Federal Embezzlement Laws

Embezzlement is a kind of property theft. It occurs when a defendant, who was entrusted to manage or monitor someone else's money or property, steals all or part of that money or property for the defendant's personal gain. The key is that the defendant had legal access to another's money or property, but not legal ownership of it. Taking the money or property for the defendant's own gain is stealing; when combined with the fact that this stealing was also a violation of a special position of trust, you have the unique crime of embezzlement.

Is Embezzlement a Federal Crime?

It can be. Federal embezzlement laws target theft from the federal government, such as the theft of property from a national park by a park ranger. Federal laws also cover theft of property that is owned by a private entity but, pursuant to a contract, the U.S. government has paid for it. For example, an employee of a construction firm hired by the government to work on a government building would be subject to federal charges of embezzlement if the employee stole building materials that the government had paid for as part of its bid.

Difference Between State and Federal Embezzlement Crimes

By contrast, state embezzlement laws cover not only thefts by public officials employed by the state and municipalities, but embezzlement by private individuals from other private people or entities. For instance, employees who steal from their companies, and people who embezzle property that others have entrusted to them, can be charged under state law.

Offenses That Can Be Charged Under State or Federal Law

In some areas, state and federal embezzlement laws overlap, as in embezzlement by a bank employee. This crime is often included within state embezzlement laws, but it's also a federal offense. When an incident can be charged by either the federal prosecutor or the state prosecutor, usually only one charge is brought. But it is possible for each prosecuting office involved to charge the case.

Federal Embezzlement Penalties and Charges

Most federal embezzlement laws are broken down by the type of money or property stolen, who stole it, and its value. Below are short descriptions of these crimes grouped into categories. Crimes involving up to a year's incarceration are misdemeanors, and everything else is a felony.

Embezzlement of Federal Money, Property, or Deposits

Any person who embezzles money, property, deposits, or anything else of value that belongs to:

• the U.S. government
• a federal agency, or
• an organization contracted by the U.S. government

can face federal prison time and steep fines. If the property is worth more than $1,000, the maximum penalty is 10 years in federal prison and a $250,000 fine. If the value is $1,000 or less, the law authorizes a penalty of up to one year's incarceration and a $100,000 fine.

It's also a crime for an employee of an organization to embezzle federal grants, subsidies, loans, or other forms of assistance received by that organization. Embezzlement of money or property owned by the organization that is worth $5,000 or more will be fined up to $250,000, imprisoned for up to 10 years, or both.

Embezzlement by Federal Officers, Employees, or Agents

This category addresses embezzlement of public money by federal officers, employees, or agents, including those working for the federal courts, the U.S. Treasury, or a federal depository. Penalties are similar to those above. For amounts of $1,000 or more, penalties include a $250,000 fine and up to 10 years in prison. For amounts less than $1,000, penalties include up to a $100,000 fine and one year's incarceration. In certain cases, a judge can order a fine that's equal to the amount embezzled.

A stiffer penalty applies when embezzlement involves an employee of any banking institution operating under the Federal Reserve Act, a Federal Reserve employee, or an employee of a federal lending, credit, or insurance institution. Penalties for embezzling more than $1,000 from one of these institutions include a fine of up to $1,000,000, up to 30 years in prison, or both.

Embezzlement From Benefit Plans

Embezzling funds from an employee benefit plan incurs a fine of up to $250,000, up to five years in prison, or both. If a person embezzles more than $100 from a health care benefit plan, the possible prison time is 10 years. Embezzling less than $100 from a health care benefit plan incurs a fine of between $5,000 and $100,000, up to one year in jail, or both.

Fines for Organizations That Commit Federal Embezzlement

The federal embezzlement crimes summarized above specify fines that can be imposed when a defendant is an individual person. But when the crime was committed by an organization (like a corporation), the consequences are harsher. Felony convictions result in a fine that is the greater of:

• the amount specified in the law setting forth the offense
• twice the amount gained or lost (described in the next section), or
• $500,000.

Misdemeanor convictions carry a fine of up to $200,000.

Federal Embezzlement Fines Based on Gain or Loss

Instead of the fines listed above (and regardless of whether the defendant is an individual or an organization), a judge may decide to impose a fine of up to twice the value of what the defendant gained (or that the victim lost—whichever is greater) as a result of the embezzlement.

Legal Representation for Federal Crimes

If you've been charged in federal court with embezzlement, consult an experienced criminal defense attorney. Be sure that the person you consult practices regularly in federal court—many criminal defense attorneys are familiar only with state court laws and procedures, and will be at a disadvantage in federal court if they are not regular practitioners there. A local and experienced federal criminal defense attorney can tell you how strong the case against you appears to be, and how cases like yours tend to be handled by prosecutors and judges in your federal district court.

(18 U.S.C. §§ 641 to 669, 3559, 3571 (2022).)