Embezzlement is a white-collar crime that involves the theft of money or assets by someone who has been entrusted with them. It is a serious felony that can result in substantial prison time if convicted. The amount of prison time for embezzlement depends on several factors which this article will explore in depth.
What is Embezzlement?
Embezzlement occurs when a person improperly takes money or property that has been entrusted to their care but which actually belongs to someone else. Typically, embezzlement happens in the workplace when an employee abuses their position to steal from their employer.
Some examples of embezzlement include:
- An accountant falsifying records and pocketing company funds
- A cashier keeping money from daily cash register receipts
- An employee making unauthorized personal purchases with a company credit card
- A financial advisor misappropriating funds from a client’s investment account
Embezzlement differs from larceny/theft because the embezzler initially acquires the property lawfully by virtue of their position and employment relationship. However, they then proceed to wrongfully deprive the owner of their money or assets by converting them for personal use.
What Are the Penalties for Embezzlement?
The penalties for embezzlement can be severe, with sentences involving fines, restitution, probation, and years in prison depending on the circumstances of the case. Key factors that influence sentencing include:
Amount Embezzled
The amount of money or value of assets stolen has a significant impact on potential prison time. Larger sums can warrant longer sentences based on sentencing guidelines. For example, embezzling $5,000 or less may result in 0-1 year in jail, while amounts over $1 million may warrant 8+ years in prison.
Position of Trust
If the embezzler occupied a high position of trust, like a bank executive or accountant, this can be viewed as an aggravating factor that increases prison time. Violating the responsibility of a fiduciary role merits harsher punishment.
Length of Embezzlement
If the stealing occurred over an extended period of time, rather than a one-off incident, sentences tend to be longer. Ongoing deception generally garners more prison time.
Past Criminal History
Prior convictions, especially for crimes involving dishonesty, will be taken into account and likely increase the prison sentence for embezzlement. A record of violating trust can influence the length of incarceration.
Federal vs. State
Federal embezzlement charges generally result in longer sentences than state charges. At the federal level, sentences are determined by Federal Sentencing Guidelines while state sentences are guided by state statutes.
Average Prison Sentence for Embezzlement
Most embezzlement cases result in prison or jail time, probation, and court-ordered restitution. According to the United States Sentencing Commission, here are the average prison sentences for embezzlement based on the amount stolen:
- Less than $5,000 – 8 months
- $5,000 to $40,000 – 1 year 3 months
- $40,000 to $100,000 – 2 years 2 months
- $100,000 to $200,000 – 3 years 1 month
- $200,000 to $1 million – 4 years 5 months
- Over $1 million – 5 years 9 months
However, these are just broad national averages. The specific sentence can still vary significantly based on the individual details of each case and factors like criminal history. Many states also have their own sentencing guidelines that overlap with the federal recommendations.
Sentencing Guidelines by State
While the Federal Sentencing Guidelines provide recommended sentencing ranges, individual states have their own statutes that cover embezzlement penalties and imprisonment. Here are some examples of state-specific laws on jail time for embezzlement:
California
California Penal Code 503 covers embezzlement sentences in the state. Prison terms can be 16 months, 2 years, or 3 years depending on the amount stolen and if there are aggravating factors like prior offenses. Fines up to $1,000,000 can also be imposed.
Florida
Under Florida statute 812.014, embezzlement of less than $300 is a misdemeanor with up to 1 year in jail. Embezzlement between $300 to $20,000 is a felony with up to 5 years in prison. Over $20,000 can warrant up to 30 years in prison.
New York
New York classifies embezzlement into varying degrees based on the amount stolen. 4th degree is less than $1,000 (up to 1 year in jail), 3rd degree is $3,000 to $50,000 (1 to 3 years), 2nd degree is $50,000 to $1 million (5 to 15 years), and 1st degree is over $1 million (8 to 25 years).
Texas
Texas Penal Code Section 32.45 states embezzlement over $30,000 can result in 2 to 10 years in prison. If there are additional aggravating factors, the sentence can go as high as 99 years in some cases.
| State | Prison Time Range |
|---|---|
| California | 16 months to 3 years |
| Florida | 1 to 30 years |
| New York | 1 to 25 years |
| Texas | 2 to 99 years |
As shown, sentencing can vary significantly based on the specific state and value stolen. It’s important for a defendant to understand their jurisdiction’s laws.
How Much of a Sentence is Served?
While judges hand down a prison sentence, the actual time served can differ substantially. Parole eligibility and good behavior can reduce time spent incarcerated.
For example, with the federal system and the “85 percent rule”, federal inmates with no prior offenses must serve at least 85 percent of their sentence before being considered for early release. That means on a 5 year sentence for embezzlement, at least 4 years and 3 months must be served behind bars before parole possibility, with 3 months of potential early release.
States often have their own parole eligibility formulas. In California, inmates typically serve about half their sentence before parole consideration if they maintain good behavior. While sentences can seem intimidating, the real time served may end up being less.
What About Probation?
In some embezzlement cases, a judge may rule that probation is appropriate rather than hard prison time. Factors like showing remorse, paying back all funds, pleading guilty, first offense status, and personal circumstances might sway a judge to be more lenient in sentencing and assign probation.
However, probation terms are still serious – any violation means potential incarceration. Probation often involves conditions like:
- Mandatory supervision by a probation officer
- No committing additional crimes
- Maintaining steady employment
- Substance abuse treatment or counseling
- Community service hours
- House arrest
Probation also requires full restitution in addition to fines, fees, and court costs. Typical probation periods range from 1 to 5 years. Judges have latitude in probation terms and will consider variables like recidivism risk and victim impact when fashioning an appropriate sentence.
How Does Restitution Factor In?
As part of sentencing for embezzlement, judges almost always order full restitution be paid back to the victims. This means the embezzler must repay all funds that were stolen as part of their punishment.
Even if a defendant receives jail time and probation, they still have to compensate for all losses from their criminal actions. Wages can be garnished and assets seized if necessary to recover the money. Restitution aims to make the victim financially whole again.
The judge will determine the total restitution amount based on the evidence and losses claimed by the victim. This payment obligation remains even after release from jail. Failing to pay restitution could mean a probation violation and additional incarceration time.
Restitution is a key component of achieving justice for the victim in addition to punitive measures like imprisonment that punish the defendant. It seeks to undo the financial damage caused.
Are There Enhancements for Abuse of Trust?
One sentencing factor that can substantially increase prison time is if there is abuse of trust involved with the embezzlement. Under the Federal Sentencing Guidelines, abusing a position of trust to facilitate the commission or concealment of a crime permits an enhancement to the base offense level.
This applies when factors like the following are present:
- The position allows the defendant to commit a difficult-to-detect wrong due to their authority level or autonomy. For example, an accountant who falsifies records due to inadequate oversight.
- The victim placed additional trust in the defendant beyond ordinary circumstances. For instance, a financial advisor who has complete discretion over a client’s savings.
- The position involves vulnerability of the victim. Such as a lawyer stealing from a legal aid client.
In such situations where trust was violated, the increase in offense level and prison range can be significant. Abuse of trust merits tougher sanctions due to the additional betrayal involved.
Does Paying Restitution Reduce Jail Time?
There is no direct correlation between restitution and reduced time served. Paying back embezzled funds does not automatically equal less prison time, since restitution is mandatory regardless as part of just punishment and victim compensation.
However, full restitution before sentencing could potentially be a mitigating factor that persuades a judge towards more leniency. Remorse and acceptance of responsibility are viewed positively. Combined with other factors like first offense and cooperation, full early restitution may indirectly influence a judge to be more generous in sentencing. But it is not guaranteed to reduce incarceration time.
Ultimately, serving adequate prison time for punishment and deterrence remains the priority in embezzlement cases, separate from restitution which focuses on victim compensation. But restitution shows good faith which never hurts in being assessed more favorably at sentencing.
Does an Employer Have any Liability in an Embezzlement Case?
In most cases, the employer is simply the victim of workplace embezzlement by a dishonest employee. However, there are situations where an employer may share partial civil liability depending on the specific circumstances:
- Negligent supervision: If there was severely inadequate oversight over the employee who committed the embezzlement, especially after being notified of potential fraud, the company may have liability for enabling it due to negligence.
- Vicarious liability: For fraud by senior leadership, the company may be vicariously liable for the wrongful acts of executives under respondeat superior legal principles.
- Failure of reporting duties: Employers have duties under regulations like Sarbanes-Oxley to implement fraud reporting and whistleblower procedures. Failure to enact these measures that prevent discovery of fraud could create liability.
- Consumer reimbursement laws: Statutes like the Fair Credit Billing Act can require employers to reimburse defrauded consumers in certain cases of employee embezzlement, especially for credit card fraud.
However, employer liability mainly applies to civil lawsuits. Criminally, the individual employee perpetrator generally remains solely responsible for charges and penalties. But civil liability may require employers to compensate victims in select circumstances where inadequate supervision or policies enabled the embezzlement. Consulting legal counsel is advisable for employers to assess potential liability in employee fraud cases.
What are Some Well-Known Embezzlement Cases?
Some of the most severe embezzlement schemes that resulted in significant prison time include:
- John Rigas – CEO of Adelphia Communications. Rigas was sentenced to 12 years in prison in 2005 for bank, wire, and securities fraud tied to embezzling over $100 million.
- Allen Stanford – Billionaire Texas financier. Stanford received a 110 year prison sentence for defrauding over 20,000 investors of $7 billion through a Ponzi scheme involving embezzlement and falsified CD returns.
- Rita Crundwell – Finance comptroller in Dixon, Illinois. Crundwell embezzled over $50 million in public funds to support a lavish personal horse breeding operation. She was sentenced to 19 years in prison in 2013, at the time the largest municipal embezzlement scheme ever prosecuted.
- Brian and Kristi Mork – Owners of Hawaii start-up software company. The co-founders were convicted of embezzling over $15 million of investor funds for vacations and personal luxuries. Both received over 10 year prison sentences.
- Kevin Lee Co – City Manager of Bell, California. Co was convicted of misappropriating over $5 million in public funds from the city treasury, including an exorbitant secret salary he set for himself. He received 12 years in state prison.
These multi-million dollar cases represent some of the most egregious abuses of financial trust that resulted in decade-plus incarceration sentences for the perpetrators. They illustrate the most severe end of the consequences that can result from embezzlement.
Conclusion
Embezzlement is a serious crime that carries potentially significant prison sentences, particularly when large dollar amounts are involved. While penalties vary based on state and federal statutes, individuals convicted of misappropriating money and assets from employers or clients in positions of financial trust face fines, restitution orders, lengthy probation, and years behind bars in many cases.
Factors like the amount stolen, abuse of position, prior offenses, and lack of remorse generally contribute to harsher sentences within statutory guidelines. While paying back stolen funds demonstrates good faith, it does not automatically reduce incarceration time which is focused more on punishment. Employers also may have limited civil liability in certain situations that enabled employee embezzlement.
Ultimately, the financial and freedom consequences of an embezzlement conviction should deter individuals from abusing positions of trust. When punishment warrants over a decade in prison in extreme cases, the crime rarely pays off in the end once all factors are weighed.
Frequently Asked Questions
What is the minimum prison sentence for embezzlement?
There is no universal minimum prison sentence for embezzlement. It varies based on the specific state or federal statute and factors like the amount stolen. In some cases, first-time offenders may get probation if the amount is small. But most embezzlement convictions result in at least some jail time.
What enhances a sentence for embezzlement?
Key factors that increase prison time for embezzlers are higher stolen amounts, abuse of trust like a financial advisor violating client funds, embezzling over longer durations, holding positions of authority like a CEO, and prior criminal history showing pattern of dishonesty.
Does paying money back before sentencing reduce the punishment?
Paying full restitution before sentencing could potentially influence the judge to impose less prison time, but there is no guarantee. While it shows remorse, restitution is mandatory regardless so it does not directly correlate with reduced incarceration which focuses more on punitive justice.
Who has received the longest prison sentence for embezzlement?
Some of the longest embezzlement sentences include Bernie Madoff (150 years), Allen Stanford (110 years), Norman Schmidt (330 years), and Rita Crundwell (19 years). All involved financial fraud schemes stealing over $50 million or billions from numerous victims over extended multi-year periods.
Yes, cooperating fully with the investigation, admitting wrongdoing, returning stolen funds, pleading guilty, and expressing genuine remorse and accountability for actions can potentially help reduce prison time in an embezzlement case. Taking responsibility may persuade a judge to be more lenient.
Do states have different laws regarding sentencing?
Yes, while Federal Sentencing Guidelines provide recommendations, each state has its own statutes that set prison term ranges based on amounts stolen and other factors. This can lead to variation between states in how embezzlement sentencing is handled for comparable crimes and amounts embezzled.
Can employers be criminally charged if their employee embezzles?
Generally no – the individual employee who commits the embezzlement bears sole criminal liability and penalties. The employer is considered the victim. However, in civil court, employers may face liability under negligence theories if their lack of supervision enabled the embezzlement.
What type of lawyer handles embezzlement cases?
Embezzlement cases are a complex intersection of criminal law and business disputes. Experienced defense attorneys, prosecutors, and litigators who specialize in white-collar crime, fraud, theft, and financial cases are best equipped to handle the nuances of embezzlement trials, sentencing, and restitution.
Can you expunge or erase a criminal record for embezzlement?
It depends on the state and type of conviction, but for felony embezzlement convictions, expungement of the criminal record is typically not an option. Embezzlement is considered a crime of “moral turpitude” that reflects dishonesty and cannot be fully expunged in most instances. The conviction remains on record permanently.