Cryptocurrency is a popular way to invest your money, but is it always safe? One cryptocurrency company went bankrupt in November 2022, and its CEO is now being accused of embezzlement.
FTX founder accused of white-collar crimes
The U.S. House Financial Services Committee held a hearing earlier in December on the downfall of FTX, a cryptocurrency company. Billionaire FTX founder Sam Bankman-Fried was arrested and charged with money laundering, among other federal crimes.
FTX reportedly did not keep any bookkeeping records, save for using the simple computer software QuickBooks to account for its extensive financial portfolio.
Bankman-Fried is accused of “old fashioned embezzlement.” Reportedly, he took consumer’s money to use for his own gains.
FTX went bankrupt in November. Bankman-Fried allegedly transferred billions in company funds to his own hedge fund and left his role as CEO before the company fell apart.
Did Bankman-Fried commit embezzlement?
Did Bankman-Fried commit embezzlement? That remains to be seen. Still, it is good to have a basic understanding of what embezzlement is.
Embezzlement is a white-collar financial crime. Embezzlement is committed by someone legally entrusted with company funds. This makes it different from straight-out theft.
In an embezzlement scheme, that person misuses company funds for other purposes and usually keeps some or all for their own personal gain.
Sometimes, an embezzler initially steals, takes or hides small amounts of company funds. They use these funds for unauthorized purposes or keep the funds for themselves.
The scheme goes on for months or even years, during which the embezzler misuses more and more company funds. Embezzlers can, over time, gain a large amount of money for themselves.
Embezzlement can be a felony
Embezzlement is a felony crime if it involves more than $1,000 in funds. While state law dictates the penalties for embezzlement, in general, embezzlers could face up to 10 years in prison and up to $250,000 in fines.
Embezzlers are often also charged with similar felony white collar crimes, such as money laundering. This can result in even more severe sentences.
If you are accused of embezzlement, you will need a strong criminal defense strategy to counter the charges against you.