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How can you separate compensation for services from embezzlement?

On Behalf of | Aug 31, 2020 | White Collar Crimes |

Working in any sort of role that involves asset or property management brings with it a great responsibility to execute those duties in such a way as to avoid the appearance of any impropriety. Oftentimes accusations of impropriety arise over the compensation you may receive (or feel entitled to receive) for such work.

It is perfectly reasonable for you to collect fees for your services, yet those rights (and your collection methods) should be clearly defined to your business partners. If not, you could find yourself accused of embezzlement.

Defining embezzlement

Per the U.S. Department of Justice, embezzlement occurs when you fraudulently appropriate funds or property that one has entrusted to you. Technically this may include any situation where you allocate assets to a channel other than that which the owner of the property anticipates, yet in most cases, such action is only viewed as criminal when that appropriation occurs primarily for your own personal benefit.

Such is where the importance arises for you clearly defining your compensation structure. If your client is not aware of the specific mechanisms of how you receive compensation for your financial services, they may claim you deliberately intended to deprive them of property for your own gain.

Establishing intent

It is establishing such an intent where prosecutors make a case for embezzlement. Without it, you can simply show that you were acting in good faith. Intent only arises if you purposefully attempt to take what is not due to you. Compensation for services does not fall into this category (as you are within your rights to receive payment for work rendered). One way to avoid accusations of embezzlement stemming from compensation may be to separate your payment from the channels through which you manage a client’s assets (requiring instead that they pay you separately).

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