Embezzlement

AAA

DEFINITION of 'Embezzlement'

A form of white-collar crime where a person misappropriates the assets entrusted to him or her. In this type of fraud the assets are attained lawfully and the embezzler has the right to possess them, but the assets are then used for unintended purposes. Embezzlement is a breach of the fiduciary responsibilities placed upon a person.

INVESTOPEDIA EXPLAINS 'Embezzlement'

The nature of embezzlement can be both small and large. Embezzling funds can be as minor as a store clerk pocketing a few bucks from a cash register; however, on a grander scale, embezzlement also occurs when the executives of large companies falsely expense millions of dollars, transferring the funds into personal accounts. Depending on the scale of the crime, embezzlement may be punishable by large fines and time in jail.

RELATED TERMS
  1. White-Collar Crime

    A non-violent crime that is committed by someone, typically for ...
  2. Honesty Bond

    A bond posted by an organization or professional insuring the ...
  3. Fiduciary

    1. A person legally appointed and authorized to hold assets in ...
  4. Agency Problem

    A conflict of interest inherent in any relationship where one ...
  5. Agency Costs

    A type of internal cost that arises from, or must be paid to, ...
  6. Corporate Governance

    The system of rules, practices and processes by which a company ...
RELATED FAQS
  1. Why does fighting money laundering reduce overall crime?

    Money laundering is the process of converting funds received from illegal activities into ostensibly clean money that does ... Read Full Answer >>
  2. What's the difference between legal defalcation and illegal defalcation?

    Defalcation describes the failure of any one party to hand over or present funds that were entrusted to its care, but not ... Read Full Answer >>
  3. Who are the most famous people convicted of insider trading?

    In finance, insider trading refers to the buying and selling of security by a person who has access to material non-public ... Read Full Answer >>
  4. What's the difference between insider trading and insider information?

    Insider information is the knowledge of nonpublic material about a publicly traded company that may affect the stock's price. ... Read Full Answer >>
  5. Who sets the global standard to stop money laundering and how is it implemented?

    The Financial Action Task Force (FATF) sets the international standard for fighting money laundering. Formed in 1989 by leaders ... Read Full Answer >>
  6. What is accounting fraud?

    Accounting fraud is intentional manipulation of financial statements to create a facade of a company's financial health. ... Read Full Answer >>
Related Articles
  1. Personal Finance

    4 History-Making Wall Street Crooks

    Find out how these Wall Street high-rollers landed themselves in hot water.
  2. Entrepreneurship

    Identifying And Managing Business Risks

    There are a lot of risks associated with running a business, but there are an equal number of ways to prepare for and manage them.
  3. Taxes

    Cut Taxes By Reporting Property Damage

    Know the options you have for your insured property if and when a disaster strikes.
  4. Economics

    Defining Illegal Insider Trading

    The better you understand why insider trading can be criminal, the better you'll understand how the market works.
  5. Options & Futures

    Governance Pays

    Learn about how the way a company keeps its management in check can affect the bottom line.
  6. Retirement

    Common Clues Of Financial Statement Manipulation

    Search for the "bloody" fingerprints in accounting crimes.
  7. Mutual Funds & ETFs

    Morningstar's Stewardship Grade Scores Big

    Morningstar's service gives investors an idea how well fund companies are safeguarding their interests.
  8. Markets

    A Guide To Conference Board Indicators

    Learn to put the CB data sets to trading use. Each chapter takes you through one of the board's benchmark indicators or surveys, their significance and their applications.
  9. Economics

    Understanding Money Laundering

    The process of creating the appearance that large amounts of money obtained from serious crimes actually originated from a legitimate source.
  10. Investing

    What's an Agency Problem?

    An agency problem occurs when a conflict of interest arises for an agent -- a person acting on behalf of another person. The conflict of interest arises when the agent’s own interests are different ...

You May Also Like

Hot Definitions
  1. Net Worth

    The amount by which assets exceed liabilities. Net worth is a concept applicable to individuals and businesses as a key measure ...
  2. Stop-Loss Order

    An order placed with a broker to sell a security when it reaches a certain price. A stop-loss order is designed to limit ...
  3. Covered Call

    An options strategy whereby an investor holds a long position in an asset and writes (sells) call options on that same asset ...
  4. Butterfly Spread

    A neutral option strategy combining bull and bear spreads. Butterfly spreads use four option contracts with the same expiration ...
  5. Unlevered Beta

    A type of metric that compares the risk of an unlevered company to the risk of the market. The unlevered beta is the beta ...
  6. Moving Average - MA

    A widely used indicator in technical analysis that helps smooth out price action by filtering out the “noise” from random ...
Trading Center