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Wisconsin Embezzlement

On Behalf of | Oct 19, 2021 | Firm News

Embezzlement is the act of using a position of trust to wrongfully take possession of another’s propertyWisconsin does not explicitly name embezzlement as a crime in the statutes, but the crime is covered under theft.  Although Wisconsin does not call it “embezzlement,” the act of taking money or property by an employee is delineated under Wisconsin statute 943.20. Although prosecution and restitution may be handled as a civil matter between the business or entity that has experienced loss and the alleged person responsible for the loss, embezzlement cases are often charged criminally.

Straight theft, as defined in § 943.20(1)(a) of the Criminal Code of Wisconsin, is committed by one who intentionally (takes and carries away) (uses) (transfers) (conceals) (retains possession of) movable property of another without consent and with intent to deprive the owner permanently of possession of the property.

Employee theft, as defined in § 943.20(1)(b) of the Criminal Code of Wisconsin, is committed by one who, by virtue of his or her employment, has possession of money belonging to another and intentionally uses  the money without the owner’s consent, contrary to his or her authority, and with intent to convert it to [his or her own use] [the use of another].  Under section 943.20(1)(b), an intent to pay back the money or restore the property at a later time is not a defense even though such intent existed contemporaneously with the act of conversion.  Boyd v. State, 217 Wis. 149, 258 N.W. 330 (1935); McGeever v. State, 239 Wis. 87, 93-94, 300 N.W. 486 (1941).

The jury is under no obligation to accept direct evidence of intent furnished by the defendant, and it may infer intent from such of the defendant’s acts as objectively evidence his state of mind.  State v. Kuenzli, 208 Wis. 340, 346, 242 N.W. 147 (1932).  In Boyd v. State, supra, the supreme court said “. . . acts intentionally committed under circumstances such as to constitute a crime are not justified by the claim of innocent intent.”  Boyd, 217 Wis. at 163

A straight theft involves trespassing into a restricted area and taking valuables from another. An employee who embezzles, on the other hand, uses their legitimate access to achieve the same goal without an invasion.  The defendant accused of this offense has by definition been given consent to hold or use the property for some purpose.  It is the use beyond the scope of this consent that is the essence of this crime.  Consent to the use of property may be expressed or implied and may result from words or from conduct involving a course of dealings between the parties.  See Boyd v. State, 217 Wis. 149, 258 N.W. 330 (1935).

Embezzlement is distinct from fraud despite its similarity to fraud due to the use of a position of trust to do harm. If the prosecution can demonstrate that there was an intent to gain the position of trust in order to commit the embezzlement, then the accused may also face fraud charges. However, the embezzlement itself is not considered an act of fraud.  Attempts to mask an embezzlement can lead to further charges, especially when legally binding reports with the accused’s signature on them are altered or filled with incorrect information.

Section 971.36 sets forth a number of rules relating to the pleading and prosecution of theft cases.  Subsection (3) allows the prosecution of more than one theft as a single crime under certain circumstances:
(3)     In any case of theft involving more than one theft, all thefts may be prosecuted as a single crime if:
(a)     The property belonged to the same owner and the thefts were committed pursuant to a single intent and design or in execution of a single deceptive scheme;
(b)     The property belonged to the same owner and was stolen by a person in possession of it; or
(c)      The property belonged to more than one owner and was stolen from the same place pursuant to a single intent and design.
The material in the instruction addresses the situation defined in subsec. (3)(a):  more than one theft from the same owner, pursuant to a single intent and design.  There is no Wisconsin case law interpreting this aspect of § 971.36.  But the Committee’s conclusion that it may be dealt with most effectively as part of the value question is supported by the case law on related issues, as described below

One felony or multiple misdemeanors?

State v. Spraggin, 71 Wis.2d 604, 239 N.W.2d 297 (1976), dealt with the receipt of several articles of stolen property.  Spraggin was charged with a felony offense, based on the receipt of multiple stolen articles (valued at more than $500) at one time.  The applicable statute, § 943.34, did not have a provision like § 971.36, so the court held that lumping multiple articles together was proper only if they were received at one time.  If there were separate receipts, separate misdemeanor charges would have been required, and a felony charge could not be supported.  The case was presented to the jury as a felony, but the jury found the value of the goods received as $180.  The court entered judgment on the basis of the felony conviction, apparently relying on the prosecutor’s contention that a 25-inch color TV was worth more than $500.  The supreme court reversed, holding that, at most, two misdemeanors were committed.
The Spraggin court held that presenting the case to the jury solely as a felony “was in effect a decision on the grade of the offense, which is clearly an issue only for the jury.”  (81 Wis.2d 604, 615, citing State v. Heyroth, the case holding that finding value in a theft case is for the jury.)  The court went on to point out that there are optional ways of proceeding in a case like this:

Since variances between the allegations and the proof may be beyond the control of the state, see:  People v. Smith (1945), 26 Cal.2d 854, 161 Pac.2d 941; State v. Niehuser (Or. App. 1975), 533 Pac.2d 834; People v. Roberts (1960), 182 Cal.App.2d 431, 6 Cal. Rptr. 161, one option is to charge in the alternative.  Likewise, the defense could request, or the state on its own, could submit the alternative charges of a single or multiple receptions, when, as in cases of lesser included charges, see:  Devroy v. State (1942), 239 Wis. 466, 1 N.W.2d 875; State v. Melvin (1970), 49 Wis.2d 246, 181 N.W.2d 490, a reasonable view of the evidence reveals that there is a reasonable basis for conviction on either.  With the alternatives phrased in terms of separate or joint receptions of multiple stolen items, the jury may decide on the evidence and thereafter grade the offense through the establishment of value.  71 Wis.2d 604, 616-17.

Submitting the issue to the jury seems to be required by the Spraggin case because it goes to “the grade of the offense.”  This is consistent with the position the JI Committee has taken in similar situations in the past:  if a fact determines whether a different range of penalties applies (e.g., changes a crime from a misdemeanor to a felony or from one class of felony to another), it is for the jury; if a fact only influences the length of possible sentence within a statutory range, it is for the judge.

Embezzlement Penalties

A new category – value exceeding $100,000 – was added by 2017 Wisconsin Act 287 [effective date:  April 18. 2018].  The penalties provided in subs. (3) (a) through (cm) are as follows:

– if the value of the property does not exceed $2,500, the offense is a Class A misdemeanor;
– if the value of the property exceeds $2,500 but not $5,000, the offense is a Class I felony;
– if the value of the property exceeds $5,000 but not $10,000, the offense is a Class H felony;
– if the value of the property exceeds $10,000, the offense is a Class G felony; and,
– if the value of the property exceeds $100,000, the offense is a Class F felony.

Value is determined by the market value of the property at the time of the theft or the replacement cost, whichever is less.  See WI JI Criminal 1441.
Before you may answer “yes,” you must be satisfied beyond a reasonable doubt that the value of the property was more than the amount stated in the question.]
[In determining the value of the property stolen, you may consider all thefts that you are satisfied beyond a reasonable doubt were from the same owner and committed by the defendant pursuant to a single intent and design.].
[In determining the value of the property stolen, you may consider all thefts that you are satisfied beyond a reasonable doubt were from the same owner and committed by the defendant pursuant to a single intent and design.].
If the victim of the embezzlement is in a health care facility, then the penalty automatically begins as a Class H felony.