White-collar crimes like misappropriation and embezzlement are taken very seriously by the federal government. If you have been accused of the unlawful taking and using of funds, assets or trade secrets and the alleged criminal conduct falls under the jurisdiction of the federal government, you could face life-changing penalties if you are convicted of the crime, possibly including a federal prison sentence, fines and restitution.
The best way to defense yourself against misappropriation charges and the severe penalties associated with such charges is to retain the services of a skilled criminal defense attorney with experience handling white-collar criminal cases. Our criminal defense lawyers at Federal Criminal Defense Lawyers handle all types of misappropriation cases in federal and state courts, including misappropriation of funds, misappropriation of assets and misappropriation of trade secrets, and we can develop a strong defense in your case. Regardless of the federal charges you are facing, our attorneys can provide you with the knowledgeable and dedicated legal representation you deserve, so don’t wait to call.
What is Misappropriation?
Misappropriation is a federal offense that is closely connected to embezzlement, a white-collar crime defined as the fraudulent taking of money or personal property by a person to whom that property was entrusted, usually in a business setting. Generally speaking, misappropriation involves the intentional and unlawful use of funds, assets or property for another use or for some unauthorized purpose other than its intended purpose.
Both embezzlement and misappropriation are white-collar crimes that fall under the category of financial fraud. What sets these two offenses apart from other theft crimes is the fact that individuals accused of misappropriation and/or embezzlement typically have an added degree of responsibility to care for and protect the money, property or assets they are accused of taking. For instance, the alleged offender in a federal misappropriation case may be a public official, a trustee or an executor of a deceased person’s estate.
Types of Misappropriation
There are different categories of misappropriation that can result in criminal charges and these crimes are distinguished by the type of property the alleged offender is accused of misusing:
• Misappropriation of Funds – The most common type of misappropriation is misappropriation of funds, which is the unlawful use of another person’s money without authorization. The crime of misappropriation of funds is typically committed by someone who was entrusted with the control, but not ownership, of another person, organization or entity’s money.
• Misappropriation of Assets – Misappropriation of assets is similar to misappropriation of funds in that the offense is committed by a person with the responsibility to care for and protect assets belonging to an organization or entity, such as equipment or inventory.
• Trade Secret Misappropriation – Another type of misappropriation is trade secret misappropriation, which occurs when someone improperly and without consent acquires and/or discloses a trade secret, i.e. intellectual property or confidential company information that is not generally known to the public, that has inherent economic value to the owner and that the owner takes reasonable measures to keep secret. Misappropriation of trade secrets is a form of unfair competition.
Misappropriation Charges and Penalties
While most misappropriation of funds cases are prosecuted in state court, there are certain circumstances under which allegations of misappropriation can be charged and tried in federal court. For instance, if the misappropriation case involves large sums of money, if the funds or property belonged to the federal government, or if the alleged criminal activity affects interstate commerce, the federal government may have jurisdiction over the case. The specific charge and penalties associated with federal misappropriation vary according to the circumstances of the alleged offense.
Misappropriation of Funds
There are several federal statutes related to misappropriation that prohibit the misuse or theft of public funds or government property. For instance, 18 U.S. Code § 641 prohibits individuals from embezzling, stealing or knowingly converting to their own use or the use of another, or without authorization, selling or disposing of, any money or property belonging to the federal government. 18 U.S.C. § 644 prohibits individuals who are not authorized depositaries of public funds from knowingly receiving such funds or using, transferring, converting, appropriating or applying such funds for any purpose not specified by law.
18 U.S.C. § 648 forbids custodians of public funds from loaning, using, or converting those funds, or depositing or exchanging them without authorization. 18 U.S.C. § 653 prohibits any other misuse of government funds by disbursing officers, including converting, loaning or depositing government funds without authorization, and unlawfully withdrawing, transferring or applying these funds. Finally, 18 U.S.C. § 654 forbids government employees from wrongfully converting the property of others which they receive in the course of their employment.
Trade Secret Misappropriation
Trade secret misappropriation is punishable under 18 U.S. Code § 1832 – theft of trade secrets, which carries a potential penalty of incarceration for up to 10 years. If the crime is committed by an organization, the organization can also be fined up to five million dollars, or three times the value of the stolen trade secret, plus expenses for research and design and other costs associated with reproducing the trade secret, whichever amount is greater. In cases where a trade secret has been misappropriated and the trade secret in question is “related to a product or service used in, or intended for use in, interstate or foreign commerce,” the owner of the trade secret may also be able to bring a civil action under 18 U.S. Code § 1836.
According to the federal trade secret misappropriation statute, federal criminal charges can be brought against any person who “with intent to convert a trade secret, that is related to a product or service used in or intended for use in interstate or foreign commerce, to the economic benefit of anyone other than the owner thereof, and intending or knowing that the offense will, injure any owner of that trade secret,” knowingly commits any of the following acts:
(1) steals, or without authorization appropriates, takes or conceals, or by fraud, artifice, or deception obtains such information;
(2) without authorization copies, duplicates, photographs, downloads, uploads, alters, destroys, photocopies, replicates, transmits, delivers, sends, mails, communicates, or conveys such information;
(3) receives, buys, or possesses such information, knowing that it has been stolen or appropriated, obtained, or converted without authorization;
(4) attempts to commit any offense described in paragraphs (1) through (3); or
(5) conspires with one or more other persons to commit any offense described in paragraphs (1) through (3), and one or more of such persons do any act to effect the object of the conspiracy.
Misappropriation Defense Strategies
Just because you have been accused of committing a misappropriation offense does not mean you are guilty of the crime. In order for a jury to find you guilty of misappropriation, the prosecution much prove each element of the crime beyond a reasonable doubt. For instance, if the charge is misappropriation of funds, the prosecution must show the following:
• Control but not ownership: The defendant was entrusted with the possession or control of funds belonging to another person, organization or entity, but did not have ownership of the funds,
• Intent: The defendant knowingly misappropriated the money or took an action that resulted in the misappropriation of funds, and
• Conversion: The defendant not only took the money, but also used the money for his own purposes (This can include using the money to purchase something, transferring the money to another bank account, or simply refusing to hand over the money to the rightful owner when the person demands it).
Even if you misappropriate funds with the intention of returning the money to the rightful owner at a later date, you can still be found guilty of federal misappropriation, even if the money was only taken for a short period of time.
You have a right to defend against misappropriation charges or any other criminal charge brought against you by the federal government, and there are a number of effective legal defenses a skilled federal attorney can present in a misappropriation case.
For instance, if you have been accused of misappropriating funds and the alleged misappropriation was actually a mistake or a clerical error, your attorney may argue that you did not intend to misappropriate the funds. Or, your attorney may provide evidence that you reasonably believed that you had ownership over the funds or that you were given consent by the owner to remove and use the funds.
Contact the Misappropriation Defense Attorneys at Federal Criminal Defense Lawyers
Being charged with a federal crime like misappropriation is not something that should be taken lightly. The federal government is a formidable opponent in criminal cases and federal prosecutors have the skill, incentive and resources necessary to aggressively pursue charges in cases involving misappropriation and other white-collar crimes.
If you have been arrested for a misappropriation crime or targeted by a federal misappropriation investigation, do not hesitate to hire an attorney to represent your defense. You will need a fierce legal advocate on your side if you want to beat the charges and clear your name, and our defense attorneys at Federal Criminal Defense Lawyers are prepared to be that advocate for you. Contact our firm today to schedule a free initial consultation.