Arizona Embezzlement Penalties | Phoenix Federal Defense Attorney
Facing embezzlement charges can be overwhelming. Embezzlement, a white-collar crime, involves the misappropriation of funds or property entrusted to an individual, often resulting in felony charges.
Federal defense attorney Josh Kolsrud at Kolsrud Law Offices specializes in criminal defense and offers expert guidance tailored to your case. With his extensive experience in defending clients against federal charges, Josh Kolsrud is dedicated to protecting your rights and achieving the best possible outcome.
According to the Association of Certified Fraud Examiners (ACFE), organizations lose approximately 5% of their annual revenue to fraud, including embezzlement, each year (ACFE) (The Fraud Resource Center, Inc.).
What is Embezzlement?
Embezzlement involves the unlawful taking or misappropriation of funds or property by someone entrusted with its care, such as an employee, contractor, or fiduciary.
Unlike general theft, embezzlement specifically pertains to a breach of trust. For instance, an employee who diverts company funds for personal use or a financial advisor who siphons client money would be committing embezzlement.
According to Arizona Revised Statutes (A.R.S.) § 13-1802, embezzlement falls under the broader category of theft. However, its distinguishing factor is the relationship of trust and responsibility between the embezzler and the victim.
What Does Position of Trust Mean?
A position of trust refers to a role where an individual is entrusted with responsibilities that involve the management, oversight, or safeguarding of someone else's property or assets.
In the context of embezzlement, a position of trust amplifies the severity of the crime because it involves betraying the confidence placed in the individual by an employer, client, or institution.
Examples of such positions include employees, financial advisors, executives, and public officials. These roles often have access to funds or assets and are expected to manage them honestly and ethically.
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Common Examples of Embezzlement
Embezzlement can manifest in various forms across different contexts, often involving a trusted individual taking advantage of their position to unlawfully appropriate assets.
Here are some common examples:
Employee Theft
One of the most prevalent forms of embezzlement is employee theft, where an employee misuses their access to company resources for personal gain. This can include:
- Stealing cash or inventory from the workplace
- Manipulating financial records to conceal theft
- Diverting customer payments into personal accounts
Misappropriation of Funds
This occurs when an individual entrusted with managing funds, such as a financial advisor or a treasurer, diverts those funds for unauthorized purposes. Examples include:
- Using client funds for personal investments
- Transferring company money to personal bank accounts
- Falsifying expense reports to siphon money
Skimming Off the Top
Skimming involves taking small amounts of money from receipts or transactions before they are recorded in the company's books. This method is often difficult to detect due to the subtlety of the amounts involved. Examples include:
- Withholding a portion of cash sales before they are logged
- Pocketing money from petty cash funds
- Underreporting revenue and keeping the difference
Fraudulent Billing
In fraudulent billing schemes, an individual generates fake invoices for goods or services that were never provided, then pockets the payments. This can be carried out by:
- Creating fictitious vendors and submitting invoices for payment
- Overbilling for actual services or goods
- Billing for hours not worked or services not rendered
Payroll Fraud
Payroll fraud involves manipulating the payroll system to benefit oneself or others. Common examples include:
- Adding ghost employees to the payroll and collecting their wages
- Inflating hours worked to receive higher pay
- Unauthorized bonuses or salary increases
Misdemeanor Embezzlement Vs. Felony Embezzlement
Misdemeanor embezzlement involves smaller amounts of money or property and is less severe, typically resulting in probation, fines, and short-term imprisonment (less than one year).
In contrast, felony embezzlement involves larger sums and carries severe penalties, including long-term imprisonment, substantial fines, restitution, and a permanent criminal record.
Factors influencing the classification include the amount embezzled, the individual's position of trust, and their prior criminal record, with higher trust positions and repeat offenses escalating charges to a felony.
What are Embezzlement Penalties
Embezzlement penalties in Arizona vary significantly based on the amount of money or value of the property involved. Under A.R.S. § 13-1802, the classification and corresponding penalties are clearly outlined to address the severity of the crime.
- Class 2 Felony: Involves property or funds valued at $25,000 or more. Penalties include 3 to 12.5 years in prison.
- Class 3 Felony: Involves property or funds valued between $4,000 and $25,000. Penalties include 2 to 8.75 years in prison.
- Class 4 Felony: Involves property or funds valued between $3,000 and $4,000. Penalties include 1 to 3.75 years in prison.
- Class 5 Felony: Involves property or funds valued between $2,000 and $3,000. Penalties include 6 months to 2.5 years in prison.
- Class 6 Felony: Involves property or funds valued between $1,000 and $2,000. Penalties include 4 months to 2 years in prison.
In addition to prison time, those convicted of embezzlement may face:
- Fines: Substantial financial penalties depending on the severity of the crime.
- Restitution: Repayment to victims for the amount embezzled.
- Criminal Record: A permanent criminal record, which can affect future employment opportunities and personal reputation.
| Class | Value of Property or Funds | Penalties |
|---|---|---|
| Class 2 Felony | $25,000 or more | 3 to 12.5 years in prison |
| Class 3 Felony | $4,000 to $25,000 | 2 to 8.75 years in prison |
| Class 4 Felony | $3,000 to $4,000 | 1 to 3.75 years in prison |
| Class 5 Felony | $2,000 to $3,000 | 6 months to 2.5 years in prison |
| Class 6 Felony | $1,000 to $2,000 | 4 months to 2 years in prison |
What Potential Defense Strategies Can Be Used
⑴ Lack of Intent
Embezzlement requires a deliberate intent to permanently deprive the owner of their property. For instance, if the defendant mistakenly took company funds believing they were authorized for personal use or if there was an accounting error that led to the misappropriation, the lack of criminal intent can be argued.
⑵ Insufficient Evidence
Challenging the evidence presented by the prosecution is another effective defense strategy. This involves scrutinizing the financial records, witness testimonies, and other documentation to find inconsistencies or gaps. For example, if there are discrepancies in the financial data or if key documents are missing or incomplete, these issues can undermine the prosecution's case. Additionally, questioning the credibility of witnesses who may have motives to falsely accuse the defendant can further weaken the evidence against them.
⑶ Duress or Coercion
If the defendant can prove that they were forced to commit the embezzlement under threat or coercion, this can serve as a valid defense. Demonstrating duress involves showing that the defendant faced immediate and severe harm if they did not comply with the demands to misappropriate the funds. For example, if an employee was threatened with violence unless they diverted company funds, this coercion would negate criminal intent.
⑷ Lack of Knowledge
Another defense is demonstrating that the defendant lacked knowledge of the embezzlement occurring. This could apply in situations where the defendant was unaware that funds were being misappropriated, such as an employee who unknowingly processed fraudulent transactions initiated by another person. Proving that the defendant did not know about the illegal activity can absolve them of liability.
⑸ Entrapment
Entrapment occurs when law enforcement induces a person to commit a crime they would not have otherwise committed. In embezzlement cases, this defense might be used if it can be shown that the defendant was persuaded or coerced into misappropriating funds by undercover agents or informants. The key to this defense is proving that the defendant had no predisposition to commit the crime before the government's intervention.
⑹ Consent
Consent as a defense involves proving that the defendant had permission to use the funds or property in question. This could occur in scenarios where the defendant believed they had authorization from a superior or the owner to use the funds in a specific manner. Documenting and presenting evidence of such consent can refute claims of embezzlement.
⑺ Mental Incapacity
If the defendant can demonstrate that they were not mentally capable of understanding their actions or distinguishing right from wrong at the time of the embezzlement, this can serve as a defense. Mental incapacity might involve conditions such as severe mental illness or cognitive impairment, which would prevent the defendant from forming the requisite intent to commit the crime.
Contact a Federal Defense Attorney
Facing embezzlement charges demands a defense attorney with unparalleled expertise and insight into the prosecution's strategies. Josh Kolsrud, founder of Kolsrud Law Offices, is exceptionally qualified to provide representation.
With over 3,500 cases and more than 100 jury trials under his belt, Josh’s prosecutorial experience is extensive.
Contact Josh Kolsrud at Kolsrud Law Offices at (602) 638-3790 for personalized legal assistance.
An award-winning criminal defense attorney Since 2006
Why Choose Josh Kolsrud
With over 100 trials to his name, and years of experience as a state and federal prosecutor, Josh understands the law, the legal process, and your rights. Josh is also committed to representing every client with utmost integrity and dedication
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