Embezzlement of Public Money, Property, or Records - 18 U.S.C. § 641
Embezzlement occurs when someone unlawfully takes and appropriates money, property, or other valuable items for their use or the use of another person. The federal criminal code lists numerous types of embezzlement considered federal crimes.
The United States government employs numerous people and owns a substantial amount of property. When someone embezzles or steals any property, they could face criminal prosecution for the serious federal offense of theft of government property in violation of Title 18, Section 641 of the US Code.
It's a particularly egregious offense to embezzle money, property, or records belonging to the United States government—and by extension, the public.
If you're accused of doing so, you could be charged with a felony under this statute. If convicted, you could face up to 10 years in federal prison.
18 U.S.C. 641 says, “Whoever embezzles, steals, purloins, or knowingly converts to their use or the use of another, knowing it was embezzled, or without authority, sells, conveys or disposes of any record, voucher, money, or something of to the United States or any department, any property made or being made under contract, will be fined and imprisoned up to ten years, or both.”
It's also a federal crime to receive, conceal or keep anything of value if you know it was stolen or embezzled. It's not uncommon for defendants to face several criminal counts of theft or embezzlement in a single federal case.
Embezzlement is the fraudulent appropriation of property by somebody to whom the property was entrusted. The people who have the most access to and are trusted with government property are typically federal employees.
The intent to return or pay back the government for the property is not a valid defense when charged e with an embezzlement offense. Our federal criminal defense attorneys will look at this statute below.
Overview of 18 U.S.C. 641
As noted, Title 18 U.S.C. 641 makes it a federal crime to embezzle, steal, purloin, or knowingly convert to one's use, or the use of another, anything of value belonging to the United States government. It is also a crime to "receive, conceal, or retain" government property you know to have been stolen with the intent of converting it for gain.
The statute provides for felony and misdemeanor offenses, with the penalties varying depending on the amount of money or property involved.
The scope of the types of property covered is broad under this law and may include any of the following:
- Public records or vouchers,
- Government money,
- Any other "thing of value" (i.e., government property that can be sold for gain),
- Property of any government agency,
- Property made by a third-party as contracted by the U.S. government.
What Are Some Examples of This Crime?
EXAMPLE 1: John is an accountant in a federal office that disburses federal money to healthcare establishments.
John systematically skims some money and diverts it to his accounts, doctoring the books to conceal his work. John can be charged under 18 U.S.C. 641 because he embezzles public funds.
EXAMPLE 2: Abigail works for a manufacturer of weapons parts for government contracts. Her job is to manage inventories of finished parts to be sent to other factories to be made into military weapons.
Abigail begins diverting some of the inventory and stores it in her closet to be sold on the black market. Abigail is guilty under 18 U.S.C. 641 because even though she works for a private company, the items she stole were made for the government and paid for using government funds.
EXAMPLE 3: Harold works for a HUD agency in his local community tasked with connecting low-income families with affordable housing. He swipes some valuable housing choice vouchers and asks his friend David to store them for sale later, promising him a cut of the profits. David agrees.
David and Harold can both be charged under 18 U.S.C. 641—Harold for embezzling the vouchers, and David, for knowingly concealing them.
What are the Related Offenses?
Title 18, Chapter 31 of the United States Code contains other statutes that are related to different types of federal embezzlement, such as:
- Embezzlement of tools and materials for counterfeiting purposes defined under 18 U.S.C. 642: Stealing or diverting parchment, paper, or tools that could be used to illegally stamp or print any bill, note, or stamp,
- Theft or bribery concerning programs receiving federal funds defined under 18 U.S.C. 666: Embezzling or stealing from any agency that receives at least $10,000 of federal funds within a year,
- Accounting for public money – 18 U.S.C. 643,
- Banker who receives a deposit of public money – 18 U.S.C. 644,
- Custodians who misuse public funds - 18 U.S.C. 648,
- Theft, embezzlement by a bank officer - 18 U.S.C. 656,
- Interstate or foreign shipments by carrier - 18 U.S.C. 659,
- Theft or bribery related to federal funds - 18 U.S.C. 656,
- Theft or embezzlement related to health care - 18 U.S.C. 669.
What Are the Penalties for 18 U.S.C. 641?
The penalties for violating U.S.C. 641 depend on the total value of the money or property stolen but are nonetheless severe:
- If the total value of the property stolen is $1000 or less, it's a federal misdemeanor. If convicted, you could face up to one year in federal prison and fines of up to $100,000,
- If the total value exceeds $1000, it's a felony offense. The maximum penalty if convicted is ten years in prison and a fine of up to $250,000.
What Are the Best Legal Defenses?
To convict you of this federal crime, prosecutors must prove several elements of the crime, such as:
- You knowingly took or diverted money or property belonging to the U.S. government; or
- You knowingly sold or conveyed government property without any authority to do so; or
- You concealed government property you knew had been embezzled with the intent of profiting from it.
Thus, most legal defenses against federal charges under 18 U.S.C. 641 will relate to refuting one or more of these elements, which are discussed below.
Perhaps we can argue there was a lack of intent. The prosecution must show that you willfully stole and that you intended to commit the act of embezzlement.
Maybe we can argue that you didn't know the property was stolen from the government. To be convicted of this crime, prosecutors must show that your actions were intentional.
If you stored property for sale not knowing it was government property, you can't be convicted under this law.
Likewise, if you embezzled funds from a company you work for but didn't realize they were government funds, you could still be charged with embezzlement under state law, but it wouldn't be a federal crime.
Perhaps we can argue that you were authorized to disburse the property. If the government gave you authority to sell or convey government property, you can't be convicted of embezzlement.
Negotiating with the federal prosecutor may be possible for a favorable plea bargain in cases where guilt is not in doubt.
The criminal defense law firm of Eisner Gorin LLP is located in Los Angeles, California. Contact us for an initial case review by phone or use the contact form.