Embezzlement in the Retail Environment

Embezzlement is a crime that involves a breach of trust.

embezzlement

Embezzlement is a type of theft involving a person or persons entrusted to property owned by someone else (such as an employee) who then uses fraudulent means to illegally misappropriate the property or cash entrusted to them.

Embezzlement is a breach of the fiduciary responsibilities placed upon a person. In this type of fraud, the assets are originally under the control of the person lawfully, but the person then uses the assets for unintended purposes.

Find out where the real threat to your company lies by reading this FREE Special Report, Employee Theft: Statistics, Interviewing Techniques and Tips to Optimize your Employee Theft Policy.

For example, a cash office manager would be authorized to have control over cash for business purposes and management. However, if the cash office manager took possession of cash and illegally removed it from the cash office for their own personal use, this would constitute a form of embezzlement. If an attorney has control of an individual’s assets in order to manage their financial affairs but misappropriates some or all of their client’s money into the attorney’s personal bank account, this would also constitute embezzlement.

Elements common to embezzlement would include:

  • The assets must belong to someone other than the accused (such as an employer)
  • The assets must be converted to the perpetrator subsequent to their lawful possession of it. In other words, the property was originally under their lawful control, and they then illegally took or used the asset without the consent of the owner.
  • The perpetrator must be in a position of trust, with the property held by him or her pursuant to a particular fiduciary duty.
  • The perpetrator must have the intent to defraud the owner at the time of conversion.

Simply stated, embezzlement involves a breach of trust. The nature of embezzlement can be both minor in nature (for example, a dishonest employee pocketing a few dollars from the cash register), or involve immense sums of money and sophisticated schemes (for example, when the executives of a large company commit expense report fraud to the tune of millions of dollars, transferring the funds into personal accounts).

More often than not, embezzlement is performed in a manner that is premeditated, systematic and/or methodical, with the explicit intent to conceal the activities from other individuals, usually because it is being done without their knowledge or consent.

LPF LogoBy capitalizing on opportunities to enhance our knowledge and education, we are making an investment in our own future. To learn more about developing your leadership skills and the certification process, visit losspreventionfoundation.org.

Comments

Leave a Reply

Enter Your Log In Credentials
This setting should only be used on your home or work computer.

×

Send this to friend