What is embezzlement?

Embezzlement is a well-known type of white collar crime. It occurs where someone in a position of trust (such as an employee) receives property on behalf of an employer and steals this property before the employer obtains possession of it. Embezzlement differs slightly to larceny (theft), where possession of the property has already passed to the employer and the employee subsequently steals it.

Examples of embezzlement include:

  • A lawyer misappropriating funds from a law firm’s trust account.Embezzlement
  • A financial adviser embezzling funds from investors.
  • A cashier keeping the cash collected at the checkout till.
  • An employee stealing business takings or goods belonging to their employer.

While embezzlement is less prevalent than some other fraud offences such as card fraud or fuel drive offs, it has a greater financial impact ($36,588 per incident as of 2014, and $67,788,305 for the year to September 2013). In a study done by the NSW Bureau of Crime Statistics and Research, embezzlement represented almost a third of the total value of fraud offences.[1] Embezzlement (and dishonesty offences generally) usually attract severe penalties, with half of embezzlement prosecutions resulting in custodial sentences.[2]


The relevant legislation

Australian state and federal legislation do not provide a direct legal definition of embezzlement. However, Part 4AA of the Crimes Act 1900 (NSW) deals with fraud offences, and section 187 notes that embezzlement is a form of “stealing.” It is treated seriously under the law, with embezzlement and larceny given their own separate heading under Division 6 of the Act. There are a wide range of fraud and deception offences in the Act, however the specific provisions on embezzlement are:

  • Section 157: Embezzlement by clerk or servant.
  • Section 160: Embezzlement by persons in the Public Service.

The Commonwealth Criminal Code does not specifically refer to embezzlement, but it also contains a raft of fraud and dishonesty offences which embezzlement could come under. An example is section 134.2(1) of the Criminal Code Act 1995 (Cth), which is the offence of obtaining a financial advantage by deception.


Prosecuting embezzlement

Under the Crimes Act, both larceny and embezzlement can be punishable by a penalty of 10 years’ imprisonment. Section 157 of the Act states:

Whosoever, being a clerk, or servant, fraudulently embezzles, either the whole or any part of, any property delivered to, received, or taken into possession by him or her, for, or in the name, or on the account of, his or her master, or employer, shall be deemed to have stolen the same, although such property was not received into the possession of such master, or employer, otherwise than by the actual possession of such clerk, or servant, and shall be liable to imprisonment for ten years.

The section makes it clear that fraud is an essential element of the offence.

For sums under $5,000, the matter will be dealt with at the Local Court. Charges involving higher sums of money are dealt with in the District or Supreme Courts.

For a defendant to be found guilty of an embezzlement charge, it is not necessary to prove that the accused committed larceny or embezzlement with respect to any specific sum of money. Under section 161, in the prosecution for larceny or embezzlement, where the charge is in respect of money, if there is proof of a general deficiency on the examination of the books of account, or entries kept or made by an individual, and the jury are satisfied that the individual stole or fraudulently embezzled the deficient money or any part of it, then the crime is proven.

In New South Wales, the maximum punishment for embezzlement is 10 years’ imprisonment, as noted above. However, penalties can vary depending on the value of funds or property embezzled, and can involve a fine, imprisonment, or both.



[1] NSW Bureau of Crime Statistics and Research: Understanding Fraud: The Nature of Fraud Offences Recorded by NSW Police. https://www.bocsar.nsw.gov.au/Publications/CJB/CJB180.pdf

[2] Judicial Commission of NSW, Sentencing Trends No 14 — Sentencing Deception Offenders Part 2 – Higher Courts https://www.judcom.nsw.gov.au/sentencing-trends-14/

Nyman Gibson Miralis provides expert advice representation in matters involving embezzlement.

Contact us if you require assistance.