AskDefine | Define embezzler

Dictionary Definition

embezzler n : someone who violates a trust by taking (money) for their own use [syn: defalcator, peculator]

User Contributed Dictionary



(US) IPA: /əmˈbɛzlər/


  1. one who steals money they have been trusted with, especially from one's employer; one who embezzles
    • 1667, Samuel Pepys, Diary
      It appears that Hogg is the eeriest rogue, the most observable embezzler, that ever was known.
    • 2003, Will and Grace (TV, episode 5.23)
      At the time, I was deeply involved with the handsome embezzler who led a major telecom company into bankruptcy.



one who steals money they have been trusted with
  • Latin: peculator
  • Spanish: malversador

Extensive Definition

Embezzlement is the act of dishonestly appropriating goods, usually money, by one to whom they have been entrusted. For instance, a clerk or cashier can embezzle money from his or her employer, or a civil servant can embezzle funds from the government. Embezzlement may range from the very minor, involving only small amounts, to the immense, involving large sums and sophisticated schemes.
Embezzlement differs from larceny in two ways. First, in embezzlement, an actual conversion must occur; second, the original taking must not be trespassory. To say that the taking was not trespassory is to say that originally the embezzler had the right to possess the property in question, and that he subsequently converted the property to his own use. Conversion requires that the theft seriously interfere with the property, rather than just relocate it. As in larceny, the measure is not the gain to the thief, but the loss to the true owner.
Historically, the crime of embezzlement was created by statute to deal with situations where theft could occur while the thief himself was innocent of larceny — typically because of the "lawful possession" element. That is, embezzlement fills in the blanks where larceny laws do not apply.

Methods of embezzlement

Embezzlement sometimes involves falsification of records in order to conceal the theft. Embezzlers commonly steal relatively small amounts repeatedly over a long period, although some embezzlers steal one large sum at once. Some very successful embezzlement schemes have continued for many years before being detected due to the skill of the embezzler in concealing the nature of the transactions.
One of the most common methods of embezzlement is to under-report income, and pocket the difference. For example, in 2005, several managers of the service provider Aramark were found to be under-reporting profits from a string of vending machine locations in the eastern United States. While the amount stolen from each machine was relatively small, the total amount taken from many machines over a length of time was very large.
Another method is to create a false vendor account, and to supply false bills to the company being embezzled so that the checks that are cut appear completely legitimate. Yet another method is to create phantom employees, who are then paid with payroll checks.
The latter two methods should be uncovered by routine audits, but often aren't if the audit is not sufficiently in-depth, because the paperwork appears to be in order. The first method is easier to detect if all transactions are by cheque or other instrument, but if many transactions are in cash, it is much more difficult to identify. Employers have developed a number of strategies to deal with this problem. In fact, cash registers were invented just for this reason.

Tax consequences

Proceeds of embezzlement must be included in gross income unless the embezzler repays the money in the same taxable year. Congress has ruled that lawful as well as unlawful gains are includable in gross income and that it is inconsequential that an embezzler may lack title to the sums he appropriates.” When the embezzler returns the victim’s funds either directly or indirectly (i.e. restitution) then the embezzler may have a reduction in taxable income.
However, if a corporate embezzler can show four things, then they need not include the embezzled funds in income:
“Where a taxpayer withdraws funds from a corporation 1) which he fully intends to repay and 2) which he expects with reasonable certainty he will be able to repay, 3) where he believes that his withdrawals will be approved by the corporation, and 4) where he makes a prompt assignment of assets sufficient to secure the amount owed, he does not realize income on the withdrawals under the James test.”


See also

embezzler in Danish: Underslæb
embezzler in German: Unterschlagung
embezzler in Spanish: Malversación de caudales públicos
embezzler in French: Détournement de fonds
embezzler in Icelandic: Auðgunarbrot
embezzler in Hebrew: מעילה
embezzler in Dutch: verduistering (misdrijf)
embezzler in Japanese: 横領罪
embezzler in Polish: Przywłaszczenie
embezzler in Finnish: Kavallus
embezzler in Swedish: Förskingring
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