Embezzling is the act of taking money that has been placed in your trust but belongs to another person. For instance, someone who works in a bank may secretly steal money that he or she has been entrusted to look after. This money belongs to the bank’s customers, and the employee’s action can be considered embezzling. One of the biggest factors in embezzling is that the embezzler is in a position of trust with someone else’s money. Therefore, no trespassing is necessary for the theft to take place. There have been many cases of embezzlement, and usually, sooner or later, the embezzler is caught out.
Historically, embezzlement became a crime because thefts were occurring in which the elements of larceny could not be met because the thief had the right to possess the funds; thus, the prosecution could not prove the element of a “trespassory taking.” Meanwhile, proving embezzlement only requires showing either that the employee had possession of the goods or funds because of the employee’s position or that the employee had the authority to exercise substantial control over the goods or funds. Courts determine the question of substantial control by considering the employee’s job title, job description, and the practices of that particular company.
Since embezzlement is usually discovered by way of circumstantial evidence, an active approach by the employer is required to uncover the perpetrators of the crime. An investigation should be conducted quickly but subtly. Company officials should compile a list of employees who may have had the opportunity to commit the suspected embezzlement. These employees should be interviewed, more than once if necessary. The employer should try to recover as many records as possible to find accounting discrepancies or other evidence. If the crime appears to exist on a large scale, the employer may need to contact outside advisors – including attorneys, insurance agents, and investigative specialists – to assist with the inquiry.
If guilt can be assigned to one or more individuals, the employer will have to determine what action to take against them within the company. Termination is not out of the question if there is strong evidence indicating guilt. Conversion is an act that interferes with an owner’s right of possession to his or her property. For purposes of embezzlement, conversion involves an unauthorized assumption of the right of ownership over another’s property. It may, for example, occur when a person is entrusted with property for one purpose and uses it for another purpose without the consent of the owner. Generally, any type of conversion that occurs after a person obtains lawful possession of property is sufficient.
Embezzlement is a crime against ownership; that is, the owner’s right to control the disposition and use of the property. The conversion element requires a substantial interference with the true owner’s property rights (unlike larceny, where the slightest movement of the property when accompanied by the intent to deprive one of the possession of the property permanently is sufficient).Although a failure to return property is evidence of conversion, it does not necessarily constitute embezzlement-absent proof of criminal intent.