Federal Embezzlement: Charges, Penalties, & Defense

American flag depicting federal embezzlement

Are you or is someone you love facing federal embezzlement charges?

Embezzlement is a unique kind of theft. Not only is it stealing, but it’s also stealing with the added twist of violating a special trust.

If someone is trusted to manage someone else’s money in some way or other and they take it or steal part of it for their personal gain, that’s embezzlement. They had legal access to the money, but not ownership of it.

Example of a Federal Embezzlement Case in Detroit

The U.S. Department of Justice published a federal embezzlement case from Detroit in August 2018.

A city of Detroit employee named Masharn Franklin was convicted of embezzlement in federal court. She was sentenced to 18 months in prison, three years supervised release, and was ordered to pay $265,573 in restitution to the city of Detroit.

In 2016 and 2017, Franklin was employed in Detroit’s audit and payroll department. During that time, part of her job was to oversee the execution of garnishment orders for the salaries of Detroit city employees.

The scheme Franklin was convicted of carrying out was to order money to be garnished from city funds in the names of her relatives.

Franklin embezzled hundreds of thousands of dollars in checks made out to the names of her relatives. Then, she deposited them into bank accounts owned by herself and her relatives.

Before she was caught, Franklin embezzled the amount named above from the city. The FBI was able to recover $58,000 from her bank accounts.

Federal Embezzlement Laws

Some crimes are covered by overlapping state and federal embezzlement laws, while others are covered by laws governing either one or the other government entity.

State embezzlement laws cover thefts by public officials employed by the state and its municipalities and thefts by non-public employees from other people or businesses.

If an employee steals from his company or someone takes property that was entrusted to her, that type of embezzlement is covered under state law.

Federal embezzlement laws, in contrast, only cover theft from the federal government. Examples of federal embezzlement could include something like a park ranger stealing property from a national park in Michigan, or it could look like an accountant taking federal money allocated to the city of Detroit.

Federal embezzlement also covers things like construction materials to be used for a building project paid for by the federal government.

Embezzlement by a bank employee could be considered both a state and a federal crime if the bank is a federal credit union bank or insured by the federal government.

Penalties for Federal Embezzlement

In general, federal embezzlement penalties are separated by the type of property stolen and its value.

  • Convictions whose fines equal $250,000 or more are felonies.
  • Those whose fines are up to $100,000 are misdemeanors.

Fines and penalties for organizations charged with embezzlement are much more significant.

The following list of some of the crimes considered federal embezzlement:

  • Theft of public money, property or records
  • Theft of tools of counterfeiting
  • Accounting generally for public money
  • Receiving unauthorized deposits
  • Embezzlement by court officers
  • Custodians misusing public funds
  • Depositaries failing to safeguard deposits
  • Embezzlement by a Disbursing officer
  • Embezzlement by a bank examiner
  • Solicitation or use of gifts
  • Embezzlement by employees of a bank, lending, credit, or insurance institution
  • Embezzlement of property mortgaged or pledged to farm credit agencies
  • Healthcare embezzlement
  • Embezzlement from an employee benefit plan
  • Embezzlement from programs receiving federal funds
  • Theft of livestock
  • Theft of major artwork

For many of these charges, the penalty is:

  • $250,000 in fines and or up to 10 years in prison if the value of what you stole is $1,000 or more.
  • $100,000 and up to a year in jail if the amount is less than $1,000.

Experienced Federal Embezzlement Defense Attorney

The penalties for federal embezzlement are potentially very harsh.

If you are facing charges related to federal embezzlement, contact my office today. Having an experienced criminal attorney on your side fighting for you is crucial.

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