§32.09 EMBEZZLEMENT

• Jurisdiction: United States

§32.09. Embezzlement

[A] Historical Background

Embezzlement is not a common law offense. The offense is the result of eighteenth-century legislative efforts to compensate for gaps in the law of larceny. As described earlier, common law jurists were willing to punish new forms of dishonest conduct by manipulating the meaning of the term "trespassory taking" to expand the scope of larceny law. But there were limits to their willingness to stretch the law. In particular, they were not prepared to treat dishonest employees, who appropriated property lawfully entrusted to them by third persons for delivery to employers, as capital felons.

In 1799, shortly after the acquittal of a dishonest bank employee in the Bazeley case,⁹³ Parliament enacted the first general embezzlement statute.⁹⁴ The statute provided in pertinent part:

[I]f any servant or clerk, or any person employed . . . by virtue of such employment receive or take into his possession any money, goods, bond, bill, note, banker's draft, or other valuable security, or effects, for or in the name or on the account of his master or masters, or employer or employers, and shall fraudulently embezzle, secrete, or make away with the same, or any part thereof . . . [he] shall be deemed to have feloniously stolen the same.⁹⁵

Subsequent embezzlement statutes were enacted to deal with other persons not encompassed by this law.

Under English law, embezzlement was a misdemeanor. In the United States today, embezzlement is a felony or misdemeanor, depending on the value of the property embezzled.

[B] Elements of the Offense

Because of the statutory nature of the offense, and the piecemeal manner in which embezzlement laws were enacted, no single definition of the crime exists. At a minimum, however, embezzlement involves two basic ingredients: (1) D came into possession of the personal property of another in a lawful manner; and (2) D thereafter fraudulently converted the property (i.e., D performed some act that demonstrated his intent to deprive another of the property permanently). Most embezzlement statutes include a third element: (3) D came into lawful possession of the property as the result of entrustment by or for the owner of the property.

[C] Distinguishing Larceny from Embezzlement

The most significant distinction between larceny and embezzlement is that "[i]n embezzlement, the property comes lawfully into possession of the taker and is fraudulently or unlawfully appropriated by him; in larceny, there...