I’ve been asked several times recently whether a particular set of facts should be charged as embezzlement, in violation of G.S. 14-90, or as larceny by employee, in violation of G.S. 14-74. Struggling to answer those questions led me to realize that I didn’t have a good understanding of the relationship between the two offenses. I did some research, and thought I’d share it on the theory that others might be as confused as I was.
First, the basics. The embezzlement statute generally makes it illegal for several categories of people, including “any agent, consignee, clerk, bailee, or servant . . . of any person” to “[e]mbezzle,” “misapply,” or “convert,” another’s “money, goods, or other chattels.” It’s a class H felony, unless the value of the property in question is $100,000 or more, in which case, it’s a class C felony.
The larceny by employee statute generally makes it illegal for “any servant or other employee, to whom any money, goods, or other chattels” have been given by his “master,” to “go away with” the property with the intent to steal it, or to “embezzle” or “convert” them. Just like embezzlement, it’s a class H felony, unless the value of the property in question is $100,000 or more, in which case, it’s a class C felony.
With that in mind, here are a few notes about the relationship between the two:
- The offenses are very similar. As Jessie Smith noted in the current version of North Carolina Crimes, larceny by employee is “similar to embezzlement.” The essence of both crimes is the misappropriation of property that was entrusted to the perpetrator. As our supreme court has explained, the crime of embezzlement exists “to punish the misappropriation of property rightfully in the possession of the alleged wrongdoer, who . . . could not be convicted of larceny, because there was no taking from the owner’s possession by an act of trespass.” State v. McDonald, 133 N.C. 680 (1903). The crime of larceny by employee serves a similar purpose. Indeed, although no appellate decision directly compares the two crimes, the court of appeals has referred to them in a way that suggests that they are often indistinguishable. State v. Hinton, 155 N.C. App. 561 (2002) (describing the defendant’s testimony that he did not rob a cashier at knifepoint, but rather collaborated with the cashier to stage a bogus armed robbery, as admitting guilt to “aiding and abetting embezzlement or larceny by employee”). In the run of the mill case in which an employee misappropriates his employer’s property, either offense fits.
- There is no de facto standard. Although one offense or the other might be the default charge for run of the mill cases in a particular jurisdiction, statewide, the two offenses are charged about equally often. According to data from the Administrative Office of the Courts, in a recent year, Class H embezzlement was charged 4402 times, while Class C embezzlement was charged 68 times. Class H larceny by employee was charged 4259 times, while Class C larceny by employee was charged 8 times.
- Embezzlement extends beyond employees. The most significant difference between the two offenses is that while larceny by employee is limited to “servant[s] or other employee[s],” embezzlement may also be committed by those who hold public office; fiduciaries, such as executors and trustees; bailees; and others who are entrusted with property. See generally State v. Weaver, 359 N.C. 246 (2005) (“Minor substantive revisions to the [embezzlement] statute have been made over the last 130 years, most notably those expanding the class of individuals who are capable of committing the offense of embezzlement.”). So for certain fact patterns, embezzlement is the only option.
- Prosecutors can aggregate multiple takings in embezzlement cases. Case law establishes that a prosecutor may charge several related takings in separate counts of embezzlement, or aggregated together into a single count. State v. Mullaney, 129 N.C. App. 506 (1998) (Greene, J., concurring in the result, joined by Timmons-Goodson, J.) (holding that “each act of embezzlement can support a separate indictment” but that “a single embezzlement indictment [may also encompass] multiple misapplications and conversions” that are part of a series of related acts, with “[t]he choice of how to proceed [belonging to] the district attorney”). If there’s a case that extends that principle to larceny by employee, I’m not aware of it. So if controlling the aggregation of related takings is important, embezzlement is a superior choice.
The foregoing certainly doesn’t answer every possible question related to embezzlement and larceny by employee. For example, can a defendant be charged with, convicted of, and punished for both crimes based on the same conduct? Although technically there may be no double jeopardy problem under the Blockburger test, I tend to think not, because the crimes are so similar. But I’m not aware of a case on point. If there are other issues that come up regarding these two offenses, please let me know or post a comment.