Embezzlement: What Is It, and Is There a Civil Remedy?

We don’t often think of criminal law and business law as mixing. But many things that can happen in business, can not only lead to civil liability, but criminal liability as well. One common crime that many business owners find themselves facing—whether they are accused of doing it, or whether they are a victim of the crime–is embezzlement.

What is Embezzlement?

Embezzlement is a theft crime, but it is different from other theft crimes, and ideally suited for a business environment, because the first step in embezzlement is that the perpetrator gains access to the funds that were stolen, legally at first.

There are many instances where businesses can be victims of embezzlement. Take these examples:

• Someone with access to the business’ PayPal, Venmo, or Zelle accounts, diverts some of those funds into their personal bank account
• An employee selling items to the public, pockets some of the cash, before it gets deposited into your business’ accounts
• You entrust an employee or co-owner of the business to make a deposit at the bank, but the person depositing “skims some money off the top,” pocketing some of the money before depositing it
• An accountant or controller uses corporate funds to purchase an item, or fund their own business venture, or give a company contract to a relative
• A cashier uses some of the money in a cash register for his or her personal use
• An employee alters books and records of the company, to hide the fact that he or she is taking money from the company

In all of these situations, the perpetrator had possession of the funds, legally, at first.

Many perpetrators hope that the money they are taking is not noticeable, so embezzlement often happens where there is a lot of money in one place, and the wrongdoer believes nobody will notice a few dollars are missing here and there.

And it is still embezzlement, even if the perpetrator intended to pay the money back later, or saw the stolen money as a loan that he or she intended to repay.

Criminal and Civil Remedies

If your business is a victim of embezzlement, you need to make a police report, and then bring it to the attention of the State’s attorney for criminal prosecution. The state may or may not take up the case, and press changes.

Even if they do not press charges for embezzlement, you still have remedies in civil court.

Embezzlement often can be plead as fraud, or fraudulent conversion, or civil theft, or other remedies, that would allow you to bring a lawsuit for civil damages against the perpetrator. You can bring, and potentially win, these cases, regardless of whether or not the state ever brings a criminal case against the wrongdoer.

Have you been defrauded, or are you a victim of conversion of your money or property? Call the West Palm Beach commercial litigation attorneys at Pike & Lustig today.

Source:

justice.gov/archives/jm/criminal-resource-manual-1005-embezzlement