The United Nations Office on Drugs and Crime (UNODC) says there are two financial crimes that threaten the stability of the global economy. While many use these two terms interchangeably, they are, in fact, each distinct in several ways. Understanding the differences between embezzlement and money laundering is helpful, especially if you’re a Texas business owner or have faced accusations for a financial crime.
Embezzlement and money laundering both refer to financial crimes where someone has illegally moved large amounts of money. The similarities end there, however. One of the main differences between these two financial offenses is that people who embezzle money typically had the authority to manage the funds they are misusing, while those who launder money are usually acquiring funds illegally, then filtering it through various means to take possession of it or give it to someone else.
A basic overview of embezzlement and money laundering
As stated in a previous section, embezzlement and money laundering are both financial crimes, often referred to as “white-collar crimes.” Here is a brief explanation of each:
- Embezzlement: This occurs when someone trusted with assets misuses funds for personal gain. Examples of embezzlement include employees who steal from their employers’ bank accounts or submit claims for reimbursement for work they have not done. Using a company credit card for personal expenditures also constitutes embezzlement.
- Money laundering: An individual or group who obtains money illegally (i.e., selling drugs) using so-called legitimate means (i.e., investments, crypto currency or business ownership) to funnel and conceal the funds obtained by ill-gotten means.
Embezzlement sometimes involves items as opposed to money, such as stealing equipment from work, then selling it at a profit. Both embezzlement and laundering often involve hundreds of thousands or, perhaps, millions of dollars, either in cash or value.
Facing charges for alleged financial crimes in Texas
Facing charges for embezzlement or money laundering in Texas does not necessarily mean you will incur a conviction. Both crimes (especially at the federal level) carry stiff penalties. An embezzlement conviction can send someone to jail for 10 years, while a sentence for money laundering might be double that amount of time. Penalties also often include substantial fines for tens of thousands or hundreds of thousands of dollars.
Whether you own a business in Texas, work at a bank or are employed as an accountant for a particular company, any financial transaction that appears out of the ordinary places you at risk for embezzlement or money laundering charges. Knowing your rights and choosing the right defense strategy are the keys to achieving a positive outcome in court.