Embezzlement

The Law Offices of David Berg defends individuals and businesses facing state and federal embezzlement and misappropriation charges in Texas and nationally.

Embezzlement charges most often arise in one of two ways: an employer’s internal investigation identifies unexplained financial discrepancies and refers the matter to law enforcement, or a federal or state audit flags transactions that suggest funds were diverted. In either case, charges are typically filed well after the conduct at issue occurred, sometimes after years of investigation. By the time a person is told they are under investigation or a target, the factual record the government has assembled is already substantial.

The defense builds on that record. Understanding it completely, and where it has gaps, misattributions, or alternative explanations, is where the case starts.

What Embezzlement Charges Involve

Embezzlement is the wrongful appropriation of property by someone who was entrusted with it. It differs from ordinary theft in that the accused had lawful access to the property as an employee, trustee, officer, fiduciary, or authorized agent, and allegedly converted it for their own use or for another unauthorized purpose.

In Texas, embezzlement is prosecuted under the theft statute of the Texas Penal Code, with severity determined by the value. At the federal level, embezzlement statutes cover a range of specific contexts: federal employees and contractors, financial institutions, labor organizations, government programs, and federally funded health care programs, among others. Wire fraud and mail fraud charges are frequently added when the conduct involves electronic transfers, checks, or communications across state lines.

The breadth of federal embezzlement statutes means that conduct involving a company that receives any federal funding, does business in interstate commerce, or has federally insured deposits can be charged under federal law, even if the underlying activity was entirely local.

Situations We Handle

The firm defends individuals and companies in a range of embezzlement and misappropriation matters, including:

• Employees or executives accused of diverting company funds through unauthorized transfers, fictitious vendor schemes, or expense manipulation
• Officers and directors facing allegations of self-dealing, undisclosed related-party transactions, or diversion of corporate opportunities
• Fiduciaries (trustees, estate administrators, guardians) accused of misappropriating assets held on behalf of another
• Employees of federal contractors or federally funded organizations accused of misappropriating program funds
• Healthcare workers or administrators accused of diverting Medicare or Medicaid reimbursements for personal benefit
• Small business owners or partners accused of taking business funds without authorization by co-owners
• Individuals accused of misappropriating funds from a labor union, nonprofit, or charitable organization

How We Approach Embezzlement Defense

Embezzlement cases turn on documentation and intent. The government’s theory is built from financial records: bank statements, wire transfer records, expense reports, general ledger entries, and communications. The defense is built by examining the same record and testing whether it supports the government’s characterization.

Several distinct avenues of defense arise in embezzlement cases, depending on the facts.

Authorization is one of the most common. Employees, officers, and business owners are often accused of taking funds that they had actual or apparent authority to access or direct. Whether the authority existed, what its scope was, and whether the conduct fell within it are factual questions that the government must disprove beyond a reasonable doubt.

Intent is another. Embezzlement requires more than the act of taking. It requires the government to prove that the taking was knowing and with the intent to permanently deprive. Accounting errors, poor recordkeeping, informal business practices, and genuinely disputed ownership of funds can all be relevant to whether that intent existed.

Valuation is a third. The government’s calculation of the alleged taking determines the severity of the charges and the sentencing exposure. That calculation is often contested, whether by identifying legitimate business expenses within the characterized amount, disputing which transactions are properly included, or establishing that funds were returned or offset.

David Berg’s approach to every criminal matter is the same: build the defense as if trial is the destination, and let the strength of that preparation drive the outcome at every earlier stage.

What the Government Must Prove

In a federal or state embezzlement prosecution, the government must establish, beyond a reasonable doubt, that:

• The defendant was entrusted with or had lawful access to the property at issue as an employee, agent, fiduciary, or authorized person
• The defendant took, converted, or applied the property to their own use or an unauthorized purpose
• The taking was intentional, not accidental, authorized, or the result of a legitimate dispute about ownership or compensation
• In federal cases, the property was connected to the relevant federal jurisdiction, meaning a federal agency, a federally insured institution, a federally funded program, or interstate commerce

Each of these elements can be contested. Defense strategy is built around identifying which elements the government’s evidence does not cleanly establish and presenting a factually grounded alternative account.

What Is at Stake

Embezzlement convictions carry serious consequences. Under the Texas Penal Code, the charge ranges from a Class C misdemeanor for small amounts to a first-degree felony for takings over $300,000, with potential imprisonment of five to 99 years and fines up to $10,000. Federal sentencing under the U.S. Sentencing Guidelines considers the dollar amount taken, the defendant’s role, any breach of trust, and other factors that can drive sentences above the statutory minimum.

Beyond incarceration and fines, a conviction typically requires restitution for the full amount the government alleges was taken, often a figure vigorously contested. For professionals in licensed fields (accountants, attorneys, financial advisors, healthcare workers), a criminal conviction commonly results in license revocation or suspension. For business owners, a conviction can end the business.

Why the Timing of Your First Call Matters

Embezzlement investigations often begin internally, with an employer’s outside auditor, HR department, or counsel, before law enforcement is ever contacted. If you have been placed on administrative leave, asked to respond to financial discrepancies, or told that an internal investigation is underway, that investigation may be the precursor to a criminal referral.

Engaging counsel at that stage creates opportunities unavailable once charges are filed. Documents relevant to your defense may still be accessible. Internal investigation findings, which can be shared with prosecutors, can sometimes be influenced or contextualized before they are finalized. Decisions about voluntary cooperation, target letters, and grand jury subpoenas are easier to navigate with counsel in place before the government’s position has hardened.

If you have been contacted by law enforcement, received a target letter, or have reason to believe an internal investigation is heading toward a criminal referral, tell us about your situation.

Why David Berg

David Berg has practiced criminal defense across federal and Texas state courts for more than 50 years. The National Law Journal named him to its “Who’s Who of Criminal Defense Nationwide.” Best Lawyers in America has recognized him in White Collar Criminal Defense for decades. His full record spans federal and state courts, jury trials and bench proceedings, and matters ranging from financial crimes to the highest-profile criminal and civil cases in the country.

His commercial litigation practice means he understands the business and financial context that underlies most embezzlement allegations. When a case involves disputed fiduciary duties, contested authority to act, or accounting records that require interpretation, his background on both sides of complex financial disputes informs the defense.

Frequently Asked Questions

What is the difference between embezzlement and theft?

Theft involves taking property that the accused had no lawful right to possess. Embezzlement involves taking property that the accused was lawfully entrusted with as an employee, officer, fiduciary, or agent, and converting it to an unauthorized use. The distinction matters legally because embezzlement charges require the government to prove both lawful entrustment and unauthorized conversion, and defenses grounded in the scope of authorization are available in embezzlement cases that would not apply in a straightforward theft prosecution.

Can embezzlement be charged as both a federal and a state crime?

Yes, in many circumstances. Federal embezzlement statutes cover specific categories, including employees of federally insured institutions, federal contractors, and federally funded program administrators, and do not preempt state law. A person can face separate federal and state charges arising from the same conduct if the conduct falls within both jurisdictions. Whether federal prosecutors pursue charges depends on the amount involved, the federal connection, and prosecutorial priorities. State charges in Texas proceed independently under the Texas Penal Code.

What dollar amount triggers federal embezzlement charges?

There is no single threshold for federal prosecution. Certain federal statutes have their own minimums; for example, some federal program fraud statutes require a minimum of $5,000 in connection with a single federal program. In practice, federal prosecutors in most districts focus on matters involving hundreds of thousands of dollars or more, though cases with egregious facts or significant federal connections can be pursued at lower amounts. The applicable statute, the victim’s identity, and available prosecutorial resources all affect the decision.

Is it possible to defend an embezzlement case if some money was taken but repaid?

Repayment before or after charges are filed does not eliminate criminal liability, but it can be relevant at multiple stages of the case. In the investigation phase, evidence of voluntary repayment may influence prosecutorial charging decisions. At sentencing, repayment affects the restitution calculation and can support arguments for a reduced sentence. How the repayment occurred, when, and under what circumstances may be relevant to whether the taking was intentional or reflected an unresolved business dispute. Repayment is not a complete defense, but the facts surrounding it matter.

What happens if I am accused of embezzlement but was only following my employer’s instructions?

Following an employer’s instructions is a potentially significant defense, but its scope depends on the facts. If the conduct was specifically authorized by a supervisor or officer with the authority to do so, that authorization may negate the intent required for an embezzlement conviction. If the instructions came from someone who themselves lacked authority, such as a manager directing conduct that violated company policy or legal requirements, the analysis becomes more complex. Documenting the instructions received, the business context, and the approval chain at the time of the conduct is critical to developing this defense.

Contact the Law Offices of David Berg

Embezzlement charges carry serious consequences, and the decisions made early in an investigation have lasting effects. Tell us about your situation. Initial consultations are confidential and at no charge.