White Collar Crime: Embezzlement another High Dollar Scheme

Definition of white collar crime

White collar crime refers to a crime that is committed by a person in the high rank, or a person who is highly respected and with a high social status in the society (Sutherland, 1983; Gerber & Jensen, 2006). Also, it can refer to illegal or dishonest business schemes where consumers can be cheated. Also, white collar crimes may refer to any unlawful act that is committed by officials in the private and public sector (Sutherland, 1983).

It can be fraud, swindling, theft or embezzlement. According to Lewis (2002), white collar crime is said to be committed through financial dealings. It can be described as a crime that does not cause any violence, but has an intention of gaining money. Initially, this was a crime that was assumed to have no impact in the society. The white collar crime is not only committed by people of high ranking, but it can also be committed by people from humble or divergent backgrounds.

Embezzlement is a form of white collar crime. Embezzlement includes illegal use of another person’s property which the offender was given the responsibility to manage. In this case, the offender uses the property as his or own without authority by the owner. In embezzlement, the perpetrator of the crime uses illegal means to gain undue financial benefits. Nevertheless, the individual may legally possess the property in question, but he may make use of the property in a wrong way (Geis, Pontell, & Pontell-Geis, 2007).

In-depth definition and explanation of embezzlement

Embezzlement may be fraud involving misappropriation of money, assets or any other property which one has been entrusted to manage. This is very different from swindling in that swindling refers to using false pretense or lies and cheating so as to obtain property in a wrong manner. In this case, when the transfer of ownership is done, this makes the swindler to make a transfer to the wrong person of the property. It can be done by one or more individuals who are professionals, nonprofessionals, or just people of lower ranking.

Some examples of embezzlement include lawyers who can get funds in a dishonest way from clients trust accounts. It can also include a spouse getting funds from his or her spouse in a dishonest manner. It is not mandatory for embezzlement to involve large amounts of money or property that is highly valued.

Therefore, it can involve small and large sums of money or cheap and expensive assets (Carlan, Nored & Downey, 2011). Embezzlement is normally committed in a systematic manner. In this case, the embezzler conceals whatever he or she is doing from other people. This is meant to ensure that whatever he or she does is not known to the owner of the property.

Embezzling can be underestimated in some cases, but it can be as minor as a storekeeper making wrong entries so as to benefit from the same. On the same note, it can be as major as a lawyer or a senior executive officer of large organizations making false expenses involving large sums of money. In this case, the huge sums of money are transferred to their own accounts for their own benefit. Finally, embezzlement has no age, sex or any religion.

This means that it can be committed by anyone irrespective of age, gender, race or religious affiliations. This is because one’s innocence cannot be judged from the physical appearance. In embezzlement, once this crime has been committed, one is fined depending on the scale of the crime (Cross & White, 2010). There are various elements involved in the definition of embezzlement.

Fraudulent: this is a situation whereby the perpetrator possesses another person’s property in a legal manner. However, the perpetrator, without any right to claim the property, goes a head to claim possession of the property in question and converts it for individual purpose that is far from what the property was originally meant to serve.

Conversion: embezzlement is usually committed against ownership of one’s property. This means that the owner of the property has the right to control usage of the property that has been taken. In conversion, the embezzler transfers ownership of the entrusted property by converting another person’s property to his own use.

Property: embezzlement is not limited to the scope of the crime commitment, but also it also extends to cover the amount or type of property being converted. The embezzler can convert tangible and intangible property.

Lawful possession:When converting the property, it is essential for the defendant to be legally in possession of the property in question. This is because it is not easy in determining whether the defendant had lawful possession of the property or not. In a case where the defendant had lawful possession of the property, then this can be termed as embezzlement.

The way embezzlement is committed

Embezzlement is systematic and procedural. It involves one being entrusted with certain assets/property or an amount of money, and then becoming dishonest by taking a certain amount of money or a section of the asset for his/her selfish gains. If the embezzler succeeds in the first trial, he or she continues over several years until his/her main objective has been achieved without being detected. This case can only be detected if the assets or the money that the embezzler was entrusted with is needed for use (McMillan, 2006).

Before one deals with any embezzlement case in any organization, it is very important for the owner of the property to investigate and identify that embezzlement has been committed. Embezzlement is common in day to day activities. For example, in a given organization, an employee may decide to get away with some of the company’s property without the knowledge of the other employees. It can also refer to giving wrong reports of any accrued profits or revenue from the company, or getting off with a large amount of money from the company.

Embezzlement is a delicate issue that has to be dealt with in a cautious way within the organization. If the employer is not sure on whether there is embezzlement taking place in the organization, it is important to look for the telltale signs and avoid accusing innocent employees. Some of the warning signs include warnings from the revenue authority and depletion of cash revenues within the company among others.

If the employer, or the owner of the business organization thinks that there is embezzlement taking place, or doubts an employee; then the employer should conduct a lawyer who is knowledgeable in employment laws. The lawyer is supposed to investigate the embezzlement case on behalf of the employer.

During the investigation process, everything should be secretive in such a way that the employees will not be aware of what is happening except for those affected. If there are some employees who are aware, they should be warned of confidentiality so as to avoid defamation issues.

Who commits the crime and who is affected?

The crime of embezzlement is committed by a person who has been entrusted by one’s property and makes use of the property as if it were his own to achieve his or her own purpose. He or she is referred to as an embezzler. If any embezzlement occurs, the organization from where the embezzlement has occurred is badly affected (Jennings, 2006).

Embezzlement prevention

Preventing embezzlement in an organization can take various procedures. The issue of embezzlement can be curbed in an organization by enacting laws of compulsory rotation of duties or vacations. These practices reduce the risk of embezzlement taking place. If the laws that have been endorsed are strict on embezzlement, then employees are likely to shun away from the vice. This is because they will realize that embezzlement can be easily detected and is punishable by law, and this will deter one from engaging in the vice.

Establishing a system where there is transparency and responsibility can also act to deter embezzlement. This is whereby any job that is done in the organization by employees should be checked and reviewed by other employees with similar qualifications and within the same department.

After the checking and reviewing is done, for any irregularity found, the responsible employee should be held accountable. Another way of preventing embezzlement is creating a follow-up. This is where the employees have a written book that shows what is expected of them at any given time. Every job description should be indicated together with the expected code of conduct.

Also, it is important to establish hotlines and train employees on how to use them. This improves communication within the organization to enable the swift reporting of any suspected activity. Also, the employees should know of the organizational ethics. The employees should also be made a ware of the consequences of unethical conduct. This may act as a deterrent to fraudulent activities.

Organizations can also conduct a background check up before hiring any employee in an organization to prevent embezzlement. This involves checking of the academic and employment qualifications, any criminal history of the candidate, and drug history of the candidate among others. This helps do away with the employees who have the tendency of engaging in embezzlement.

It is also important to conduct impromptu internal audit in case embezzlement has been detected in the accounts department. This is usually made known to the employees concerned with the accounts department. It may not necessarily involve hiring an experienced or a qualified auditor to assist in executing the auditing. The employees will not engage in any suspicious deals for fear that they can be got unawares.

Conclusion

There is no doubt that embezzlement is a serious problem affecting modern organizations. It has become a challenge to detect and prevent embezzlement in the society despite the various means of addressing the issue that have been discussed above. Nonetheless, the issue of embezzlement should be addressed head on, and bring the culprits to book.

Those found engaging in this practice should be dealt with accordingly even as the deterrent measures are taken. Organizations need to come out strongly and adopt measures that can reduce the occurrence of this vice.

References

Carlan, P. E., Nored, L. S., & Downey, R. A. (2011). An introduction to criminal law. Sudbury, Mass: Jones and Bartlett Publishers.

Cross, K., & White, S. (2010). Embezzlement: A true crime story. Alachua, Fla: Bridge Logos Foundation.

Geis, G. L., Pontell, H. N., & Pontell-Geis. (2007). International handbook of white-collar and corporate crime. New York, NY: Springer.

Jennings, M. (2006). Business: Its legal, ethical, and global environment. Mason, Ohio: Thomson/West.

Lewis, R. V. P. D. (2002). White collar crime and offenders: A 20-year longitudinal cohort study. Lincoln, NE: Writers Club Press.

McMillan, E. J. (2006). Policies and procedures to prevent fraud and embezzlement: Guidance, internal controls, and investigation. Hoboken N.J: John Wiley.

Sutherland, H. E. (1983). White-Collar Crime: The Uncut Version. New Haven and London: Yale University Press.