Guide · Business fraudWhat Is Embezzlement?
The legal definition, how it differs from theft, larceny and fraud, how Florida and federal law charge it, and what to do if you suspect an employee.
By Geoffrey B. Davis Jr.Updated November 11, 20269 min read
In brief
Embezzlement is theft by a trusted insider. The legal idea is old and precise; the everyday version is a bookkeeper writing checks to a shell company or an office manager pocketing deposits. This guide explains the elements, how embezzlement differs from larceny and fraud, how Florida and federal law charge it, how it is usually found, and what a business should do first.
Key points
- 01
Lawful access, unlawful use
The defining feature is that the property came into the person’s hands lawfully, then was fraudulently converted.
- 02
Florida calls it theft
Florida charges embezzlement under its general theft statute, graded by value, with amounts from one scheme aggregated.
- 03
Tips find more schemes than anything else
In the ACFE’s 2026 study, 43% of occupational frauds were first detected by a tip.
- 04
Do not confront first
Preserve records, involve counsel and notify the insurer before anyone talks to the suspect.
What is embezzlement?
The classic American definition comes from the U.S. Supreme Court: “Embezzlement is the fraudulent appropriation of property by a person to whom such property has been entrusted, or into whose hands it has lawfully come.” The Court added that it differs from larceny because “the original taking of the property was lawful, or with the consent of the owner,” while in larceny the intent to steal must exist when the property is taken.1
That gives four practical elements:
- Property of another. Money, goods, data or other property belonging to the employer, client, trust or other owner.
- Lawful possession or entrustment. The person had access because of a position of trust: employee, officer, agent, trustee, guardian or contractor. In Moore, the indictment failed because it did not allege that the money came into the defendant’s possession by virtue of his job.1
- Conversion. The person took the property for their own use, or used or disposed of it in a way the owner did not authorize.
- Intent. The conversion was knowing and fraudulent, not an honest mistake or an authorized expense later disputed.
Entrustment is what makes embezzlement hard to see. The person usually has the authority to touch the money, so a single transaction looks normal. It takes a pattern, traced to records the embezzler did not control, to show that the money went where the owner never agreed it should.
Embezzlement, theft, larceny and fraud.
The terms overlap, and in Florida they have been merged. Florida’s theft definitions say that “obtains or uses” includes conduct previously known as stealing, larceny, purloining, abstracting, embezzlement, misapplication, misappropriation, conversion, and obtaining money or property by false pretenses, fraud or deception.2 The older distinctions still matter for how a case is investigated and, in federal law, for which statute applies.
| Offense | How the person gets the property | Intent to steal formed | Typical example |
|---|---|---|---|
| Embezzlement | Lawfully, through a position of trust | After lawful possession | A bookkeeper pays personal bills from the company account |
| Larceny | By taking it without the owner’s consent | At the time of taking | An employee walks out with inventory from the stockroom |
| Fraud (false pretenses) | By deceiving the owner into handing it over | Before or at the time of the deception | A vendor bills for work it never performed |
| Theft (Florida) | Any of the above | Knowingly obtaining or using with intent to deprive or appropriate | All three examples above can be charged as theft |
The larceny and embezzlement distinction follows Moore v. United States; the Florida row follows sections 812.012 and 812.014.
Source: Moore v. United States, 160 U.S. 268;1 Fla. Stat. §§812.012, 812.014.23
Workplace cases often combine them. A bookkeeper who sets up a fake vendor (deception) and then pays its invoices from funds she controls (conversion) has committed what accountants call a billing scheme, which in Florida is simply theft.
How is embezzlement charged?
Florida
Under section 812.014, a person commits theft if he or she knowingly obtains or uses, or tries to obtain or use, another’s property with intent to deprive the owner of a right to it or a benefit from it, or to appropriate it to his or her own use or the use of someone not entitled to it.3 The degree depends mainly on value.
| Value | Offense | Maximum prison term |
|---|---|---|
| $100,000 or more | Grand theft, first degree (first-degree felony) | Up to 30 years |
| $20,000 to under $100,000 | Grand theft, second degree (second-degree felony) | Up to 15 years |
| $750 to under $20,000 | Grand theft, third degree (third-degree felony) | Up to 5 years |
| $100 to under $750 | Petit theft, first degree (first-degree misdemeanor) | Up to 1 year |
| Under $100 | Petit theft, second degree (second-degree misdemeanor) | Up to 60 days |
Statutory maximums; actual sentences depend on Florida’s sentencing rules and the facts. Prior theft convictions can raise petit theft. Thresholds checked against the 2026 statute text.
For embezzlement the key rule is aggregation: amounts taken in separate thefts “pursuant to one scheme or course of conduct” may be added together to set the degree.2 Two hundred checks of $600 each can be charged as one $120,000 first-degree felony rather than two hundred misdemeanors.
Federal law
There is no single federal embezzlement crime; Congress has written statutes for particular kinds of property and positions. Examples:
- 18 U.S.C. §641: embezzling or converting money or property of the United States; up to 10 years, or up to one year if the aggregate value is $1,000 or less.5
- 18 U.S.C. §656: embezzlement or willful misapplication of bank funds by an officer, director, agent or employee of a federally connected bank; up to 30 years and a $1,000,000 fine, or up to one year if the amount is $1,000 or less.6
- 18 U.S.C. §664: embezzlement from an employee welfare or pension benefit plan subject to Title I of ERISA; up to five years.7
- 18 U.S.C. §666: embezzlement of $5,000 or more by an agent of an organization or government that receives more than $10,000 a year in federal program benefits; up to 10 years.8
Which forum applies is a question for prosecutors and counsel; the financial evidence needed is the same. Our whitepaper on small-business embezzlement covers the Florida rules, restitution and insurance in more depth.
Common workplace examples.
The Association of Certified Fraud Examiners (ACFE) studied 2,402 occupational fraud cases for its 2026 report; all figures here are from that edition. Asset misappropriation, which is where most embezzlement falls, appeared in 90% of cases with a median loss of $100,000.9 The most frequent schemes were:
- Theft of noncash assets (23% of cases, median loss $75,000): inventory, equipment, customer data.10
- Billing schemes (21%, median $90,000): paying invoices from shell companies, inflated invoices or personal purchases.10
- Expense reimbursement (13%, median $36,000): fictitious or inflated expense claims.10
- Check and payment tampering (10%, median $114,000, the costliest asset scheme): forging or altering checks, or redirecting electronic payments.10
- Payroll, skimming and cash larceny (8% to 10% each): ghost employees or falsified hours, and taking cash before or after it is recorded.10
Small businesses are not spared. Organizations with fewer than 100 employees had a median loss of $126,000, the highest of any size group, and billing, skimming and check tampering were all markedly more common there than at larger organizations.11
Embezzlement by professionals follows the same pattern on a larger scale. Our case study of Alex Murdaugh’s financial crimes shows the pattern at scale: a lawyer who pleaded guilty in 2023 to state charges including breach of trust and money laundering for taking millions in settlements from injured clients and millions from his own law firm over more than a decade.12 Owners who want help with a suspected scheme can start with business fraud and financial investigations.
How is embezzlement detected?
Usually by someone noticing. In the ACFE’s 2026 data, 43% of frauds were first detected by a tip, nearly three times as often as any other method; internal audit found 15% and management review 13%. Employees supplied 55% of tips, customers 21% and vendors 11%.13
The typical scheme lasted 12 months before detection.9 Behavior often gives it away: 84% of perpetrators showed at least one behavioral red flag, most commonly living beyond their means (39%), financial difficulties (29%) and an unusually close association with a vendor or customer (17%).14
What to do if you suspect an employee.
The instinct is to confront the person. Resist it until the evidence is safe. An early confrontation gives the person a chance to destroy records, move money or prepare an explanation.
- 01
Write it down
Note what you saw, when and how, and keep the circle of people who know small.
- 02
Call counsel
A business or white-collar attorney can direct the inquiry and advise on employment, insurance and reporting decisions.
- 03
Secure money and records
Tighten bank approvals, get statements and check images straight from the bank, and preserve devices, email and the accounting file.
- 04
Notify the insurer
Give written notice under any crime or employee dishonesty policy and calendar the proof-of-loss deadline in the policy.
- 05
Examine, then decide
Have the records examined and the loss quantified before any interview, termination or police report.
Getting the money back
Florida’s civil theft statute gives a person injured by theft a claim for three times actual damages, with a $200 minimum, plus reasonable attorney’s fees and costs, if the theft is proven by clear and convincing evidence. Before suing, the victim must make a written demand; if the person pays within 30 days, they receive a written release.15 Insurance claims and criminal restitution run alongside.
Fraud Examination Service examines suspected embezzlement for Florida businesses and their attorneys: tracing payments, testing vendor and payroll records, and documenting the loss for insurers, prosecutors and courts. We do not perform audits or tax work and say so when a CPA is needed. Learn more about how we investigate employee theft.
Common questions.
Short answers. The numbered notes link to the sources.
Embezzlement is stealing money or property that was lawfully placed in your care. The person did not break in or trick anyone to get access; they were trusted with it, as an employee, bookkeeper, trustee or agent, and then took it for themselves or used it in a way the owner never allowed.
Embezzlement is a kind of theft. Traditionally, larceny meant taking property without the owner’s consent, while embezzlement meant converting property the person already held lawfully. Florida no longer separates them: its theft statute expressly covers conduct previously known as embezzlement, larceny, misappropriation and conversion.
It is charged as theft, and the degree depends on value. Property worth $750 or more is grand theft, a felony: third degree up to $20,000, second degree from $20,000 to under $100,000, and first degree at $100,000 or more. Below $750 it is petit theft, a misdemeanor, unless prior convictions raise it.
Most often by a tip. In the ACFE’s 2026 study, 43% of occupational frauds were first detected through tips, nearly three times any other method, and over half of those tips came from employees. Internal audit and management review were the next most common ways schemes came to light.
Do not confront them yet. Write down what you noticed, call your business attorney, preserve records and devices, get statements directly from the bank, tighten payment approvals, and notify your crime insurer under the policy terms. Then have the records examined before deciding on any interview or police report.
Yes. Florida’s civil theft statute allows a victim who proves theft by clear and convincing evidence to recover three times actual damages plus attorney’s fees, after first sending a written demand. Other claims, such as conversion and breach of fiduciary duty, may also apply.
Sources
Sources and method.
Facts were checked on November 11, 2026, against the Supreme Court’s opinion in the U.S. Reports, the official Florida Senate statute texts, the U.S. Code and the ACFE’s 2026 report PDF.
- 1Supreme Court of the United States (U.S. Reports, Library of Congress) · December 23, 1895Moore v. United States, 160 U.S. 268
- 2The Florida Senate · 2025Florida Statutes §812.012, definitions
- 3The Florida Senate · 2026Florida Statutes §812.014, theft
- 4The Florida Senate · 2025Florida Statutes §775.082, penalties
- 5Legal Information Institute, Cornell Law School · Current text18 U.S.C. §641, public money, property or records
- 6Legal Information Institute, Cornell Law School · Current text18 U.S.C. §656, theft, embezzlement or misapplication by bank officer or employee
- 7Legal Information Institute, Cornell Law School · Current text18 U.S.C. §664, theft or embezzlement from employee benefit plan
- 8Legal Information Institute, Cornell Law School · Current text18 U.S.C. §666, theft or bribery concerning programs receiving federal funds
- 9Association of Certified Fraud Examiners · 2026Occupational Fraud 2026: A Report to the Nations, Key findings (pp. 4–5)
- 10Association of Certified Fraud Examiners · 2026Occupational Fraud 2026: A Report to the Nations, Figure 5: asset misappropriation sub-schemes (p. 15)
- 11Association of Certified Fraud Examiners · 2026Occupational Fraud 2026: A Report to the Nations, Size of organization, Figures 22–24 (pp. 32–34)
- 12Insurance Journal (Associated Press) · November 20, 2023Murdaugh pleads guilty to state financial crimes
- 13Association of Certified Fraud Examiners · 2026Occupational Fraud 2026: A Report to the Nations, Initial detection and who reports fraud, Figures 13–14 (pp. 23–24)
- 14Association of Certified Fraud Examiners · 2026Occupational Fraud 2026: A Report to the Nations, Behavioral red flags, Figure 55 (p. 68)
- 15The Florida Senate · 2026Florida Statutes §772.11, civil remedy for theft or exploitation
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This guide is general information, not legal or tax advice. Talk to your attorney about your own matter.