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Monday, April 29, 2013

Embezzlement Can Get You In Criminal Trouble With The State Or The Feds

 An employee at a Charlotte-area Macy's was recently arrested and charged with embezzling money from her employer. A series of questionable transactions by a department store cashier triggered an investigation by her employer and eventually the Charlotte-Mecklenburg police. According to police, the employee embezzled more than $2,000 from the SouthPark Macy's store.

The cashier had processed refunds for merchandise that had never actually been purchased. According to reports, the employee theft was then completed by putting the refunds onto store gift cards.

According to the Association of Certified Fraud Examiners, businesses average a loss of about seven percent of annual revenue to employee theft. It is no small loss, especially to small businesses. But employees who are wrongly accused of theft or who made an innocent mistake that is interpreted as fraud have even more on the line than the businesses themselves.

Employee theft is a common form of embezzlement and is considered a white collar crime. This type of financial fraud can lead to serious prison sentences, fines and restitution requirements, whether charged as a North Carolina state crime or a federal white collar crime.

Embezzlement Charges In North Carolina

Embezzlement is a crime of misappropriation. It is taking money or property that belongs to someone else with the intention of depriving that person or business of the use of those funds or property. It is different from larceny because it does not require that money or property be obtained illegally to be a criminal act.

For instance, a bank teller is entrusted with the funds at his or her window; the teller is legally entrusted with the cash he or she receives from customers or that is stocked from the bank's vault on a daily basis. However, if the bank teller takes money from the till for personal use, depriving the bank or its members of the use of that money, he or she has committed the crime of embezzlement.

A North Carolina embezzlement charge depends on the value of the funds or property that was embezzled and the relationship of the person who took property or funds for his own use to the true owner.

- Employees, officers or agents of a corporation, clerks, etc. If the value of what was embezzled is $100,000 or more, it is a Class C felony. If under $100,000, it is a Class H felony.

- Treasurers of charitable organizations. If the value of what was embezzled is $100,000 or more, it is a Class C felony. If under $100,000, it is a Class H felony.

- Railroad officers. If the value of what was embezzled is $100,000 or more, it is a Class C felony. If under $100, 000, it is a Class F felony.

- Public employees, including city and state government workers, and public officials. If the value of what was embezzled is $100,000 or more, it is a Class C felony. If under $100, 000, it is a Class F felony.

The felony sentencing structure in North Carolina provides the following punishment ranges for embezzlement for those who have no prior criminal history:

Felony Class Presumptive Sentencing Range

C 58-73 months in prison

F 13-16 months in prison

H 5-6 months in prison or community punishment

In addition, a person convicted of embezzlement will typically be required to pay back the value of the funds or property embezzled. This is referred to as restitution.

Federal Embezzlement Charges

In North Carolina, embezzlement may be charged as either a state white collar crime or a federal white collar crime, depending on the circumstances involved. It can be a simple, low-dollar crime or it can involve a multimillion-dollar scheme.

Federal embezzlement charges may involve direct embezzlement of government funds or property by a government employee or indirect embezzlement of government funds.

As with North Carolina state charges, federal embezzlement charges are dependent upon the person involved in the scheme and the value of the funds or property embezzled. If more than $1,000 is embezzled, the crime is a federal felony punishable by a $250,000 fine and up to 10 years in prison. If $1,000 or less is embezzled, the crime is a federal misdemeanor punishable by a $100,000 fine and up to a year in prison.

A conviction for embezzlement of public funds will typically also be accompanied by an order to pay an amount equal to what was embezzled as restitution.

Interesting Facts About Embezzlement

Embezzling funds from a financial institution such as a bank is both a state and federal crime. If the person involved is an officer or teller at a federally insured bank, he or she may be on the hook for more stringent federal penalties if convicted of embezzlement.

Despite being illegal, money or property gained through embezzlement is taxable. The Internal Revenue Service wants its share of the proceeds of a successful state or federal embezzlement scheme. Failing to pay taxes can get you in trouble with the IRS; however, paying taxes on illegally gotten gains can alert federal authorities to financial fraud. The silver lining? You may be eligible for a tax refund on money paid in if you are ever forced to give back the money or property through restitution.


  1. Thank you for pointing this out. Embezzlement is indeed a white collar offense and if you're accused of committing such, there are not much options for you as a defendant. It will really help to have a good defense lawyer who will do the research and see if the defendant can have any of the available pleas or defenses.

    Doris Carver @

  2. Employees are supposed to be a good partners of companies in achieving success. But instead, some of them become the reason of the business’ downfall. Fortunately, there are good ways to prevent it from happening. The business owner just have to choose from those solutions, and implement it effectively for their company. Anyway, thank you for sharing this article. This is an eye-opener not only for the employees, but to business owners as well.

    Betty Rose @ Phenix Investigations