Misappropriation of Funds
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Ever since the invention of money, thieves have developed any number of ways to steal money that doesn't belong to them. In some situations, the would-be thief already has possession of the money because the owner has entrusted him with it. If that person uses the money for his own purposes, this is known as misappropriation of funds.
Larceny, Embezzlement, Misappropriation
Misappropriation of funds is one type of theft. Here are the common forms of theft crimes:
Larceny. When most people think of theft, they think of someone taking property that belongs to someone else, such as stealing a bicycle. This type of theft crime involves something that you don't currently have rightfully in your possession, and that doesn't belong to you. Shoplifting an item from a store is a common form of larceny.
Embezzlement. Another theft crime is known as embezzlement, which involves taking property that you already possess, but do not own. With embezzlement, a person who is entrusted to manage or control someone else's property uses that property inappropriately, and to the person's own benefit. An employee who uses company property for his personal projects commits embezzlement. Embezzlement can encompass both money and other forms of property.
Misappropriation. Misappropriation of funds is embezzlement of money only. For example, the treasurer of a club who diverts club funds to his own bank account has both embezzled and misappropriated the money.
Robbery. Be careful not to confuse larceny with robbery. Robbery is the forceful taking of someone else's property, by physical attack or restraint, or even by placing the owner in reasonable fear of imminent attack. Purse-snatching is a common form of robbery.
Misappropriation of Funds
When prosecutors bring a charge of misappropriation, they must convince a judge or jury that the following happened or is true:
- Control but not ownership. The prosecutor must show that the owner of the property, whether it's a person, organization, or group, entrusted or gave the money to the defendant, or otherwise allowed the defendant control over it. In short, the defendant rightfully had possession, but not ownership.
- Intent. First, a person must knowingly misappropriate the money, and cannot commit the crime by making a mistake or error. A person who misappropriates funds doesn't have to intend to actually physically take the money. It can be enough for a prosecutor to show that the accused intended to take any action that results (or would likely result) in the misappropriation of funds. In some states, the accused must know the action is illegal; while in others, the accused only has to act intentionally and does not need to know that the conduct is criminal.
- Conversion. In order to commit misappropriation of funds, a person must not only take the money but must use it for his own purposes. However, this doesn't require that the accused actually take the money and use it to buy something or otherwise spend it. Courts have held it's enough to transfer the money to a bank account or even to refuse or fail to hand over the owner's money when the owner demands it.
- Return. A person who misappropriates funds with the intent to later return the money to the rightful owner is still guilty of misappropriation. It also doesn't matter if the misappropriation only lasted for a short amount of time.
Depending on how the crime is charged, the state in which you live, and the circumstances of the case, a misappropriation of funds conviction can lead to significant penalties. States allow for both felony and misdemeanor charges for theft, embezzlement, and misappropriation crimes. What separates a misdemeanor offense from a felony offense often depends on the value of the funds that were misappropriated, though state statutes may also specify certain types of misappropriations as felonies or misdemeanors. For example, public employees who take public funds are often punished more harshly than private citizens.
- Prison. Misdemeanor misappropriation of funds convictions bring with them the possibility of up to one year in jail, while felony convictions come with sentences of at least a year or more in prison. Depending on the state, felony convictions can bring sentences of up to 10 years or more.
- Fines. Fines with misappropriation convictions can be significant. Misdemeanor convictions typically have fines of $1,000 or less, while felony convictions can exceed $10,000.
- Probation. Probation sentences are also possible with misappropriation convictions, though the possibility of probation depends on the circumstances surrounding the conviction and state laws. A person on probation has to comply with specific conditions, such as regularly meeting with a probation officer, asking the court permission to move out of state, and others. A person on probation who fails to meet the conditions can be sentenced to a jail or prison sentence. Probation sentences typically last at least a year, but can last 5 years or more.
- Restitution. A person convicted of any type of theft, including misappropriation of funds, must typically pay restitution to the victim. Restitution is designed to pay the victim back for the money stolen, and is separate from any fines involved.
Misappropriation of funds charges bring with them significant potential punishments, and anyone charged with this crime needs to speak to an experienced criminal defense attorney. Only an attorney who is familiar with the laws of your state, the local courts, and the facts of your case is can provide you with legal advice. It's always in your best interests to speak to an attorney about your case as soon as you are charged or even investigated for the offense.