Embezzlement

Embezzlement is mostly defined as the fraudulent misappropriation of goods of another by a servant, an agent, or another person to whom possession of the goods has been entrusted. The offense has no single or precise definition. Typically, embezzlement occurs when a person gains possession of goods lawfully and subsequently misappropriates them. In this respect, embezzlement is to be contrasted with the crime of larceny, which requires the taking of goods from the possession of another without the latter’s consent. The scope of the old common-law crime of larceny has been gradually extended by various manipulations of the concept of possession. An English statute of 1529 held in effect that a servant who carried away goods entrusted to him by his master had committed larceny, since the legal title as opposed to the physical possession had never been transferred to him. This extension failed to cover situations in which the servant received goods from a third person intended for his master. The failure of the law of larceny to provide adequate protection for the property of employers against the depredations of servants and employees led to the passage of specific statutes.

Embezzlement is the act of withholding assets for the purpose of conversion (theft) of such assets, by one or more persons to whom the assets were entrusted, either to be held or to be used for specific purposes.[1] Embezzlement is a type of financial fraud. For example, a lawyer might embezzle funds from the trust accounts of their clients; a financial advisor might embezzle the funds of investors; and a husband or a wife might embezzle funds from a bank account jointly held with the spouse.

Embezzlement usually is a premeditated crime, performed methodically, with precautions that conceal the criminal conversion of the property, which occurs without the knowledge or consent of the affected person. Often it involves the trusted individual embezzling only a small proportion of the total of the funds or resources they receive or control, in an attempt to minimize the risk of the detection of the misallocation of the funds or resources. When successful, embezzlements may continue for many years without detection. The victims often realize that the funds, savings, assets, or other resources, are missing and that they have been duped by the embezzler, only when a relatively large proportion of the funds are needed at one time; or the funds are called upon for another use; or when a major institutional reorganization (the closing or moving of a plant or business office, or a merger/acquisition of a firm) requires the complete and independent accounting of all real and liquid assets, prior to or concurrent with the reorganization.

In the United States, embezzlement is a statutory offence that, depending on the circumstances, may be a crime under state law, federal law, or both; therefore, the definition of the crime of embezzlement varies according to the given statute.[2] Typically, the criminal elements of embezzlement are the fraudulent conversion of the property of another person by the person who has lawful possession of the property.

Elements common to embezzlement are as follows:                                                                                (1) the property must belong to a person other than the accused, such as an employer or principal.        (2) the property must be converted subsequent to the defendant's original and lawful possession of it  (3) the defendant must be in a position of trust, so that the property is held by him or her pursuant to some fiduciary duty.                                                                                                                                  (4) the defendant must have an intent to defraud the owner at the time of the conversion.

 The principal or employer must be the owner of the property embezzled by an agent or employee at the time the offense is committed. Under many statutes, the ownership requirement is expressed as the property of another. It is sufficient if any person, other than the defendant, owns the property and it does not matter who has title to it or that it is owned by more than one person.

Generally, a debtor and a creditor, or an agent and a BROKER, do not have a fiduciary relationship sufficient for the offense. There must be some further indication that one person has a duty to care for and exert some control over the other's property. The most common type of trust relationships are those existing among corporate officers, partners, and employers and their employees.

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