Embezzlement - Accounting Fraud

What is embezzlement?

The definition of embezzlement basically refers to the act of misusing or misappropriating money that
has been placed in your trust. The same can also apply to assets and other valuable items that have
been placed in your trust, it’s not always money. The interesting thing with embezzlement is that the
money or even assets are usually awarded your care and attention in a lawful manner. It is usually the
decision of the recipient to misappropriate the funds or assets for his own selfish gains. Embezzlement
has been known to occur at all levels. It can occur at personal levels, which involves friends, small
groups, family members and such like while in higher levels, it can occur in companies, governments,
corporate and such like categories.

Reasons and influencing factors towards embezzlement have been known to vary from one person to
another, all depending on their reasons and personal experiences. There are people who are known
to be greedy and cannot be trusted. These are usually the frequent people who misuse the funds and
assets allocated to their possession. Some people on the other hand are usually pressed by financial
constraints and they end up getting tempted to opt for the cheaper and quicker way of resolving their
financial troubles.

How embezzlement is done

Most acts of embezzlement are usually performed in small quantities and are split into small periods of
time. This is usually done so as to avoid detection and so that those involved can enjoy the embezzled
finances for a long period of time. They will usually secrete small amounts of money in a methodical
manner. On the other hand, there are some embezzlers that take advantage of a certain system lapse
and they take one lump sum amount at once and lay low forever. It all depends on the particular
situation that one is in.

How embezzlers are caught

It all depends on how one executes that particular act of embezzlement as some people have been
known to continue with the act for years and years without being detected. In most cases, the
embezzlers will make use of falsified documents in order to cover up their tracks and conceal the entire
activity. This can go on for years. The most common reported cases of embezzlement detection are
usually as a result of a deal gone bad and one of the conspirators decides to blow the whistle. However,
in some cases, it is usually detected as a result of an audit that reveals a number of missing gaps. A
follow up on the falsified documents can also reveal the intended cover up.

The consequences of embezzlement

Considering this is an illegal offense in most countries, you can be sure that it carries a hefty fine as well as a severe jail sentence. The hefty fine is usually justified by the fact that you stole a lot of money and the fine is an attempt to refund the money. The charges will usually fall under deceit, violation of trust, concealment and such like charges. The United States for instance classifies embezzlement as a federal crime as it falls under the FBI Financial Crimes.

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