embezzlement | federal embezzlement charges

Embezzlement | Federal Embezzlement Charges and Defenses

Embezzlement

The distinguishing feature of embezzlement cases is that they involve a betrayal of trust. Put another way, embezzlement is a theft that occurs when someone entrusted with keeping property, usually money, takes it for himself.

While private money is oftentimes protected using state theft statutes, which can be very serious, ‘public monies’ are protected under federal law. That term is defined under 18 USC 641 as “anything of value of the United States.” That is not to say that governmental actors who use the force of their position to take private money are not also subject to federal prosecution.

Public Monies

Under federal law, prosecutors can establish embezzlement of public monies in many ways. One of the most common prosecution theories is a general prohibition of embezzlement under 18 USC 641 which prohibits a person from “knowingly convert[ing] to his use or the use of another… anything of value of the United States.” Violators could be imprisoned up to 10 years.

Other embezzlement statutes apply to particular individuals who have a duty to properly account for public monies. Under 18 USC 643 federal employees who receive public monies can be prosecuted for failure to render accounts for such monies. This is also considered embezzlement and carries up to 10 years.

18 USC 648 is a bit different. It doesn’t target public employees but persons charged with safekeeping of public monies, such as bank employees. They are also subject to a possible 10 years imprisonment if he or she takes money to which he or she was entrusted.

Additionally, other offenses criminalize taking property that is meant for particular government programs such as financial assistance for employment opportunity or a healthcare program. See 18 USC 641-670.

Private Monies

Other crimes criminalize actions of depositaries, custodians, and federal employees to convert or take private money under the color of authority or abuse their access to private monies as an officer in a bank associated with the Federal Reserve. For example, 18 USC 656 prohibits employees and officers connected to any federal reserve bank, member bank, national bank or insured bank from embezzlement or purloin of the funds “entrusted to the custody or care of such bank.” Yes, that is how the law spells ‘entrusted’ in that statute. This offense carries up to 30 years imprisonment.

18 USC 654 prohibits officers or employees of the United States from embezzling or converting property of another, “which comes into his possession or under his control in the execution of such office” to his own use. This offense also carries a potential for 10 years imprisonment.

It is also illegal to solicit gifts to be offered for the benefit of the United States and then steal such gift. This crime can carry up to 5 years under 18 USC 663.

Ultimately, federal law imposes serious penalties upon persons entrusted with the care of public money and contains multiple statutes to authorize these punishments.

Defending Embezzlement Cases

It is important for any professional assisting persons accused of embezzlement to take significant steps quickly. First, it is important to review and comprehend financial records that track the flow of monies believed to be involved. It is also important to ensure that coworkers of the target are interviewed as well as any management officials to inquire as to the relationship between target and the purported whistleblower who likely initiated the investigation.

These steps are necessary to establish any alternative explanations as to the Government’s narrative. It is possible that federal agents, in a particular case, have only heard versions of the case from a small number of people. Sometimes these people could misunderstand relevant facts or simply are motivated by factors that could challenge the accuracy of the investigation.

Additionally, embezzlement cases can become complex involving thousands of government, business, and financial records. Understanding these documents could make a significant difference to a person accused of stealing or misdirecting public or private funds.

Further, quickly investigating the matter could allow for an opportunity to meet prosecutors and help shape his or her understanding of the case while federal agents are doing their own investigation.

As always, defense attorneys need to offer solid consultative advice and representation if law enforcement officials make efforts to interrogate targets, including, when appropriate, advising targets to elect not to participate in such an interview.

The decision to proceed to trial or attempt to pursue a negotiated plea of guilty is the target’s decision. The attorney has the responsibility of understanding the costs and benefits of both paths in a particular case.

United States Sentencing Guidelines in Embezzlement Cases

As is the case with most financially motivated crimes in the federal system, Section 2B1.1 is the applicable Guideline for many embezzlement cases. Because nearly every federal embezzlement matters carries a statutory range of punishment of up to 10 years imprisonment, the base offense level is typically 6.

The primary driver of federal financial crimes is the intended or actual loss amount. An intended loss is one that a defendant attempted to purloin while the actual loss is the amount that the defendant actually obtained. This is significant because intended losses are generally counted as relevant conduct that can be used to increase a federal sentence. In other words, the amount taken, or intended to be taken, allows for offense levels to be added to the base offense.

Additionally, other offense characteristics can be used to “enhance” a Guideline calculation, or to add offense levels. Examples of such enhancements include enhancements for: involvement of more than 10 victims, causing substantial financial hardship to more than 5 victims, involvement of members of a charitable or a political organization or members of a government agency, obtaining email addresses through improper means, and abuse of position of trust. This is not an exhaustive list.

Of course, a defendant’s criminal history also has a significant impact upon guideline calculations. Put simply, it does not necessarily take a staggering loss amount, especially combined with the myriad of potential enhancements for federal sentences to involve multiple years imprisonment, including the potential to reach the statutory maximum of 10 years. This is true even in the absence of a significant criminal history.

Also important is the fact that the Guidelines are not mandatory. Judges have the ability to pronounce sentences above and below the Guidelines for many reasons that a defense lawyer must be able to present to either present (if beneficial) or address (if harmful). It is also necessary for an attorney to be able to properly evaluate the potential for benefits for persons who provide substantial cooperation.

Ultimately, the complexity of these cases, combined with the high level of sentencing exposure they entail, require thorough, proactive representation from attorneys who understand financial crimes, federal law, and law enforcement tactics. If you are in the crosshairs of a federal investigation or have been charged with embezzlement, call us at (817) 203-2220 or send us a message online:

About the Author
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Benson Varghese

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Benson Varghese is the Managing Partner of Varghese Summersett PLLC. He is a state and federal practitioner who has handled thousands criminal cases and taken over 100 cases to trial by jury. Benson is frequently called upon to handle cases that require a high degree of knowledge in technology, scientific evidence, forensic evidence, as well as serious intoxication cases. The lawyers at Varghese Summersett PLLC exclusively handle criminal defense matters.