Proving Embezzlement

A Virginia court addresses this issue.

Nestle v. Commonwealth of Virginia, 470 S.E.2d 133 (Va. App. 1996)

Background. A charity hired a new bookkeeper, despite its knowledge that the bookkeeper had previously been charged with writing a bad check. The charity wanted to give her a second chance. Shortly after the bookkeeper began her duties, two officers noticed problems with the books and bank deposits. They decided to conduct an internal audit. At the conclusion of the audit, the auditor reported several "substantial irregularities in the accounts." Among other things, the auditor noted that (1) the bookkeeper had written a check to herself for $250 shortly after beginning her employment that was never repaid; (2) the bookkeeper had stapled a deposit slip for $1,086 to the fund ledger account but no deposit had ever been made; and (3) the bookkeeper had issued a check to herself in the amount of $2,150.

An officer confronted the bookkeeper with these problems. When asked about the $250 check, the bookkeeper replied, "I've got that right here" and pulled the money out of a filing cabinet. She claimed that she had written the check to provide a petty cash fund, but the internal auditor was unable to find the fund in the same cabinet when he conducted his audit. When asked about the $1,086 deposit discrepancy, the bookkeeper produced the funds later that day. With regard to the $2,150 check, the bookkeeper stated that she was attempting to reimburse herself for $21.50 in travel expenses, but that the check-writing machine erroneously left out the decimal and printed the check for $2,150. The bookkeeper was later charged with embezzlement.

The court's ruling. The court noted that to prove the crime of embezzlement, the state must prove "that the accused wrongfully appropriated to her use or benefit, with the intent to deprive the owner thereof, the property entrusted to her by virtue of her employment or office." It emphasized that the intent to deprive the owner can be inferred from all the facts and circumstances of the case, and concluded that "the evidence contained in this record clearly proved beyond a reasonable doubt [the bookkeeper's] guilt of the crime of embezzlement."

What this means for churches

This case is important for the following reasons:

Negligent selection. The case illustrates the risk churches take in employing persons in a capacity involving access to funds who have a history of financial improprieties. Giving such persons a "second chance" is certainly understandable, especially for a church. Church leaders who want to employ such persons should consider positions not involving access to church funds.

The bookkeeper's defenses. The bookkeeper's attempt to "explain" the financial irregularieties that were brought to her attention, and her reimbursement of the charity for the $250 check and the undeposited funds, did not prevent her from being convicted for embezzlement. The crime had already occurred.

The clergy-penitent privilege. The court ruled that the bookkeeper could not prevent her pastor from testifying regarding statements she had made to him in the course of counseling, since under Virginia law the clergy-penitent privilege can be asserted only by clergy, and not by counselees.

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