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Embezzlement Defense Attorney

Federal Defense for Alleged Misuse of Entrusted Funds and Business Assets

Arkady Bukh represents executives, employees, business owners, accountants, financial professionals and other clients facing investigations and criminal charges involving allegedly misappropriated money or property.

An embezzlement investigation may begin when a company identifies an unexplained transfer, accounting discrepancy, unauthorized payment, unusual expense, missing inventory or transfer to a related person or business. What begins as an internal audit or disagreement over company finances may later result in interviews, subpoenas, search warrants or contact from federal agents.

Legal representation may be needed after:

  • An employer begins an internal investigation
  • A forensic accountant identifies disputed transactions
  • The client is suspended or terminated
  • A bank or company account is frozen
  • Federal agents request an interview
  • A grand jury subpoena is issued
  • Computers, phones or accounting records are seized
  • A civil lawsuit is filed alongside a criminal investigation

The existence of an accounting discrepancy does not establish embezzlement. The defense should determine whether the client was authorized to use the funds, how the transactions were recorded, who approved them, whether the company received value and whether the government can prove the mental state required by the applicable statute.

What Is Embezzlement?

Embezzlement generally refers to the unlawful conversion or misappropriation of money or property by someone who was initially entrusted with access to or control over it.

This distinguishes embezzlement from a simple theft allegation. In a traditional embezzlement case, the person may have obtained access to the funds lawfully through employment, management authority, an agency relationship or another position of trust. The criminal allegation concerns what the person later did with the entrusted property.

Disputed conduct may involve:

  • Company bank accounts
  • Corporate credit cards
  • Cash receipts
  • Payroll funds
  • Customer payments
  • Escrow or trust funds
  • Government money
  • Employee-benefit plan assets
  • Inventory and equipment
  • Securities and investment funds
  • Intellectual property or other business assets

Not every use of company money outside an original budget category constitutes embezzlement. Businesses frequently operate through informal approvals, changing responsibilities, advances, reimbursements, owner distributions and related-company transfers. The complete authority structure and accounting history must be reviewed.

Federal and State Embezzlement Charges

Embezzlement is not governed by one universal federal statute.

Many disputes involving money taken from an ordinary private employer may be prosecuted under state theft or embezzlement laws. Federal jurisdiction may arise because of the type of property, the organization involved, the source of the funds or related use of interstate communications and financial institutions.

Federal statutes that may apply include:

  • 18 U.S.C. § 641, involving money, records or property of the United States
  • 18 U.S.C. § 656, involving theft, embezzlement or willful misapplication by certain bank officers, directors, agents or employees
  • 18 U.S.C. § 664, involving theft or embezzlement from an employee-benefit plan
  • 18 U.S.C. § 666, involving theft, fraud, conversion or intentional misapplication by an agent of certain organizations or government entities receiving federal benefits

The indictment may also contain wire fraud, mail fraud, bank fraud, money laundering, false-statement or conspiracy charges.

Each statute has its own elements, jurisdictional requirements and possible penalties. The general label “embezzlement” does not reveal what the government must prove in a particular case.

Who May Be Investigated?

The original page focused mainly on CEOs, CFOs, accountants and bookkeepers. Those positions may be investigated because they commonly have access to financial systems, but an embezzlement allegation can involve many different roles.

Investigations may concern:

  • Corporate officers and directors
  • Owners and business partners
  • Accounting and payroll employees
  • Office managers
  • Sales and purchasing personnel
  • Bank employees
  • Government and nonprofit employees
  • Trustees and fiduciaries
  • Benefit-plan administrators
  • Agents responsible for collecting customer funds
  • Employees authorized to use company credit cards
  • Contractors with access to company accounts or property

A title alone does not establish responsibility. The defense should identify the client’s actual authority, access level, duties and relationship to the disputed property.

Authorization to Use Company Funds

Authorization is often one of the most important issues in an embezzlement case.

A prosecutor may describe a transaction as unauthorized because it was not supported by a formal written approval. The client may contend that the payment was permitted by an owner, board member, manager or established company practice.

Authorization may arise from:

  • Employment and compensation agreements
  • Corporate bylaws or operating agreements
  • Board or shareholder resolutions
  • Bank-signing authority
  • Expense and reimbursement policies
  • Bonus or commission arrangements
  • Loan or advance agreements
  • Owner-draw practices
  • Verbal instructions
  • Course of dealing between the parties
  • Emergency authority
  • Prior approval of similar transactions

The existence of account access does not necessarily authorize every possible transaction. At the same time, the absence of a separate written approval does not automatically prove criminal misappropriation.

The defense should determine what authority the client actually received, who granted it and whether similar uses of funds had previously been accepted.

Personal Expenses and Business Purpose

Many investigations involve payments that prosecutors characterize as personal expenses charged to a company.

A disputed payment may concern travel, housing, vehicles, meals, entertainment, professional services, insurance, education or transfers to a related company.

The relevant questions include whether:

  • The expense served a legitimate business purpose
  • Personal use was allowed as compensation or a benefit
  • The client was expected to reimburse the business
  • An owner or supervisor approved the payment
  • The expense was accurately recorded
  • The company received value
  • Similar expenses were permitted for other executives
  • The payment was openly disclosed or deliberately concealed

A tax or accounting disagreement over the classification of an expense is not automatically proof of embezzlement.

Loans, Advances and Owner Distributions

A transfer may be described differently by the prosecution and the defense.

The government may characterize it as stolen money, while the client may understand it as:

  • A shareholder distribution
  • An owner draw
  • A salary advance
  • A business loan
  • Repayment of money previously contributed
  • Reimbursement of expenses
  • Payment under a compensation agreement
  • Transfer between related companies
  • Temporary movement of funds to cover another obligation

The legal and accounting treatment may depend on corporate records, tax filings, repayment history, communications and prior business practices.

Poor documentation can create suspicion, but poor documentation alone does not establish criminal intent.

Accounting Records and Financial Evidence

Embezzlement investigations usually rely heavily on financial records.

Investigators may review bank statements, general ledgers, expense reports, payroll records, invoices, checks, credit-card statements, journal entries and tax documents. They may also examine emails, text messages, accounting-system logs and electronic approval records.

The defense should not rely only on a summary prepared by the employer or the government. Original records should be compared with the conclusions drawn from them.

Important questions may include:

  • Who entered or changed each accounting entry?
  • Who had access to the bank and accounting systems?
  • Were credentials shared?
  • Who approved the transaction?
  • Was the payment recorded openly or concealed?
  • Did the company receive goods, services or repayment?
  • Were transactions assigned to the wrong account?
  • Were deposits, refunds or reversals omitted from the government’s calculation?
  • Did another employee control the supporting documents?
  • Are accounting records incomplete or internally inconsistent?

A bookkeeping entry can describe a transaction, but it may not establish the client’s intent or the legal authority for the payment.

Electronic Records and Audit Trails

Modern accounting systems may preserve detailed audit trails showing when a transaction was created, edited, approved or deleted.

Relevant electronic evidence may include:

  • User-account histories
  • Login records
  • IP addresses
  • Device identifiers
  • Approval workflows
  • Metadata
  • Cloud-storage records
  • Electronic signatures
  • Bank-authentication logs
  • Files recovered from seized computers and phones

An entry associated with the client’s username does not always prove that the client personally made it. Accounts may be shared, passwords may be known to assistants and transactions may be imported automatically from other systems.

The defense may need to compare system logs with office schedules, device records and testimony from employees who actually handled the transaction.

Intent and Knowing Misappropriation

Criminal intent is a central issue in an embezzlement prosecution.

The exact mental-state requirement depends on the statute charged. Federal statutes may refer to knowingly converting property, willfully misapplying funds or unlawfully and willfully using entrusted assets.

A criminal case generally requires more than proof of:

  • An accounting mistake
  • Negligent supervision
  • Violation of an internal policy
  • Poor documentation
  • A failed business decision
  • A disagreement over compensation
  • An inability to repay a loan
  • Use of the wrong accounting category

Prosecutors may attempt to establish intent through alleged concealment, false invoices, altered records, secret accounts, repeated transfers or personal use of company funds.

The defense should examine the entire transaction history. Conduct that appears suspicious in isolation may have an explanation when viewed with compensation agreements, repayment records, company practices and communications with owners or supervisors.

Concealment and False Records

The government may argue that accounting entries or business documents were created to conceal unauthorized transactions.

Allegations may involve:

  • False vendors
  • Duplicate invoices
  • Altered checks
  • Fictitious employees
  • Misclassified expenses
  • Deleted entries
  • Undisclosed related-party payments
  • False reimbursement requests
  • Transfers divided into smaller amounts
  • Backdated documents

The defense should determine who created the record and whether the disputed description was actually false.

An accounting employee may have followed instructions from management. A category may have been selected for tax or bookkeeping convenience. A vendor name may reflect a trade name rather than a fictitious company.

The existence of an inaccurate entry does not automatically prove that the client intended to steal.

Internal Company Investigations

An embezzlement allegation often begins before law enforcement becomes involved.

A company may conduct an internal investigation after receiving a complaint, identifying a shortfall or discovering an unusual transaction during an audit.

The investigation may include:

  • Preservation of accounting and banking records
  • Review of access permissions
  • Employee interviews
  • Examination of emails and messages
  • Analysis of expense reports
  • Comparison of invoices with delivered goods or services
  • Review of related-party transactions
  • Forensic imaging of company devices
  • Calculation of the claimed financial loss

An internal investigation is not necessarily neutral. The company may already have taken a position, terminated the employee or filed a civil claim before all records are reviewed.

Company counsel represents the organization, not automatically the individual employee or executive. A person asked to participate in an internal interview should understand who the attorneys represent and how the information may be used.

Preservation of Records

Once an investigation begins, relevant records should be preserved.

Documents should not be deleted, altered, backdated or recreated to improve their appearance. Such conduct can create separate allegations involving obstruction, false statements or destruction of evidence.

Preservation may include accounting data, bank records, emails, text messages, contracts, expense documentation, company policies and earlier versions of financial reports.

Records supporting the defense can be as important as records identified by the accuser. These may include approvals, compensation discussions, evidence of repayment and communications showing that management knew about the transactions.

Forensic Accounting

Forensic accounting can be important in cases involving numerous transactions or disputed calculations.

A forensic accountant may help reconstruct the movement of funds and compare the prosecution’s theory with the company’s books and banking records.

The analysis may examine:

  • The source and destination of funds
  • Authorized and unauthorized signatories
  • Compensation and reimbursement history
  • Intercompany transfers
  • Owner contributions and distributions
  • Loans and repayments
  • Duplicate or reversed transactions
  • Amounts returned to the business
  • Goods or services received
  • Timing of accounting entries
  • The relationship between claimed loss and actual economic harm

Forensic accounting is not limited to finding incriminating transactions. It can also identify errors, omitted repayments, duplicate amounts and legitimate transactions included in an overstated loss calculation.

Calculating the Alleged Loss

The amount claimed by an employer or prosecutor may have a significant effect on the direction of the case and potential sentencing issues.

A company may initially classify every disputed payment as stolen. That calculation may fail to account for:

  • Authorized compensation
  • Legitimate business expenses
  • Amounts repaid
  • Refunds and reversals
  • Goods or services provided
  • Owner distributions
  • Duplicate transactions
  • Payments made by another person
  • Transfers between commonly owned companies
  • Amounts outside the relevant time period

The defense should reconstruct the calculation from original records rather than accept a total stated in a complaint, audit report or government spreadsheet.

Federal Investigation Stages

Internal Review and Referral

The matter may begin with an audit, employee complaint, whistleblower report or dispute among owners.

The company may retain attorneys and forensic accountants before contacting law enforcement. It may also file a civil lawsuit or insurance claim.

Government Investigation

Federal agents may obtain bank records, interview employees, request company documents and review tax or accounting information.

The client may receive a subpoena, interview request or target letter. In some cases, agents execute a search warrant before the client knows an investigation exists.

Grand Jury Proceedings

A federal grand jury may receive records and witness testimony to determine whether probable cause exists for an indictment.

A subpoena does not automatically mean that its recipient will be charged. The recipient’s status and potential exposure should be evaluated before records or testimony are provided.

Indictment and Initial Proceedings

If an indictment is returned, the defendant may be arrested or arrange a voluntary surrender.

Initial proceedings may address release or detention, arraignment and entry of a plea.

An indictment is a formal accusation, not proof of guilt.

Discovery and Financial Review

The defense may receive accounting records, bank documents, witness statements, audit reports, search-warrant materials and electronic evidence.

The records should be organized by transaction, account, alleged victim, date and criminal count.

Motions, Negotiations or Trial

Pretrial issues may concern search warrants, statements to investigators, electronic evidence, business records and expert testimony.

Any proposed resolution should be evaluated after examining the evidence, possible defenses, loss calculation, restitution and forfeiture exposure.

If the case proceeds to trial, the government must prove every element of each charge beyond a reasonable doubt.

Related Fraud and Financial Charges

An embezzlement investigation may result in additional charges.

Wire and Mail Fraud

Wire fraud may be alleged when electronic communications or bank transfers were supposedly used as part of a scheme. Mail fraud may involve documents, checks or packages sent through USPS or qualifying commercial carriers.

Bank Fraud

Bank fraud may be charged when the government claims that a scheme targeted a financial institution or property under its custody or control.

Money Laundering

Money-laundering allegations may arise when prosecutors claim that criminal proceeds were transferred, spent, concealed or used in certain financial transactions.

False Statements and False Records

A client may face separate allegations for statements to investigators, banks, auditors or other entities.

Identity Theft

Identity-related charges may arise if another person’s name, account or identifying information was allegedly used.

Tax Offenses

A financial investigation may lead to questions about whether income was reported or whether business deductions and records were accurate.

Conspiracy and Aiding and Abetting

Prosecutors may claim that several employees, executives, vendors or outside participants agreed to misappropriate company assets or intentionally assisted the conduct.

Each additional charge has independent elements. Proof of an accounting discrepancy does not automatically prove wire fraud, money laundering or conspiracy.

Conspiracy Allegations

An embezzlement investigation may involve several people with access to company funds.

One person may approve payments, another may prepare accounting entries and another may receive money or property.

The government may argue that these individuals participated in one coordinated plan. However, ordinary workplace cooperation does not establish a criminal conspiracy.

The defense should examine whether:

  • An unlawful agreement actually existed
  • The client knew its alleged purpose
  • The client intended to join it
  • The client followed instructions without knowing they were improper
  • Different transactions have been incorrectly combined
  • A cooperating witness is attempting to reduce personal responsibility
  • The client withdrew from or never participated in the broader conduct

The client’s responsibility should be based on personal knowledge and actions, not merely job title or association.

Embezzlement Versus a Business or Employment Dispute

A disagreement over company money may be civil rather than criminal.

Possible civil issues include:

  • Unpaid compensation
  • Disputed bonuses or commissions
  • Shareholder distributions
  • Partner withdrawals
  • Expense reimbursements
  • Loans to an employee or owner
  • Breach of fiduciary duty
  • Corporate-accounting disputes
  • Ownership of business property
  • Violation of an employment agreement

A company may argue that a payment was unauthorized, while the employee or owner believes it was compensation or repayment.

Civil liability and criminal guilt use different legal standards. A breach of policy or fiduciary duty does not automatically establish the mental state required for a criminal conviction.

Civil and criminal proceedings may occur at the same time, but the defense should not allow the existence of a business dispute to be treated as proof of embezzlement.

Embezzlement Defense Strategies

The Use of Funds Was Authorized

The transaction may have been approved through a contract, corporate resolution, verbal instruction or established practice.

The defense may rely on communications, prior transactions, testimony from other executives and company records.

The Funds Belonged to the Client

A payment may have represented compensation, reimbursement, repayment of a loan, an owner distribution or return of contributed capital.

Lack of Criminal Intent

The client may have made a bookkeeping mistake, misunderstood company policy or believed that the transaction was permitted.

Poor judgment does not automatically establish knowing conversion or willful misapplication.

The Accounting Records Are Incomplete

The company may have omitted repayments, refunds, services provided or offsetting transactions.

A forensic reconstruction may materially change the claimed loss.

Another Person Controlled the Transaction

Other employees may have used the account, accounting credentials or company card.

The defense should analyze system logs, approvals and access history rather than assume responsibility from the name appearing on an account.

Reliance on Owners or Financial Professionals

The client may have relied on instructions from an owner, accountant, attorney, bookkeeper or supervisor.

Reliance is not automatically a complete defense, but it may be relevant to authorization, knowledge and intent.

Legitimate Business Purpose

A disputed transfer may have funded company operations, a related business, customer obligations or services that benefited the organization.

No Entrustment or Control

The government may be unable to establish that the client was entrusted with or exercised control over the property in the manner required by the charged theory.

No Knowing Participation in a Conspiracy

The client may have performed an ordinary task without knowing that another person was allegedly misappropriating funds.

Unreliable Internal Investigation

The employer’s investigation may have started from an incorrect assumption, excluded favorable records or relied on statements from interested participants.

Improper Search or Statements

Evidence may be challenged when agents conduct an unsupported search, exceed the scope of a warrant or obtain statements in violation of the client’s rights.

Incorrect Loss Calculation

The prosecution may include authorized payments, duplicate transactions, legitimate expenses or amounts that were returned.

Consequences of Embezzlement Charges

There is no single universal penalty for every embezzlement case.

The possible consequences depend on the federal or state statute, type of property, amount involved, number of transactions, client’s role and criminal history.

A conviction may result in imprisonment, criminal fines, restitution, supervised release and forfeiture of property connected with the offense.

Executives, accountants, attorneys, financial professionals and other licensed individuals may also face employment or disciplinary consequences. Non-U.S. citizens may need separate advice about possible immigration effects.

The original page’s broad statement that embezzlement is always punishable by a particular number of years was inaccurate. Different federal statutes carry different maximum penalties, and a statutory maximum does not determine the sentence in an individual case.

How Embezzlement Allegations Can Affect a Business

An investigation can disrupt a business even before charges are filed.

Accounts may be restricted, insurance carriers may become involved and lenders or investors may request information. Employees may be suspended or interviewed, while computers and financial records may be seized.

The business may also face a civil lawsuit, insurance claim, tax review or dispute among owners.

Management should preserve records and determine whether the company, owners and individual employees have different legal interests. Company counsel does not automatically represent every executive or employee.

The accusation alone does not establish that funds were stolen or that the person under investigation acted with criminal intent.

Bukh Law Firm Embezzlement Defense Services

Representation may include:

  • Defense during internal and federal investigations
  • Communication with prosecutors and investigating agencies
  • Responses to grand jury subpoenas and document requests
  • Preparation for interviews
  • Review of accounting, banking and electronic records
  • Analysis of authorization and company policies
  • Coordination with forensic accountants
  • Reconstruction of disputed transactions
  • Review of search warrants and seized devices
  • Defense against related fraud, conspiracy and money-laundering charges
  • Pretrial motions and plea negotiations
  • Federal or state trial preparation
  • Review of restitution, loss and forfeiture claims
  • Sentencing and post-trial representation

The scope of representation depends on the statute, evidence and procedural stage.

What to Do During an Embezzlement Investigation

Do not delete, alter or recreate accounting records, emails, messages, invoices or expense documents.

Preserve records showing authorization, compensation arrangements, repayments, company practices and the legitimate business purpose of disputed transactions.

Before participating in an internal interview or speaking with government agents, determine who the attorneys represent, what conduct is being investigated and whether you are considered a witness, subject or target.

Arkady Bukh represents clients before and after embezzlement charges are filed, including during internal investigations, grand jury proceedings, search warrants, negotiations, trials and sentencing.

Embezzlement Defense FAQ

Is Arkady Bukh an embezzlement attorney?

Yes. Arkady Bukh represents executives, employees, business owners and financial professionals in investigations involving entrusted funds, company property and related fraud allegations.

Is embezzlement one federal crime?

No. Different federal statutes apply depending on the property, organization and source of the funds. State embezzlement and theft laws may also apply.

What is the difference between embezzlement and theft?

Embezzlement usually involves property that was initially entrusted to or lawfully accessed by the accused. The allegation is that the person later converted or misapplied it without authority.

Does access to an account prove authorization?

No. Access and authorization are related but different questions. The defense should determine what transactions the client was actually permitted to make.

Does the absence of written approval prove embezzlement?

No. Authorization may also arise from verbal instructions, corporate practice, compensation arrangements or prior approved transactions.

Can personal expenses be treated as embezzlement?

They may be investigated, but the government must establish that the expenses were unauthorized and that the client acted with the mental state required by the charged statute.

Can an owner embezzle from a company?

An owner’s authority depends on the corporate structure, ownership interests, agreements and rights of other owners or the entity. Ownership does not necessarily provide unlimited personal authority over company property.

Does an accounting error prove criminal intent?

No. Negligent bookkeeping, misclassification and failure to follow internal policy do not automatically prove knowing or willful misappropriation.

What does a forensic accountant do in an embezzlement case?

A forensic accountant can trace funds, compare bank and accounting records, identify repayments and determine whether the claimed loss includes legitimate or duplicate transactions.

Can an employer conduct an internal investigation before contacting law enforcement?

Yes. Many matters begin with an internal audit or investigation and are later referred to law enforcement or used in civil litigation.

Does company counsel represent the employee?

Usually, company counsel represents the organization. An employee or executive may need independent legal advice.

Can embezzlement be charged with wire fraud?

Yes. Wire fraud may be added when prosecutors allege that electronic communications or transfers were used in a fraudulent scheme.

Can embezzlement include money-laundering charges?

Potentially. Money-laundering charges may be alleged when the government claims that proceeds of specified unlawful activity were involved in certain later financial transactions.

Can repayment prevent criminal charges?

Repayment can be relevant to intent, loss and sentencing, but it does not automatically eliminate criminal exposure.

Does an indictment mean that the defendant is guilty?

No. An indictment is a formal accusation. The government must prove every element beyond a reasonable doubt unless the matter is resolved through another procedure.