Embezzlement of Public Funds in New York
Cases involving the embezzlement of public funds in New York are extremely serious and frequently cited by federal judges as being worse and more damaging to society than even far-reaching narcotics conspiracies that carry potentially much higher prison sentences. Worse, questioning of targets by federal agents in advance of a prosecutor filing charges is routine in these cases, and when targets are uncounseled, frequently result in additional allegations involving the making of false statements to federal officers or obstruction of justice, either of which may add several years of imprisonment to any sentence. For these reasons – and the potential minefield of collateral consequences that accompany these charges, e.g., loss of employment, elected position, or a professional license – it is imperative that one retains an attorney as soon as he is made aware that he has become the target of an investigation into the embezzlement of public monies.
Common Types of Embezzlement Offenses
While embezzlement can involve the surreptitious theft of liquid cash or assets, physical larceny is far from the only way public funds can be embezzled in New York. For example, if someone is granted fiduciary responsibility for public funds as part of their job, any unauthorized deposit they receive could constitute embezzlement, as could failing to safeguard a deposit before it is secured within a depository.
Other common types of embezzlement offenses involve intentional accounting errors, the production or use of counterfeit materials, and/or theft by parties working as bank examiners or disbursing officers. No matter the particular nature of an embezzlement charge, assistance from legal counsel is usually essential to contesting it effectively in court.
How Does Federal Law Define Embezzlement?
As the Supreme Court recognized in 1895, embezzlement is the “appropriation of property by a person to whom such property has been entrusted, or into whose hands it has lawfully come.” Moore v. United States 160 U.S. 269, 269 (1895). “It differs from larceny in the fact that the original taking was lawful, or with the consent of the owner, while in larceny the felonious intent must have existed at the time of the taking.” Id.
While numerous statutes punish the embezzlement of public funds, the broadest and most frequently utilized by federal prosecutors is 18 U.S.C. § 641, which provides that: 1) whoever steals or embezzles without authority – either for his own use or that of another – any record, money, or thing of value of the United States or of any agency thereof, or any property made or being made under contract for the United States; or 2) receives, conceals, or retains the same with intent to convert it to his use or gain, knowing it to have been embezzled, stolen, purloined or converted – shall be imprisoned for a maximum of ten years imprisonment, unless the aggregate value of the property or currency at issue is less than $1,000, lowering the maximum sentence to one year imprisonment.
In addition to 18 U.S.C. § 641, a number of statutes prohibit specific acts involving stolen or embezzled government property or funds. For instance, 18 U.S.C. § 643 provides that any officer, employee or agent of the United States who receives money which he is not authorized to retain as salary and fails to account for it as provided by law is guilty of embezzlement; 18 U.S.C. § 644 prohibits persons who are not authorized depositories of public money from knowingly receiving any such money or using, transferring, converting, appropriating or applying such money for any purpose not prescribed by law; 18 U.S.C. § 648 forbids custodians of public funds from loaning, using, or converting those funds, or depositing or exchanging them, except as authorized by law; and 18 U.S.C. § 649 provides that any person who possesses or controls money belonging to the United States and fails to deposit it when required to do so is guilty of embezzlement. These crimes are also punishable by a fine and a maximum 10-year sentence of imprisonment, unless the aggregate value of the property or currency at issue amounts to less than $1,000, lowering the maximum sentence to one year imprisonment.
When Do Federal Courts Have Jurisdiction Over Embezzlement Cases?
On a basic level, anyone who embezzles public funds belonging to the U.S. government would be prosecuted under federal law even if their alleged actions occurred within the State of New York. However, federal authorities may also have jurisdiction over an embezzlement case if it involves property or assets taken from a subsidiary of the federal government, or it involves a contract between the embezzling party and the U.S. government.
Additionally, anyone who embezzles funds while employed by the Federal Reserve or a bank governed by the Federal Reverse Act may be subject to especially severe penalties, including up to 30 years in federal prison and up to $1 million in fines. These penalties may also apply to anyone who embezzles public funds while acting in certain roles with insurance or credit institutions.
How Does the State of New York Prosecute Embezzlement of Public Funds?
If the embezzlement of public funds in New York is prosecuted at the state level, it is considered a form of larceny and punished accordingly upon conviction. Embezzlement of less than $1,000 can be prosecuted as a misdemeanor offense, but any property stolen over $1,000 is considered felony grand larceny and must be punished by a mandatory minimum sentence of one year in state prison.
Increasing amounts of stolen funds or goods may result in steeper penalties. For instance, embezzlement of between $1,000 and $3,000 is a Class E felony punishable by a maximum of four years in prison, whereas stealing more than $1 million is a Class B felony punishable by up to 25 years in prison. All state-level embezzlement crimes may also be punished by fines typically equivalent to twice the value of the embezzled funds.
A New York Attorney Could Help with an Embezzlement of Public Funds Case
Hiring a skilled federal embezzlement attorney to defend is important as the penalties for these charges are serious and could impact you for years to come. Because our lawyers have successfully handled several of these cases, you should contact the Law Offices of Jeffrey Lichtman if you are facing charges for the embezzlement of public funds in New York. For more information about how we could help you, call today.