Embezzlement is the act of appropriating funds that you have access to and are left in your care but are rightfully owned by another party. Embezzlement i14s often committed by employees, but anyone with fiduciary responsibility can be charged.
Embezzlement is often misunderstood. Businesses think that they’re protected when they’re not, and perpetrators blur the lines about what’s legal and what’s not. To clear up some of the confusion, here are 4 embezzlement myths debunked.
Myth #1: Balanced Books Means There’s No Crime Committed
People who embezzle money are like any other type of criminal in that they don’t want to get caught. Just like it’s a rare shoplifter that doesn’t try to be hide the fact that they’re stealing, when someone’s stealing money from a business, they’re not going to leave blaring clues.
The people who are most likely to commit embezzlement are those that work with accounting in some way. This makes it easy to adjust numbers to cover up missing funds. However, nice looking account records also aren’t going to protect you or your company during an investigation.
Myth #2: An Honest Staff Equals a Low Embezzlement Risk
The number one mistake a company can make is being naïve enough to think it can’t happen to them. Unless you are the only employee in your company, you’re at risk of embezzlement.
Most people who embezzle money aren’t serial embezzlers. It all starts with a need or want. Even an honest employee can be driven to commit unlawful acts when their own personal situation is dire enough. Know your staff, and never assume it won’t happen to you.
Myth #3: My Accountant Will Pick It Up
Businesses that employ an accountant should not automatically feel protected against the threat of fraud. Of all initial detections of embezzlement, the overwhelming majority of them come from tips by employees or associates of the person committing the unlawful act.
While accountants have some tools to help them detect fraud, only about 6% of embezzlement is detected by account reconciliation and a mere 3% by external audit.
The reason for this is that embezzlement is typically hidden under so many layers that it doesn’t trigger an accountant’s radar. Additionally, embezzlement audits can be extremely time consuming and not many companies are interested in paying for these services on a regular basis. Hiring an accountant also does not relieve you of guilt of embezzlement charges.
Myth #4: Don’t Sweat the Small Stuff. Tiny Embezzlements Aren’t a Big Deal
Embezzling amounts that seem like pocket change can be just as serious of an offense as larger amounts. In California, any amount under $950 is considered petty theft and may be punished by a fine of up to $1,000, a term of imprisonment lasting up to six months, or both.
Amounts over $950, even if it was embezzled in small increments, is grand theft worthy of felony sentencing. The embezzlement of $950 can result in a sentence of six months to three years, plus a felony record.
When you’re facing embezzlement charges, you need the best white collar criminal defense team. We’re here to help. Contact us today, and let’s discuss your case.