Understanding White Collar Theft Crimes: The Difference Between Embezzlement, Larceny, and False Pretenses

Because embezzlement, larceny, and false pretenses are all crimes that involve different aspects of dishonesty and theft, they oftentimes get confused with one another. However, embezzlement, larceny, and false pretenses are all different crimes that carry different potential punishments. Our Los Angeles federal criminal defense attorney, David Dudley, is here to help you understand the key differences between these white-collar crimes.

What Defines the Crime of Embezzlement?

Embezzlement typically occurs when a defendant, placed in a position of trust, exploits that trust to manipulate the situation and unlawfully take property for personal gain or for others. Those accused of embezzlement are often charged with withholding assets—usually financial—for the purpose of theft. For an act to qualify as embezzlement, the defendant must have been entrusted with the assets and exercised substantial control over them, which were intended for a specific purpose, but instead, the assets were misappropriated or stolen.

One example of embezzling could be a financial advisor taking funds from his clients that were intended to be invested in stocks and instead using those funds for his own personal gain. Fraudulent conversion is a key aspect of embezzlement, highlighting the complexity of proving theft when the offender had lawful possession of the property initially.

Elements of Embezzlement: For an act to be considered embezzlement, the defendant must have been entrusted with such property, which they then misappropriated or converted for their own use. This lawful possession before the fraudulent appropriation is crucial in differentiating embezzlement from other theft-related crimes.

What is the Crime of Larceny?

Embezzlement differs from larceny in two key ways:

1. Actual Theft Required: In embezzlement, the individual must physically steal something. Mere intent to convert (steal) is not enough for a conviction.
2. Lawful Possession: The assets must have been lawfully in the embezzler’s possession before being misappropriated. The original acquisition cannot be trespassory.

In contrast, larceny does not require these conditions. It is defined as the nonviolent theft and removal of personal property. Unlike embezzlement, larceny applies specifically to tangible items that can be physically taken and carried away.

Larceny was originally defined under the common law of England, which has significantly influenced the classification of larceny as an offense in jurisdictions that adopted it. This foundational legal framework has evolved over time, shaping how larceny is applied in various regions.

What Defines False Pretenses?

False pretenses involve dishonesty, specifically obtaining property by intentionally misrepresenting a fact about the past or present. However, if the individual genuinely believes their false statement to be true, it does not qualify as false pretenses. Unlike larceny, false pretenses are not limited to tangible items; they can apply to money, goods, services, or any item of value.

Understanding common scams can help you spot red flags and protect yourself from becoming a victim. Here are common examples of fake pretenses used in crimes.

• Phony Charity: Fake charity solicitations for donations.
• False Emergency: Claiming a loved one is in trouble to scam money.
• Impersonating Authorities: Pretending to be police or government officials to extort.
• Fake Job Offer: Offering nonexistent jobs to steal information or money.
• Romance Scams: Building trust in fake relationships for financial gain.
• Lottery Scam: Claiming a prize requires payment of fees.
• Bogus Sales: Selling nonexistent goods or services.
• Home Repair Fraud: Taking payment for repairs and disappearing.
• Rental Scams: Advertising fake properties to collect deposits.
• Phishing Emails: Posing as trusted entities to steal credentials.

Intent and Personal Property

Intent is a crucial element in both larceny and embezzlement. In larceny, the intent to deprive the rightful owner of their property must exist at the time of the taking. In embezzlement, the intent to deprive the rightful owner of their property may develop after the property has been taken.

Personal property is also a key concept in both larceny and embezzlement. Personal property refers to goods, money, or services that are not real property. In larceny, the property in question must be personal property, while in embezzlement, the property in question must be personal property that has been entrusted to the defendant.

Prosecution and Charging

Prosecuting and charging embezzlement can be complex and nuanced. The prosecution must establish the elements of embezzlement, including entrustment, fraudulent appropriation, intent to deprive, and personal property.

In the United States, embezzlement is typically charged as a felony, with penalties ranging from fines to imprisonment. The Model Penal Code provides a framework for prosecuting and charging embezzlement, and many states have adopted similar laws.

The Supreme Court has also weighed in on embezzlement, establishing key precedents for prosecuting and charging the crime. For example, the Court has held that the intent to deprive the rightful owner of their property is a key element of embezzlement, and that the prosecution must establish this intent beyond a reasonable doubt.

Experienced Criminal Defense Attorney

If you are being charged with embezzlement, larceny, or false pretenses,contact David M. Dudley today. Mr. Dudley is a Harvard educated federal and state criminal defense attorney who is ready to help you. For more than 25 years, Mr. Dudley’s law practice has taken him across the country, representing individuals facing major criminal allegations in 36 different states, handling matters 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 800-805-6167 for a free case evaluation.