What is embezzlement?

GDPR and personal data protection are both essential when going online - especially as a business that processes personal data. Read on to learn more about embezzlement and its consequences, so that you can optimise your awareness training.

Definition of embezzlement

You can also call embezzlement, a crime of wealth, and it refers to an act where a person improperly collects and appropriates funds that do not belong to them. There are several concepts within embezzlement, and an example of one is cash fraud - where trusted employees steal from a cash supply that they are otherwise responsible for.

If you look at the very official definition of embezzlement, it is a type of theft that takes place in relation to funds or items that are already in one's custody. So if someone commits embezzlement, they are fiddling the numbers and robbing someone else of a fortune or item, for example by not repaying debts, by making legitimate claims that will ultimately force the other person into court.

There are thus several ways to commit embezzlement - no distinction is made between money and property, both are equally serious.

The process behind embezzlement

Many forms of embezzlement take place in both public and private companies and for private individuals. It can involve embezzlement as well as cash fraud and other similar financial crimes. Embezzlement often occurs when a person handles a company's financial assets.

It is thus often employees working in accounting or similar positions who commit embezzlement. It can take place over a long period of time and can involve individuals or a collaboration between several parties where everyone has a financial gainfrom the embezzlement.

How is embezzlement detected?

Embezzlement is one of the more difficult criminal acts to detect, since it can be done over a longer period of time. There are various cases that have been discovered several years after a person has left a company where they would otherwise have gone undetected. The perpetrator can therefore also manage to steal very large amounts of money if the company is not paying attention to their employees - if it is someone in the accounts department who is committing embezzlement, it is even more difficult because they are the ones in charge of the finances.

Because embezzlement has become more widely known in companies, there has also been a lot more focus on it. Therefore, many companies are working on more transparency in relation to the finances of the company, so that you are not in a situation where an employee has committed embezzlement.

Some companies allow and encourage whiteblower arrangements, so that if you suspect that a colleague is using his or her position for private financial gain, you can inform your manager without consequences.

Therefore, a call to all companies - public and private - is to take the reports seriously and investigate the matter thoroughly. Otherwise, it could end up costing the company a lot of money.

How is embezzlement punished?

If a person is caught committing embezzlement, the degree of the crime will affect the course of justice and the final sentence.

A well-known example from Denmark is Britta Nielsen, who over a period of 16 years, stole €15 million because she defrauded the public purse. She ended up with a sentence of 6 years and 6 months for her criminal act

Another example is a lawyer who, over a period of one year, embezzled €85.000 which he had illegally collected. The lawyer was disbarred and sentenced to one year in prison - with 200 hours of suspended community service and two years' probation. He was also fined €3.000.

So you can see the difference in sentence if you commit embezzlement - no matter how serious - it's about the period you commit embezzlement and the amount you steal from a company.

Therefore, if you are found guilty of embezzlement, the penalty can be anything from a fine to 8 years in prison - depending on the seriousness of the crime.

Avoid embezzlement

As mentioned, transparency is an important element in avoiding embezzlement in the workplace. If everyone is transparent about their work - especially in accounting and finance - then the risk of theft is much lower.

It is also a good idea to put in place an anti-corruption strategy to ensure a solid and sustainable working environment for everyone in the workplace. It is also always a good idea to train employees on embezzlement so that everyone is aware of the phenomenon.