A Ruling with Three Lessons on Embezzlement
A Ruling with Three Lessons on Embezzlement

A New York appeals court recently affirmed a trial court ruling that “a pastor who embezzled a substantial amount of church funds” had to make restitution for those funds, said attorney and CPA Richard R. Hammar in “Pastor Who Embezzled Must Make Restitution.”

Hammar said this case is relevant to churches for three reasons:

  1. Many church leaders consider embezzlement to be a problem that “couldn’t happen here.” Yet, it is this very attitude that contributes to poor or nonexistent internal controls over cash handling and payment of expenses that makes embezzlement a real threat.
  2. Church leaders may not be discharging their fiduciary duties when they fail to implement basic internal controls over cash handling and the payment of expenses. Such a failure can result in a host of negative consequences, including criminal liability to the embezzler.
  3. The legal consequences of embezzlement can be severe. In this case, the pastor was convicted of a felony.

Read more details of this case.

For more information on embezzlement and internal controls, see the articles “How Fraud Happens in Churches” and “How to Recognize and Confront Fraud,” interviews by Bobby Ross Jr. with Nathan Salsbery, a partner and executive vice president with the accounting firm CapinCrouse.

This content is designed to provide accurate and authoritative information in regard to the subject matter covered. It is published with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional service. If legal advice or other expert assistance is required, the services of a competent professional person should be sought. "From a Declaration of Principles jointly adopted by a Committee of the American Bar Association and a Committee of Publishers and Associations."

Due to the nature of the U.S. legal system, laws and regulations constantly change. The editors encourage readers to carefully search the site for all content related to the topic of interest and consult qualified local counsel to verify the status of specific statutes, laws, regulations, and precedential court holdings.

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