In Texas, embezzlement is typically charged as theft and involves the misappropriation or theft of funds, merchandise or valuable documents by an employee. Embezzlement can be charged as a misdemeanor or felony depending on the value of the items allegedly stolen or appropriated. Embezzlement can lead to jail time and a permanent criminal record so it is important to consult with an experienced theft defense attorney if you are under investigation or have been charged with embezzlement. 

What is the punishment for embezzlement in Texas?

Under Texas law, there is no charge called “embezzlement.” Embezzlement is treated as a form of theft and charged under Texas Penal Code 31.03. Theft involves the unlawful appropriation of “property,” which includes real property, personal property, money or valuable documents. The seriousness of a theft charge and the potential punishment is based on the value of what was stolen or appropriated. The ranges are as follows:

• A Class C misdemeanor if the value of the property stolen is less than $100;
• A Class B misdemeanor if the value of the property stolen is $100 or more but less than $750;
• A Class A misdemeanor if the value of the property stolen is $750 or more but less than $2,500;
• A state jail felony if the value of the property stolen is $2,500 or more but less than $30,000
• A felony of the third degree if the value of the property stolen is $30,000 or more but less than $150,000, or the property is:
• A felony of the second degree if the value of the property stolen is $150,000 or more but less than $300,000
• A felony of the first degree if the value of the property stolen is $300,000 or more.

What are the possible defenses to embezzlement?

Lack of Intent: Embezzlement requires proof that the accused intentionally took or misused property for their own benefit. If the defendant mistakenly handled funds or believed they had a right to use them, there is no criminal intent. Without intent to deprive, the prosecution cannot meet its burden of proving theft under Texas law.

Consent or Authority:If the owner of the property authorized the defendant to use or manage the funds in the manner alleged, then no crime occurred. Misunderstandings in business or financial arrangements often lead to embezzlement charges, especially in loosely defined roles. A clear paper trail or testimony from the owner can help establish that the defendant acted with permission.

Lack of Evidence:The prosecution must prove beyond a reasonable doubt that embezzlement occurred, and any gaps in the evidence can weaken their case. Poor record-keeping, missing documentation, or alternative explanations for financial discrepancies can create reasonable doubt. If the state cannot establish when, how, or if the defendant took the funds, an acquittal is likely.

Duress or Coercion: If the defendant was forced or threatened into committing the alleged act, they may have a valid duress defense. This applies if they reasonably believed that failing to comply would result in serious harm to themselves or others. Evidence of threats, coercion, or manipulation can undermine the prosecution’s theory of voluntary criminal intent.

Violation of Rights:If law enforcement obtained evidence through unlawful searches, interrogations, or other constitutional violations, that evidence may be suppressed. Violations of the Fourth Amendment (illegal searches and seizures) or Fifth Amendment (coerced confessions) can result in key evidence being excluded. Without admissible proof, the prosecution may struggle to prove the elements of embezzlement beyond a reasonable doubt.

When the evidence of embezzlement is strong, the best strategy may be to negotiate a favorable resolution. In the Houston area, prosecutors are sometimes willing to consider dismissing or reducing charges if the defendant can repay the alleged losses. In these cases, an effective defense attorney should develop mitigating factors, such as lack of prior criminal history, cooperation with authorities, or financial hardship that led to the offense. 

What if I am under investigation for embezzlement?

If you are under investigation for embezzlement, you should speak to an experienced Houston theft defense attorney right away. In most investigations, law enforcement will attempt to speak to you. You are never under any obligation to speak to the police and most criminal defense lawyers advise against speaking to the police. 

You should also remember that any statements that you make to your employer or a private investigator relating to an alleged embezzlement could also be used against you. An experienced embezzlement defense attorney can advise you on how best to proceed. 

How is the embezzlement or theft of trade secrets punished in Texas?

The theft of trade secrets is a crime in Texas and punished under Texas Penal Code 31.05. The theft of trade secrets includes unlawfully stealing, copying or communicating a “trade secret” which typically involves scientific or technical information or designs. The embezzlement of trade secrets is punished as a third-degree felony in Texas, punishable by 2-10 years in the Texas Department of Corrections.

How can you keep an embezzlement charge off of your record?

In Texas, there are generally two ways to protect your record against a criminal charge – an expunction and a non-disclosure (sometimes known as having your records sealed). 

An expunction is the best way to protect your record as it results in the destruction of all records relating to the arrest. However, under Texas law, you are generally only eligible for an expunction if your case is dismissed or if you are found “not guilty” at trial. If you successfully complete a deferred adjudication probation, you may be eligible to have your records “sealed” which prevents the case from appearing on many criminal history searches. 

Attorney Jose Ceja is a former prosecutor and is Board Certified in Criminal Law by the Texas Board of Legal Specialization. Mr. Ceja regularly defends clients charged with theft throughout the Houston area. If you are under investigation for theft, or have been charged, call Ceja Law Firm today for a free consultation.