LeoGlossary: Embezzlement
Embezzlement is a type of financial crime in which a person misappropriates assets that have been entrusted to them. This means that the embezzler has lawful possession of the assets, but they use them for their own personal gain without the consent of the owner.
Embezzlement can occur in a variety of settings, including businesses, government agencies, and non-profit organizations. It can be committed by people at all levels of an organization, from CEOs to bookkeepers.
Embezzlers often use a variety of methods to steal money, such as:
- Forging checks or other financial documents
- Creating fake invoices or receipts
- Cooking the books to hide missing funds
- Transferring money to personal accounts
- Using company funds for personal expenses
Embezzlement can have a devastating impact on victims. It can lead to financial losses, bankruptcy, and even job loss. Embezzlement can also damage a company's reputation and make it difficult to attract investors and customers.
Here are some examples of embezzlement:
- A bank teller who steals money from customer accounts
- A bookkeeper who creates fake invoices to steal money from their employer
- A CEO who uses company funds to pay for personal expenses
- A non-profit executive who uses donated funds to pay for their own salary and benefits
Embezzlement is a serious crime that can be punished with jail time and fines.
Here are some tips to help prevent embezzlement:
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Conduct background checks on new employees, especially those who will be handling money or financial records.
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Implement internal controls, such as separation of duties and regular audits.
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Use security measures, such as locked safes and computer passwords.
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Educate employees about embezzlement and how to report it.
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