MBE Rules · Criminal Law
Embezzlement
The rule
Fraudulent conversion of property of another by a person already in lawful possession. Distinguished from larceny by lawful possession at the time of conversion (e.g., trustee, agent, bailee). Mere custody (employee handling employer's till) is NOT possession — that's larceny.
In plain English
Embezzlement is when someone who already has control over someone else's property uses it in a way they're not allowed to, like stealing from a trust fund they manage.
Worked example
An accountant, who manages a client's funds, transfers money to their own account for personal use. Since they had control over the funds, it's embezzlement.
Memory hook
Embezzlement: Trust then Twist. Legal possession flips to fraud without a move.
The trap
Students think: Any employee can embezzle. Wrong, because mere custody isn't possession. The actual test is lawful possession before fraud.
How examiners test it
The MBE loves: employee has access to funds + diverts money. Trap: assuming embezzlement without possession — check if they had control, not just access.
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