Minnesota Embezzlement Laws & Charges + Statute of Limitations

An embezzlement offense in Minnesota is a financial crime that involves the illegal use of another person’s property. Unlike a larceny or theft offense where the crime involves wrongfully possessing another person’s property, embezzlement in Minnesota happens when your position, role or job gives them lawful access to and possession of the property, but the embezzler uses the property for their own purposes.

Minnesota Laws and Penalties

To be convicted of embezzlement in Minnesota, there must be three elements present:

  • You and the alleged victim must have had a financial, or fiduciary, relationship. This means that the alleged victim was relying upon you, and entrusted you to handle their property, money or something else of value. A typical fiduciary relationship where there can be embezzlement charges in Minnesota is between a financial advisor and his client, or a banker and client. But if you merely handle money for someone else does not mean there is a fiduciary relationship. A bartender and a customer do not have a fiduciary relationship, but a financial advisor and a client do.
  • You must have obtained or taken possession of the property of the alleged victim through the fiduciary relationship. The property must be transferred to you or a third party. It is not enough for you to merely have had access to the funds. That could be part of your job, but you also must have used the access to those funds and transferred them for your own use. For example, if you are a financial advisor, you might transfer a client’s mutual fund portfolio to yourself, sell the funds and keep the money.
  • Your actions must have been purposeful. This is an essential part of being convicted of fraud or embezzlement. If you transferred your client’s property to yourself by mistake, this is not embezzlement. The transfer of property or funds must be proven to have been intentional on your part.

Embezzlement laws and punishments are outlined in the Minnesota Constitution Art. XI: Section 13, as well as Minnesota Statutes: Section 609.54.

These laws and sections state that anyone who is in the position of safeguarding funds must give security for those funds, and keep a proper entry of each sum that is received and of every payment and transfer. Also, the funds must not be converted for their own use in any way, including loans, bank deposits in their own name, or deposits other than in the name of the owner. Failure to comply with these conditions with public funds is proof under Minnesota law that you committed embezzlement of public funds, which is a felony.

State law provides if the value of the public funds is $2500 or less, you may be punished by five years in prison, and a fine of up to $10,000. If the value of the funds is more than $2500, you may be punished by up to 10 years in prison and a fine up to $20,000.

If you are convicted of larceny or embezzlement of private funds, the punishments are as follows:

  • Up to 90 days in jail and a fine of $1000 if the property is less than $500.
  • Up to one year in jail and a fine of $3000 if the property is worth $500 to $1000.
  • Up to five years in prison and fine of $10,000 if the property is worth $1000 to $35,000.
  • Up to 10 years in prison and fine of $20,000 if the property is worth $5000 to $35,000.
  • Up to 20 years in prison and fine of $100,000 if the property is worth more than $35,000.

Minnesota Embezzlement Defenses

Embezzlement defenses include:

  • Lack of evidence: As with any crime, insufficient evidence can result in a dismissal of charges. It is estimated that 40% of federal embezzlement cases are dismissed because of a lack of evidence.
  • Duress: This occurs if the person believes they will be in some type of harm if they do not commit embezzlement. However, a duress defense will not work if taking the money was to satisfy an addiction or prevent hardship to the family. This defense is more likely to work if you might lose your job unless you embezzled funds.
  • Entrapment: Occurs when the state or federal government compels you to commit a crime that they would not have committed otherwise. Stings are almost always exempt, but using bait to get a person to embezzle funds can be entrapment.
  • Lack of intent: To be convicted of most crimes, there must be intent. If you did not intend to take money or property from another person, the charge could be dismissed.
  • Insanity: This is a rare defense but it can be effective for some crimes.
  • Incapacity: If you can show you suffered a mental incapacitation when you committed the embezzlement, you may have the case dismissed. For example, if you were taking heavy medication when you committed the crime, you may not have realized what you did.

Minnesota Statute of Limitations

The statute of limitations for most misdemeanors is three years in Minnesota, according to code section 628.26. For a felony embezzlement charge, the statute of limitations is two years.

Minnesota Embezzlement Cases

  • Minnesota Company Reopens After Ex-Manager Accused of Embezzlement: The Ashby Farmers Elevator Company closed suddenly in September 2018 when an audit showed a former manager had taken more than $4 million over 15 years for personal expenses that included safaris, taxidermy and more. The former manager, Jerry Hennessey, has not been charged yet.
  • State Investigating Bingo Hall That Raises Money for Youth Hockey: A criminal investigation is being conducted at a Roseville, MN bingo hall after there were allegations of theft and embezzlement by staff of potentially hundreds of thousands of dollars. The money is intended to help families pay for youth hockey who cannot afford it otherwise.
  • Twin Valley MN Living Center Closed After $1 Million Embezzlement: The Twin Valley, MN Living Center is the home for dozens of elderly people in this small town. But after a recent embezzlement of $1 million by a former bookkeeper, the center is going to be closed. This means that many families will have to find alternative living arrangements for their loved ones.
  • Granddaughter of MN Philanthropist Accused of Embezzling $500k: Tawnee, M. Nasseff, 48, was charged in May 2018 with six counts of theft by swindle for embezzling more than $500,000 from a St. Paul MN law firm where she worked for almost 20 years. She is the daughter of the late John Nasseff Jr. who was a West Publishing executive before he became one of the city’s largest donors. The woman was fired as the firm’s bookkeeper in August 2016 when it was discovered she had overpaid herself for years.

References

  • Minnesota Embezzlement Laws and Penalties. (n.d.). Retrieved from https://statelaws.findlaw.com/minnesota-law/minnesota-embezzlement-law-and-penalties.html
  • Minnesota Statutes. (n.d.). Retrieved from https://www.revisor.mn.gov/statutes/cite/609.54
  • Defenses to Embezzlement. (n.d.). Retrieved from https://www.legalmatch.com/law-library/article/defenses-to-embezzlement.html
  • Minnesota Criminal Statute of Limitations. (n.d.). Retrieved from https://statelaws.findlaw.com/minnesota-law/minnesota-criminal-statute-of-limitations-laws.html
  • Examples and Warning Signs of Embezzlement (n.d). Retrieved from https://www.federalcharges.com/examples-warning-signs-embezzlement/
Geoffrey G. Nathan, Esq.

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