When facing federal embezzlement charges, it is important to speak with a defense attorney who can explain how federal law applies to your situation. A federal embezzlement accusation can lead to prison, fines, restitution, and forfeiture, and the penalties depend on which federal statute is charged.
At Touma Law, our attorneys represent people charged with or under investigation for federal embezzlement. General information on this page is not legal advice. A licensed South Carolina attorney at the firm must review the facts of your case before you rely on it.
If you are facing federal embezzlement charges or are under investigation for alleged embezzlement, reach out to our team. You can also read about our federal criminal defense attorneys.
Call (864) 618-2323 today to schedule a free consultation and learn more about how we can help protect your rights.
How is Embezzlement Defined Under Federal Law?
There is no single federal “embezzlement” statute. Several federal laws cover the fraudulent taking or misuse of money or property that was lawfully placed in someone’s care, and each one has its own elements. In general terms, embezzlement involves a person who was given lawful access to money or property and then took or misused it for their own benefit or for someone else’s.
Depending on the statute charged, the government may have to prove things such as:
- Entrustment or Authority: Some statutes, such as the bank embezzlement laws, require that the person was an officer, employee, or agent of a particular kind of institution and had custody or care of the funds.
- Conversion or Misapplication: The person took, converted, or misapplied the money or property. 18 U.S.C. § 641, for example, covers a person who “embezzles, steals, purloins, or knowingly converts” property of the United States.
- Intent: The government must prove the required state of mind for the statute charged. Some statutes require that the act be done knowingly, willfully, or with intent to defraud.
Embezzlement can take various forms, such as skimming cash receipts, diverting funds into personal accounts, or altering financial records to conceal a taking. It is treated as a white-collar offense, and a conviction can lead to imprisonment, fines, restitution, and other consequences.
Federal Laws and Statutes Related to Embezzlement
Federal laws related to embezzlement are found mainly in Title 18 of the United States Code. The most commonly charged sections include:
- 18 U.S.C. § 641, public money, property, or records: Covers embezzling, stealing, or knowingly converting money or property of the United States or its agencies. The maximum penalty is 10 years in prison, or 1 year if the value does not exceed $1,000.
- 18 U.S.C. § 656, theft, embezzlement, or misapplication by a bank officer or employee: Applies to officers, directors, agents, and employees of certain banks, including Federal Reserve banks, national banks, and insured banks. The maximum penalty is 30 years in prison and a $1,000,000 fine, or 1 year if the amount does not exceed $1,000.
- 18 U.S.C. § 657, lending, credit, and insurance institutions: Applies to officers, agents, and employees of certain federal lending, credit, and insurance institutions. The penalties are the same as under § 656.
- 18 U.S.C. § 666, theft or bribery concerning programs receiving federal funds: Applies to an agent of an organization or of a state or local government that received more than $10,000 in federal benefits in a one-year period, when the property involved is valued at $5,000 or more. The maximum penalty is 10 years in prison.
- 18 U.S.C. § 1341 and 18 U.S.C. § 1343, mail fraud and wire fraud: Embezzlement schemes that use the mail or interstate wire communications, such as electronic transfers, are sometimes charged this way. The maximum penalty is 20 years in prison, or 30 years and a $1,000,000 fine if the offense affects a financial institution or involves a presidentially declared disaster or emergency.
Fines for federal felonies are also governed by 18 U.S.C. § 3571, which allows a fine of up to $250,000 for an individual for a felony, or up to twice the gross gain or twice the gross loss if that is greater. The charge, the amount involved, and the facts of the case determine which statute applies.
Potential Penalties for Federal Embezzlement Convictions
The penalties for a federal embezzlement conviction depend on the statute charged, the amount involved, and the factors the court considers at sentencing. They can include:
- Prison Sentence: The maximum terms are listed above and range from 1 year to 30 years depending on the statute and the amount. The court calculates an advisory range under the Sentencing Guidelines and considers the factors in 18 U.S.C. § 3553(a).
- Fines: The fine limits are set by the statute charged and by 18 U.S.C. § 3571, as described above.
- Restitution: For offenses against property under Title 18, including offenses committed by fraud or deceit, the court must order restitution to an identifiable victim who suffered a pecuniary loss (18 U.S.C. § 3663A).
- Probation: Federal law allows a sentence of probation for some offenses, but not for Class A or Class B felonies or where a statute bars it (18 U.S.C. § 3561). Whether probation is realistic in a given case depends on the charge and the Guidelines.
- Forfeiture: Property traceable to certain offenses can be forfeited. See, for example, 18 U.S.C. § 981(a)(1)(C), which covers proceeds of violations of §§ 656 and 657 and of offenses that count as “specified unlawful activity.”
- Professional and Employment Consequences: A conviction can affect a professional license or a person’s employment. Which consequences apply depends on the licensing body and the employer.
- Civil Lawsuits: Victims may also bring civil claims for their losses.
The court’s Guidelines calculation and the judge’s discretion determine the sentence in an individual case.
Common Defense Strategies for Embezzlement Charges
When facing federal embezzlement charges, a person needs to understand the defenses that may apply. Common defense strategies include:
- Lack of Intent: Arguing that the client did not have the required intent, for example because of a misunderstanding, mistake, or coercion.
- Lack of Evidence: Challenging the government’s evidence, including gaps, inconsistencies, or weaknesses. This may involve reviewing financial records, transaction details, and witness testimony.
- Good Faith Belief: In some cases a person accused of embezzlement may have believed in good faith that they had authority to access or use the funds or property.
- Duress or Coercion: Arguing that the defendant was compelled to act under threat or pressure, supported by evidence of the threats.
- Insufficient Control or Authority: Arguing that the client lacked the custody, control, or position the statute requires, which can undercut the government’s case.
These strategies challenge the government’s case or the evidence against the accused. Which ones apply depends on the facts of each case.
How is Federal Embezzlement Different From Other Theft Crimes?
Federal embezzlement differs from other theft crimes mainly in jurisdiction and in the nature of the offense. Here are some key distinctions:
Jurisdiction
These cases are prosecuted under federal law and usually involve property or funds connected to the federal government, a federally regulated financial institution, an organization receiving federal funds, or the use of the mail or interstate wires. Other theft crimes, such as larceny or robbery, are usually prosecuted by the state when they involve property that has no such federal connection.
Nature of the Offense
Embezzlement involves taking or misusing property that the person lawfully had access to, often through a position of trust or authority. That distinguishes it from other theft crimes, where the person takes property without permission or by force. Some federal embezzlement statutes, such as those covering bank employees, apply to people in a particular position. Others, such as § 641, are written more broadly.
Penalties
Federal charges can lead to prison, fines, restitution, and forfeiture. The severity depends on the statute charged, the amount involved, and the defendant’s criminal history. Penalties for other theft crimes vary by jurisdiction and the circumstances of the offense.
Federal embezzlement cases involve legal questions that differ from state theft cases. A defendant facing federal charges should speak with a criminal defense lawyer who can review the specific statute and the evidence.
Need Help With an Embezzlement Charge?
If you are facing federal embezzlement charges, an attorney can review the charge, explain the process, and discuss your options. At Touma Law, our attorneys represent people charged with federal embezzlement.
Contact us today to schedule a consultation. A licensed South Carolina attorney at the firm must review the facts of your case before any advice is given about it.
