Embezzlement

In the Commonwealth of Massachusetts, Larceny by Embezzlement is a serious crime, punishable by time in prison, fines, and payment of restitution to victims. The more valuable the assets in an embezzlement charge, the more severe the penalties may be. Larceny by Embezzlement is defined under Massachusetts General Law Chapter 266, Section 30 as a statutory theft crime. It is in violation of this statute  to intentionally misappropriate entrusted assets. 

Although Massachusetts considers embezzlement as a crime of larceny, there is a major difference. In a larceny, the defendant was never authorized to be in possession of the property, which is carried away from the rightful owner. In an embezzlement, the defendant has been granted possession of the property, but then unlawfully converts it for their own use. For example, an accountant receives payments on behalf of a company, but then diverts the funds into their own account. 

In order to convict a charge of larceny by embezzlement, the prosecution must prove the following beyond a reasonable doubt:

1. The defendant was entrusted with personal property of another party, including assets such as cash, checks, stocks, deeds or contracts or anything else of value. 
2. When entrusted with the property, the defendant took it for themselves, hid it from the owner, or converted it for their own use without the permission of the owner
3. The defendant’s intent was to deprive the rightful owner of their property permanently.

As conspiracy to commit Larceny by Embezzlement is also in violation of the statute, the theft does not need to be complete in order for charges to be made.

Examples of Embezzlement Crimes

• Payments to vendors are forged and the employee keeps the money. 
• Vendors are overcharged, double-billed, or charged a small monthly fee which is skimmed by the employee. 
• Company credit cards are used for personal expenses, and an employee in accounting changes the books. 
• An employee forges checks or orders electronic transfers to make payments to herself, and then alters the accounts to obscure the crime. 
• A business expense is charged on a company credit card, and the employee also submits a receipt for a cash reimbursement. This is commonly referred to as “double dipping.”
• An employee falsifies her expense account and collects payments for illegitimate expenses. 
• A company has a fundraiser and the employee with control of the donations keeps some of the money. 
• An imaginary employee is set up in the payroll systems, and the accountant keeps the pay and obscures the transactions in the accounting records. 
• A payroll employee falsifies entries for overtime, and then pays the funds to herself. 
• The business’s identity is used to secure a loan, which an employee uses for their own means. Then, company funds are used to make the loan payments. 
• An employee collects kickbacks from a vendor, either in the form of cash or free products. 
• Customer credit card data is stolen and an employee purchases items for himself.
• Cash is skimmed off of incoming payments by either voiding transactions at the cash register or before entering cash deposits. 

Financial Larceny by Embezzlement Charges 

Punishments for a larceny by embezzlement conviction are dependent on the value of the property misappropriated by the defendant. If an individual is charged with intentionally stealing, embezzling, converting or hiding property belonging to another party, and they have been entrusted with the property valued at less than $250, if convicted they are subject to up to one year in state prison, or a maximum fine of $300. The embezzled property must not be a firearm. 

If an individual is charged with intentionally stealing, embezzling, converting or hiding property belonging to another party, and they have been entrusted with the property valued at more than $250 or is a firearm, if convicted they are subject to up to five years in state prison, or a maximum fine of $25,000 and up to 2 ½ years in state prison. 

Massachusetts law has special protections in place for senior citizens and people with disabilities who are victims of larceny by embezzlement. If convicted of larceny by embezzlement of under $250 against a person over the age of 60 or a person with a disability, the penalty may include:

• Up to 2 ½ years in a house of correction, and/or
• Up to a $1000 fine

If the embezzled property is valued over $250, the penalty may include:

• Restitution paid to the victim of the value of the embezzled property
• Up to 10 years in state prison, or
• Up to 2 ½ years in a house of correction, and/or
• Up to a $50,000 fine

Trade Secrets Embezzlement Charges 

Larceny by embezzlement does not only apply to money or other financial assets. It is also a violation of the law to misappropriate trade secrets, which can mean stealing, converting, keeping secret, concealing or copying. Trade secrets cover a wide range of valuable information, including scientific discoveries, processes, designs, formulas, inventions and even productions and management techniques. The embezzled property doesn’t need to be something physical, and doesn’t need to have a concrete monetary value for the statute to be violated. 

Examples of embezzlement of trade secrets include: 

• A former employee of a paint manufacturer is hired by a competitor. She shares the proprietary formula for a fade-resistant paint from her old employer with the new one, who starts to sell the product under his brand. 
• A building contractor signs a confidentiality agreement but sells the building’s design plans to a competitor. 
• An IT employee starts to sell their own software product based on code developed by their employer. 

A larceny by embezzlement of trade secrets conviction can lead to a penalty of up to 2 ½ years in a state prison, or up to 2 years in jail and a fine of up to $25,000. 

If facing Larceny by Embezzlement charges, you are at risk of prison time and heavy fines. An experienced legal team can expertly argue your defense and fight for your rights. Protect your future and freedom by contacting us today for a free consultation.