Federal Embezzlement Defense Attorney

Embezzlement cases usually begin with an internal audit rather than a police report, and the defendant is usually someone who had lawful access to the money.

That lawful access is the defining feature. These are not theft cases about taking — they are conversion cases about what happened after the money was lawfully in your hands.

Which statute applies

• 18 U.S.C. § 641 — embezzlement or theft of public money, property, or records. Up to 10 years, or 1 year if the value does not exceed $1,000.
• 18 U.S.C. § 656 — embezzlement by an officer, director, agent, or employee of a federally connected bank. Up to 30 years.
• 18 U.S.C. § 664 — theft or embezzlement from an employee benefit plan governed by ERISA. Up to 5 years.
• 18 U.S.C. § 666 — theft or bribery involving an organization, government, or agency receiving more than $10,000 in federal funds in a year. Up to 10 years.
• 18 U.S.C. § 1163 — embezzlement from an Indian tribal organization.

Section 666 has unusually broad reach. Any organization receiving over $10,000 in federal funds annually is covered — which includes a great many school districts, municipalities, healthcare providers, housing authorities, and non-profits whose employees do not think of themselves as handling federal money at all.

Wire fraud is very often charged in parallel, because virtually any modern misappropriation involves an electronic transfer.

The common elements

Across the statutes the government must generally prove:

1. The defendant was entrusted with the money or property, or had lawful possession of it;
2. The property belonged to the protected entity;
3. The defendant converted it to their own use or the use of another; and
4. The defendant acted with intent to defraud or to deprive the owner of its use.

The entrustment element is what distinguishes embezzlement from theft. You had the money lawfully. The wrong is in what you did with it afterwards.

Intent is where these cases are decided

The dispute in most embezzlement cases is not whether money moved. The records show that. It is whether the movement was criminal.

Recurring and genuine defenses:

Authorisation. The transaction was permitted, or the defendant reasonably believed it was. Loose internal controls, informal practices, and verbal approvals from people who now deny giving them are common in small organizations.

Claim of right. The defendant believed they were entitled to the funds — unpaid compensation, reimbursement of expenses, a loan understood to be permitted, or a distribution they believed was owed. A genuine belief in entitlement defeats intent to defraud even if the belief was mistaken.

Intent to repay. This is more nuanced than defendants hope. Intent to repay is generally not a complete defense to the taking, because the offense is complete on conversion. But it is directly relevant to intent to defraud where the arrangement genuinely resembled a loan, and it matters substantially at sentencing.

Accounting error and commingling. Poor bookkeeping is not embezzlement. Where personal and business funds were commingled with the owner's knowledge, characterising individual transactions as criminal requires more than a spreadsheet.

Sentencing turns on the loss figure

Sentencing runs through U.S.S.G. § 2B1.1, and the loss amount dominates — up to 20 levels added on the loss table alone. Enhancements apply for the number of victims, sophisticated means, and abuse of a position of trust under § 3B1.3, which applies in most embezzlement cases almost by definition.

The government's initial loss figure is frequently overstated. It may aggregate every questionable transaction over years without separating authorized ones, count gross rather than net, ignore repayments actually made, or include amounts the defendant was genuinely owed. Independent forensic accounting routinely moves this figure a band or two, and each band is months.

Restitution is mandatory, and forfeiture may reach both proceeds and substitute assets.

The pre-charge window matters here more than most

Embezzlement cases usually surface internally first — an audit, an accusation, a suspension. There is often a substantial gap between that and any federal referral.

That gap is valuable. Restitution made before charges, a documented explanation of authorisation, and a clean forensic accounting presented to the prosecutor have all resulted in declinations or in charges brought at a materially lower loss figure. It is also the period in which people do the most damage to themselves, by explaining to HR without counsel or by altering records.

Related pages

White collar defense overview · Wire fraud · Bribery and public corruption · Federal target letters