs, such as an employee taking a sudden jump in her standard of living with no extra income to explain it, or seeing an unexplained decline in company profits. Other signs include disorganized financial records or unexplained disappearance of accounts and documents.
sanctions
In most jurisdictions, embezzlement is punishable by a fine and possibly jail time. Depending on the amount of property taken, a convicted offender receives a misdemeanor or felony in his criminal record. In a famous 2009 ruling, Bernie Madoff, a former stockbroker, received a 150-year prison sentence for taking up to $65 billion dollars from investors. In addition to penalties for theft, kidnappers can also be penalized for failing to include stolen items or funds on their tax returns. In the United States, the Internal Revenue Service (IRS) allows those who return their funds to get a tax break, but if they don’t include them on their tax return, they are liable for tax evasion.
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