Embezzlement is a white-collar crime in that is a serious problem in Maryland and across the United States. Embezzlement occurs when a person in a position of trust steals or misappropriates funds and/or property from an employer, business partner or related person or entity.
Maryland Laws and Penalties
For embezzlement to occur, three factors must be present:
- There must be a financial relationship between the accused and the victim. This is also known as a fiduciary relationship. This means that the person was relying on the other person and trusted him to handle money, property or something else of value. A common fiduciary relationship that may involve embezzlement charges in Maryland is between a banker and a client. Financial advisers and their clients also can involve such charges. However, simply handling money or property for another party does not mean there is a fiduciary relationship. A cashier at a store does not have a fiduciary relationship with a customer. However, a financial counselor who handles the finances for a couple does have a fiduciary relationship.
- The accused must have gotten the property of the other person via the fiduciary relationship. The property then must have been transferred to themselves or another party. It is insufficient for the accused to simply have had access to the money or property, but that could be part of the job of the person. The accused needs to have used the property access to transfer it for his personal use and benefit. For instance, a financial advisor may transfer the stock portfolio of a client to himself, sell the stock and keep the money. Or a bookkeeper who pays invoices for a company may use some of the company’s money to pay his mortgage.
- The actions of the accused must have been on purpose. This is a necessary element of fraud and embezzlement. If a financial advisor transferred client property to himself on accident, this is not embezzlement. The prosecution in an embezzlement case must prove the transfer of property was an intentional act.
Laws and penalties for embezzlement in Maryland are found under the Maryland Code Criminal Law Title 8 – Fraud and Related Crimes. In Maryland, the following punishments are defined for theft, which includes the crime of embezzlement:
- Petty theft of $100 or less: Misdemeanor with up to 90 days in jail and $500 fine.
- Misdemeanor theft of $100 to $1000: Up to 18 months in jail and $500 fine.
- Felony theft of $1000 to $10,000: Up to 10 years in prison and fine of $10,000.
- Felony theft of $10,000 to $100,000: Up to 15 years in prison and fine of $15,000.
- Felony theft of more than $100,000: Up to 25 years in prison and fine of $25,000.
Also, Maryland has laws that prohibit you from committing financial crimes, including fraud and embezzlement, against vulnerable adults, including those with mental disabilities and those who are 68 or older. A person who is convicted of this crime when the property value is $500 or more is guilty of a felony, with a possible prison sentence of 15 years and a fine of $10,000. If the property is worth less than $500, it is a misdemeanor, with a possible punishment of $500 fine and 18 months in jail.
Maryland Embezzlement Defenses
The crime of embezzlement is a serious one, but there are possible defenses that are effective in Maryland. Below are the most common ones:
- You did not steal the property in question. This is always the best defense to an embezzlement or fraud charge in Maryland. You need to prove with documentation that you did not actually take the money or property. This defense relies upon your attorney uncovering strong evidence that you did not actually engage in embezzlement.
- Prove that the money or property was taken for a legitimate reason. Sometimes a person in a financial position of responsibility will take money or property from an organization, but it was done for a legitimate reason and not for their personal financial gain. In this type of defense, you must prove there were legitimate business purposes for taking the money or property in question. You also must prove that you did not do anything with the money for your own personal gain.
- No evidence. If you can show that the evidence the prosecution has is invalid in any way, reasonable doubt can be introduced into the embezzlement case.
- Lack of intent. No one can commit embezzlement by accident. If the money was taken by accident and you can prove it, then this is not embezzlement. You would need to prove that the property belonged to you, or your taking of it was not on purpose.
- You were under duress. A rare but valid defense is you believed harm would come to you or a loved one if you did not engage in embezzlement. You must prove that you acted under duress. This may lead to charges being dropped against you. But duress must be proven in a specific way. It is not duress if you took funds to provide for your family. You have to have had an actual risk of harm to you or your family if you did not embezzle the funds. You also might argue the duress defense if your boss threatened to fire you if you would not work with him to embezzle money.
Maryland Statute of Limitations
Maryland Code: Courts and Judicial Proceedings Section 5-106 and Section 5-107 deals with the statute of limitations in Maryland for various crimes. For embezzlement, there is a three-year statute of limitations in effect. You must be charged with the crime within three years of the date of the alleged offense for the case to proceed.
Maryland Embezzlement Cases
- An official for Archdiocese of Washington Accused of Embezzling $45,000: An employee who worked as assistant superintendant of the Archdiocese of Washington was indicted in September 2018 on charges related to a yearslong scheme to embezzle $5,000 from the archdiocese, according to state prosecutors. Kenneth P. Gaughan, 40, was charged with mail fraud for a scheme he concocted at the archdiocese, based in Hyattsville, Maryland. He allegedly had the archdiocese pay for fake invoices created for anti-bullying and crisis intervention programs.
- Business Owner Sent to Prison for Benefit Plan Embezzlement: The US District Court for the District of Maryland sentenced a business owner to one year and a day in jail. He also was ordered to pay $354,000 in restitution for violations of the Employee Retirement Income Security Act. Nathan Williams pleaded guilty to a single count of theft or embezzlement from his employer’s benefit plan. Williams failed to deposit employee contributions to the plan, instead using the money for corporate and personal expenses.
- Caretaker of Elderly Woman Pleads Guilty to Embezzlement: A caretaker who state prosecutors say stole thousands of dollars from a Chincoteague, Maryland woman pleaded guilty in September 2018 to embezzlement in Accomack County court. Donniece Williams, 32, was accused of making several cash withdrawals of thousands of dollars from the woman’s account, taking out loans in her name and cashing in a life insurance policy. She agreed to a plea agreement to pay a $10,000 fine and never work in home healthcare again.
- Embezzlement Punishments By State. (n.d.). Retrieved from https://www.criminaldefenselawyer.com/crime-penalties/federal/embezzlement.htm
- Maryland Criminal Code. (n.d.). Retrieved from https://law.justia.com/codes/maryland/2010/criminal-law/title-8/subtitle-8/8-801/
- Maryland Theft Laws. (n.d.). Retrieved from https://statelaws.findlaw.com/maryland-law/maryland-theft-laws.html