Can an owner of a company be charged with embezzlement?
Asked by: Horacio Wintheiser | Last update: February 8, 2026Score: 4.2/5 (52 votes)
Yes, a business owner can be charged with embezzlement, especially if they misappropriate funds or assets that are entrusted to them, even from their own company, by fraudulently taking money for personal use, failing to report income (tax fraud), or acting against the interests of other owners/shareholders, leading to personal liability for fraud, breach of fiduciary duty, and potentially serious criminal charges depending on the value and jurisdiction.
Can the owner of a company embezzle?
A business owner can potentially be charged with embezzlement if the business is not solely owned. Embezzlement typically involves misappropriating funds that one has been entrusted with, even as a co-owner.
Can a business partner be charged with embezzlement?
Embezzlement occurs when a business partner wrongfully takes money or property that has been entrusted to their care but is owned by the business or other partners. Unlike outright theft, embezzlement involves misappropriation by someone in a position of trust who has legal access to assets but not ownership.
What's it called when you steal from your own company?
What Does It Mean to Embezzle Money? Embezzlement occurs when an individual misappropriates or wrongfully takes funds, assets, or property entrusted to them by their employer or organization.
What are the four elements of embezzlement?
For an embezzlement case, four core elements must be proven: a fiduciary relationship (trust) existed, the defendant obtained the property through that position, they fraudulently converted it for personal gain, and they had the intent to deprive the owner of it. Essentially, someone in trust misused entrusted property with the intent to steal it for themselves.
Is theft from a business by a partner criminal fraud or embezzlement?
How to prove someone is guilty of embezzlement?
What must a prosecutor prove? The burden of proof in this case, as in any criminal case, is with the prosecution. The prosecutor must demonstrate both that you were in legitimate possession of the property and that it was given to you by another person in order to prove embezzlement.
What is the minimum amount for embezzlement?
Embezzlement is a felony charge when the property embezzled is worth at least $1,000. A felony conviction on your record can negatively impact your reputation and future opportunities. Additionally, a felony embezzlement conviction can result in several years in prison and thousands of dollars in fines.
What's the difference between stealing and embezzlement?
For example, if someone breaks into a store and steals cash from a register, that is theft. But if an employee is given access to company funds and secretly diverts some of those funds for personal use, that is embezzlement. The breach of trust is what distinguishes embezzlement from general theft under California law.
How is intent proven in embezzlement cases?
Circumstantial Nature of Evidence
Prosecutors typically do not have a “smoking gun” proving fraudulent intent; instead, they must build a case based on financial records, emails, text messages, and witness testimony.
What is considered a large amount in embezzlement?
If the amount exceeded $950, the offense is a "wobbler" that can either be charged as a misdemeanor or a felony, with a maximum sentence of three years in prison. If the amount embezzled exceeded $65,000, an additional year in prison can be tacked on to any prison sentence.
How to sue a business partner for embezzlement?
An attorney can help you file your lawsuit, if necessary. They can help you fight for compensation and accountability. In California, a business partner who engages in mismanagement or fraud may be held liable for financial losses, lost profits, or other harm suffered as a result of their actions.
What happens if you own a business and go to jail?
Your business may also suffer due to diverted focus towards criminal proceedings over business operations. If you are convicted of a felony, you will likely be looking at prison time. It's hard to run a business while in prison. Thus, you will need to hire someone to run the business.
Is $5000 considered money laundering?
A $5,000 transaction * can* be considered money laundering if done with criminal intent or knowledge that funds are from illegal activities, especially if it's part of a series of transactions (e.g., over $5,000 in 7 days, or $25,000 in 30 days under some laws) to disguise illicit proceeds, but simply depositing $5,000 legally earned money isn't inherently illegal, though it might trigger bank scrutiny. The key is intent and the context of illegal activity, not just the amount, though specific reporting thresholds for banks exist (like $10,000 for IRS cash reporting).
Can the owner of an LLC be sued personally?
Yes, someone can sue you personally even if you have an LLC, but it's generally for your own wrongful acts or if you fail to maintain the LLC's separation from your personal life (piercing the corporate veil), not for the LLC's ordinary business debts or liabilities, which are usually protected. Exceptions include personal negligence, intentional harm, personally guaranteed loans, unpaid payroll taxes, and failing to follow business formalities.
Can the owner of a company use company money for personal use?
It's illegal and can carry serious consequences. The second is more common—and less obviously wrong. A business owner uses company funds to cover personal expenses but records them properly as shareholder distributions or owner draws.
What amount of money makes it a federal crime?
§ 641 makes it a crime to steal "any record, voucher, money, or thing of value of the United States or of any department or agency thereof." If the property stolen is worth less than $1,000, the statute authorizes fines and a maximum prison term of one year.
What is the best defense against embezzlement?
Demonstrate that you did not take the money
This defense is very straightforward and relatively simple, but is likely your best option to prove the charges against you are false. Your attorney will seek to find any evidence that proves you did not actually take the money you are accused of embezzling.
What proof do you need to press charges?
Police need probable cause to charge someone, meaning enough facts for a reasonable person to believe a crime occurred and the suspect committed it, using evidence like witness statements, officer observations, physical evidence (DNA, weapons), digital records (texts, video), or suspect admissions, though the standard for charging is lower than proving guilt at trial.
What is the hardest thing to prove in court?
The hardest things to prove in court involve intent, causation (especially in medical cases where multiple factors exist), proving insanity, and overcoming the lack of physical evidence or uncooperative victims, often seen in sexual assault or domestic violence cases. Proving another person's mental state or linking a specific harm directly to negligence, rather than underlying conditions, requires strong expert testimony and overcoming common doubts.
Is embezzlement easy to prove?
Usually, they're not going to prosecute somebody for embezzlement unless it involves a decent amount of funds or goods that are being stolen. If the police and prosecutors have the evidence, it's pretty simple to prove these cases.
What happens to someone who embezzled money?
If you embezzle money, you face severe criminal and civil penalties, including jail time, hefty fines, mandatory restitution (repaying the stolen funds), asset forfeiture, and a permanent criminal record that destroys future employment prospects, especially in finance, and can even affect immigration status. Consequences escalate with the amount stolen, ranging from misdemeanors for smaller sums to felonies with significant prison sentences for larger amounts, and can result in job loss, professional license revocation, and deep personal financial ruin.
What is the minimum sentence for embezzlement?
There's no single minimum sentence for embezzlement as penalties vary widely by state and federal law, depending on the amount stolen, the offender's criminal history, and if public funds or vulnerable persons were involved; however, even small amounts can lead to jail time (months) or probation, while larger amounts often result in felony charges with mandatory prison time (years), substantial fines, and potential restitution orders, with federal cases sometimes starting around six months to a year for misdemeanors and escalating significantly for felonies.
At what dollar amount does stealing become a felony?
Here's a brief look at some states' felony theft thresholds: California: $950.
How long do embezzlement cases take?
How long does an embezzlement case take? Embezzlement cases typically take several months to over a year to resolve, depending on case complexity, court schedules, and whether the case is in state or federal court.
How is embezzlement investigated?
Many embezzlement investigations start with routine internal reviews rather than accusations of wrongdoing. Financial software may flag an entry because it differs from past patterns. A reimbursement might not include complete documentation. A transfer may be recorded later than expected or appear out of sequence.