Embezzlement vs Fraud

Embezzlement and fraud are two ideas crimes that are very closely related. In fact, fraudulent intent is a key element in many embezzlement cases. Many individuals believe that fraud and embezzlement really denote the same thing. However, they are not actually the same thing. Fraud occurs when an individual intentionally misleads or cheats someone else (usually for monetary gain). On the other hand, embezzlement is when an individual is entrusted with a certain asset and intentionally withholds that asset and takes it for him/herself.

Both fraud and embezzlement can be a series of different specific crimes. There are many different types of embezzlement and many different types of fraud. However, in just about all cases both crimes are very serious and require your immediate attention.

What’s the Definition of Fraud?

Fraud is generally a civil crime, however, in some cases, it can be considered more serious. Typically in cases of fraud, an individual defrauds another individual without their knowledge. Eventually, the other individual finds out that he has been defrauded and files a lawsuit. If enough evidence is found to show that the first individual was intentionally committing a fraudulent act, then that person may face very serious consequences. Not all cases of fraud are the same, but generally, they follow this pattern. Just as with embezzlement, most fraud cases require that the fraud was committed intentionally.

Identity theft is a form of individual fraud where a targeted person can fall victim to various scams, including phishing and Ponzi schemes. Reporting such incidents is crucial to help law enforcement combat these fraudulent activities and protect the community.

In many cases, because embezzlement typically happens through a series of fraudulent actions, claimants can file a fraud case and an embezzlement case separately. This means you may be found guilty of one but not the other, or guilty of both.

How is Embezzlement a Crime?

This generally occurs more systematically than fraud and typically happens when someone is in a position of trust (such as a banker or financial advisor). Embezzlement often involves the misappropriation of personal property entrusted to the individual. Generally, embezzlement occurs in small increments over time. For example, a bank teller who deposits small amounts of funds into her own account gradually. Embezzlement may be a much more serious crime than fraud because it can involve multiple fraudulent acts and can even rise to the level of a felony and a federal crime. Punishments depend on what was embezzled and its total value.

Types of Embezzlement

• Government Embezzlement: Officers and other employees tasked with handling payments can face legal consequences for not adhering to lawful payment amounts.
• Asset Embezzlement: This involves the unlawful appropriation or concealment of personal property for fraudulent purposes. The specific value or legitimate ownership of such property is often a key factor in legal proceedings.
• Payroll Embezzlement: Persons handling public funds have legal responsibilities, and failing to comply with their duties can lead to severe consequences.
• Accounts Payable Embezzlement: The safe keeping of funds is crucial, and misusing or failing to adequately protect such property can result in significant legal repercussions.
• Cash Embezzlement: The improper handling or conversion of such money carries serious legal implications and penalties.
• Accounts Receivable Embezzlement: Such persons engaging in unlawful activities like embezzlement face stringent legal consequences.

Key Differences Between Embezzlement and Fraud

While both embezzlement and fraud are financial crimes, they differ in key aspects. Embezzlement involves the theft of money or assets by someone entrusted with their safekeeping, typically an employee or trusted individual. This crime often occurs over time, with the perpetrator gradually siphoning off funds or assets.

Fraud, on the other hand, involves deception or misrepresentation to achieve financial gain. It can be committed by a broader range of individuals and organizations and may occur in a single transaction or through a series of deceptive actions.

Understanding these differences is crucial for identifying and addressing each crime appropriately, as the legal and investigative approaches may vary.

Consequences of Embezzlement and Fraud

The consequences of embezzlement and fraud can be severe, impacting both the victims and the perpetrators. For businesses and employers, embezzlement can lead to significant financial losses, damage to reputation, and loss of trust among stakeholders. Similarly, fraud can result in substantial financial harm and reputational damage for individuals and organizations.

Legal consequences for those who commit these crimes can include hefty fines, restitution, and imprisonment. Additionally, individuals found guilty of embezzlement or fraud may face long-term repercussions, such as damage to their professional reputation and career prospects.

Experienced Embezzlement and Fraud Attorney

If you are being charged with state or federal embezzlement, contact embezzlement attorney David M. Dudley right away. David has decades of experience defending clients around the country and has worked on numerous cases involving state and federal embezzlement. For more than 25 years, Mr. Dudley’s law practice has taken him across the country, where he has represented individuals facing major criminal allegations in 36 different states. Those cases have been handled in both the trial and appellate courts, state and federal. He is admitted to the United States Supreme Court and seven federal circuit courts of appeal. Call David at 800-805-6167 today for a free case evaluation.