Embezzlement Defense With a New York Criminal LawyerNew York Criminal Lawyer Gavel and Dollar Bills

Embezzlement is one of the most common types of white collar crimes that New York prosecutors go after. Embezzlement is a type of financial fraud and involves the accused withholding money or other assets from the victim as a means of theft. The penalties for embezzlement can be very severe in New York and can depend upon factors like the amount at stake and also the nature of the relationship between the defendant and the victim.

Like other white collar crimes, the facts and circumstances of an embezzlement case can be very complicated and you will want to speak with a New York criminal lawyer to learn your defenses and next steps. You can face significant prison time for embezzlement and you will want to learn your options and defenses as soon as possible.

Embezzlement Defined

Embezzlement is generally defined as the conversion or theft of assets that have been legally trusted to the defendant. For example, a client may leave his money with a financial advisor with the good faith understanding that the financial professional will invest the funds for the client’s own use. If the financial advisor then uses the money for his or her own purpose, without the client’s knowledge or consent, the financial advisor is now engaging in embezzlement.

There is a wide array of types of embezzlement. In many cases, the accused may engage in a pattern of embezzling relatively small sums over a long period of time. Generally, this is only discovered after a large enough sum has been stolen or if an audit has been performed. In other cases, the embezzler may steal a large sum outright.

To prove embezzlement, prosecutors generally have to show beyond a reasonable doubt the following elements:

  • Fraud. To constitute embezzlement, the actor typically must engage in fraud. This means that the individual must willfully engage in the conduct and intend to defraud another. A simple mistake or reasonable error may not be enough to constitute embezzlement.
  • Conversion. Prosecutors must show that the actor converted the property of another. This means that the embezzler interfered with the property of another to the extent that the rightful owner could no longer control or use the assets. To find conversion, prosecutors must show that the interference with the property owner’s use is substantial. For example, placement of another’s assets in a separate account may not constitute conversion if the assets may easily be placed back into the rightful account.
  • Lawful Possession. What distinguishes embezzlement from other theft crimes is that the embezzler once had lawful right to the property. Usually, the victim of the crime gives the embezzler possession of the property for some purpose. Then, the embezzler uses the property for another unauthorized purpose.
    It is important to note that embezzlement is distinct from other crimes like theft and stealing given that the perpetrator of embezzlement does have lawful possession of the property at some point. With theft or stealing, the perpetrator typically takes something that does belong to them and transfers that property to his or her ownership for the thief’s own use. However, with embezzlement, the actor is entrusted with the property and then breaches that trust by using the property for some unauthorized purpose.

Types of Embezzlement

There are many different ways that someone may engage in embezzlement. Some common ways include:

  • Falsification of Records. Individuals accused of embezzlement often create false records and paperwork to account for the funds to the client when, in fact, they have diverted the funds elsewhere. For example, if someone provided money to his or her lawyer to hold in trust for a family member, the lawyer may give false paperwork showing that the money was deposited in an investment account or stock market brokerage account. However, the embezzler may actually use the money for his own investments or simply to spend on personal possessions.
  • Skimming. Skimming is a particularly difficult form of embezzlement to uncover. Skimming typically involves the conversion of small amounts of money over a long period of time. Looking at each individual transaction, the amount of missing funds may look like a rounding error. However, over the course of a long period of time, the amount skimmed may add up and be quite substantial. Usually, an audit may reveal skimming only after it has gone on for some period of time.
  • False Accounts. Instead of creating false records, the embezzler may sometimes simply create false accounts. In this case, the victim will know where the money is going. However, the victim will have no idea that the account is illegitimate.
  • Ponzi Schemes. Elaborate Ponzi schemes like the one devised by Bernie Madoff are complex forms of embezzlement. The orchestrator of the scheme receives investments from his clients. The embezzler will then use a portion of the sum for his or her own use, while using the other funds to pay off other investors in the form of returns. Eventually, a Ponzi scheme will topple on its own weight as there is not enough money to go around especially when investors start defunding their accounts.

Contact a New York Criminal Lawyer

If you have been charged with embezzlement or other white collar crimes in New York, you will want to work with an experienced attorney. Contrary to popular opinion, someone convicted of a white collar crime in New York does face very serious criminal penalties including serving hard-time in the penitentiary. As a result, you will want experienced New York criminal attorney Frederick L. Sosinsky representing your case. To schedule a free consultation and to discuss the specifics of your case, call us at (212) 285-2270.