BY J. BRADD GREENE
What is Embezzlement?*
Embezzlement, also known as em- ployee theft is the act of wrongfully appropriating funds that have been entrusted to your care, but which are owned by someone else.
Accounting embezzlement is the manipulation of accounting records to hide the theft of funds.
Embezzlement can be prosecuted as criminal fraud or civil fraud. In the case of civil fraud, the employer can bring the lawsuit against the em- ployee.
What Are the Factors in Embezzlement?*
For a charge of embezzlement to be supported, four factors must be present and must be proven. Tere must be a fiduciary relationship between the two parties; which is relationship of trust, a responsibility for taking care of the money or property (for example), and a reliance by one party on the other. Te defendant must have acquired the prop- erty through the relationship. Te de- fendant must have taken ownership of the property or transferred the property to someone else (called conveyance). And the defendant’s actions were inten- tional.
Examples of Embezzlement
Overpaying a vendor and sharing in the ill-gotten gains. Te bank teller who pockets deposits, the book- keeper who takes customer refunds for themselves.
Te attorney who uses the funds in an escrow account for themselves.
Te payroll clerk who doesn’t deposit the correct amount of employment tax, keeping the rest for himself.
Employees in retail businesses have a habit of walking off with merchandise.
Of course, computer fraud by em- ployees has many facets, many of which involve a fraudulent transfer of funds by an employee.
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