Have you been accused of embezzlement? Accusations that you have committed any type of crime can be difficult. But you may also find that the legal landscape related to embezzlement makes accusations even more of a challenge.
Embezzlement, like a number of white collar crimes, can be very confusing. To help you navigate any charges you may face and successfully defend yourself, here are a few answers to some of the biggest questions you may have.
Is Embezzlement Theft?
Embezzlement and theft are similar, but they are not interchangeable. Embezzlement is a form of theft, but the charge is based on the fact that the embezzler was entrusted with someone else’s property in the course of duty. Anyone can break into a store at night and commit theft by stealing money from the register. However, if the store hires a clerk to make bank deposits, they commit embezzlement if they steal those deposits.
This is an important distinction due to the additional burden of proof that comes with proving all the elements of embezzlement. For example, the prosecution must show that you had control or charge of the property. A random employee who takes money from a co-worker’s register, for example, wasn’t necessarily charged with that property and so may not be convicted of embezzling it.
Is Embezzlement a Felony?
In New York, as in most states, the answer to this question depends on the circumstances. New York law starts with petit larceny for embezzling less than $1,000. This is a misdemeanor. It becomes grand larceny and felony charges start as a Class E if convicted of embezzling up to $3,000. Class D begins at $3,000, Class C at $50,0000, and Class B at $100.000.
Is Embezzlement a Criminal or Civil Matter?
Embezzlement is a criminal charge. But the action could also result in civil legal repercussions. With or without a criminal conviction, the person who was embezzled from can often proceed with a civil lawsuit related to the theft. Under civil law, this may take the form of a complaint of breach of contract, unjust enrichment, or conversion.
If you could face both criminal and civil trials, the judge and the plaintiff will likely ensure that the criminal case is completed first. Why? First, this can help the plaintiff as they have the first trial to draw upon. Second — and importantly for the defendant — a person’s right to remain silent against criminal charges takes precedence over a civil case.
What Must the Prosecution Prove?
To get a successful conviction of embezzlement, the prosecution generally must prove four basic elements.
The first is that the defendant had a fiduciary duty, meaning they were entrusted with the property of another. The property must have been obtained through this relationship (rather than through other, unrelated, means). Third, the property was converted, or transferred to the defendant or someone else’s ownership, depriving the rightful owner. Finally, the defendant acted willfully and intentionally.
Because these and other factors all go into an embezzlement conviction, you may build a successful case if you can dismantle at least one key element. You might be able to demonstrate that you legitimately thought the property was yours, for instance, casting doubt on having any intent to defraud the other party.
Do You Really Have to Pay Taxes?
You may end up with another headache to deal with if convicted of embezzlement: the IRS. United States income tax law requires that taxpayers report all forms of eligible income and pay appropriate taxes on it. As unusual as it may sound, this includes illegal income.
If you are found to have embezzled money or property of value, the IRS, then, expects to see that listed as income on your tax returns. And because it probably hasn’t been, you may owe penalties and interest as well. The only good news about this is that once embezzled income is reported and taxed, you may also be able to deduct restitution as an expense.
What If You Pay It Back?
Unfortunately, paying back the money or returning the property doesn’t absolve the embezzler of guilt. In the eyes of the law, the crime occurred when property was illegally taken. This means that even if you really did intend to put the property back when you could, borrowing isn’t generally a successful defense in either civil or criminal cases.
Where Should You Start?
Clearly, there are many nuances involved in embezzlement charges and civil cases. Your best defense is to start working with an experienced criminal law attorney in your state.
New York residents can call on Siben & Siben LLP. We’ll answer all your questions and help you understand the legal process you face. Then, we’ll work with you to build the best defense against both criminal and civil complaints. Call today to make an appointment or get more answers.