What Are the Legal Penalties for Fraud and Embezzlement Charges?
Aug. 20, 2025
Fraud and embezzlement are serious criminal offenses in the state of New York. Both crimes involve deceit and theft, and they can result in significant legal consequences, including imprisonment, fines, restitution, and a permanent criminal record.
In a legal context, fraud generally refers to the intentional deception made for personal gain or to damage another individual. Embezzlement, on the other hand, involves the misappropriation of funds or property entrusted to someone’s care.
Understanding the penalties associated with these charges is crucial for those charged with these crimes. At James Hopkins Law Firm in Syracuse, New York, we’re dedicated to being a powerful legal advocate for our clients. Here, we’ll examine penalties associated with fraud and embezzlement under New York law.
Fraud in New York
Fraud isn’t a singular crime under New York law but an umbrella term that encompasses a wide variety of offenses. These include identity theft, insurance fraud, credit card fraud, securities fraud, and welfare fraud, among others. What these offenses have in common is an intent to deceive or mislead, typically for monetary gain.
Common types of fraud include:
Identity theft (NY Penal Law § 190.78–80): Involves using someone else’s personal information (e.g., Social Security number, credit card data) to commit theft or other crimes. Penalties range from Class A misdemeanors to Class D felonies, depending on the extent of the harm and amount of money involved.
Insurance fraud (NY Penal Law § 176.05–30): includes making false claims to obtain insurance payments. Penalties vary based on the value of the fraudulent claim, with first-degree insurance fraud being a Class B felony (if the amount exceeds $1 million).
Securities fraud: Includes misleading investors or manipulating financial markets. Often prosecuted under both state and federal law, with severe consequences including prison time and significant fines.
Welfare fraud (NY Penal Law § 158.00–158.60): Includes the fraudulent receipt of public benefits. Degrees of severity range from fifth-degree (misdemeanor) to first-degree (Class B felony).
Tax fraud (NY Tax Law § 1800 et seq.): Includes filing false tax returns or evading state taxes. This is punishable with both criminal and civil penalties.
In New York, fraud is a broad category of offenses, including identity theft, insurance fraud, securities fraud, welfare fraud, and tax fraud. Each type involves intentional deception for monetary gain and carries penalties ranging from misdemeanors to severe felonies, depending on the nature and extent of the fraud.
Embezzlement in New York
Embezzlement is a form of theft that involves someone unlawfully taking money or property that was entrusted to them, usually in a professional or fiduciary setting. In New York, there’s no separate statute specifically labeled “embezzlement.” Instead, it’s prosecuted under the broader theft or larceny laws found in New York Penal Law Article 155.
Embezzlement cases are typically charged based on the value of the property stolen, under the categories of petit or grand larceny:
Petit larceny (NY Penal Law § 155.25): Theft of property valued at less than $1,000. Classified as a Class A misdemeanor, punishable by up to 1 year in jail.
Grand larceny (NY Penal Law §§ 155.30–155.42): Divided into four degrees based on the amount stolen:
Fourth-degree (Class E felony): Over $1,000.
Third-degree (Class D felony): Over $3,000.
Second-degree (Class C felony): Over $50,000.
First-degree (Class B felony): Over $1 million.
In New York, embezzlement is prosecuted under broader larceny laws. Charges vary from petit larceny (misdemeanor, under $1,000) to grand larceny (felonies, ranging from over $1,000 to over $1 million), with penalties increasing based on the value of the stolen property.
Penalties for Fraud and Embezzlement in New York
The penalties for fraud and embezzlement vary depending on the offense's nature, the amount of money or property involved, the defendant's criminal history, and any aggravating factors like targeting the elderly or vulnerable. Misdemeanors, such as petit larceny or fifth-degree welfare fraud, can result in up to one year in jail, fines up to $1,000, and possible probation.
Felonies, including grand larceny and first-degree identity theft, carry more severe consequences. These can range from one to 25 years of imprisonment, fines potentially up to double the illegal gain or a statutory maximum, and restitution to the victim(s).
Specific sentencing guidelines for felonies are as follows: a Class E Felony can result in 1.5 to 4 years in prison, a Class D Felony in 2 to 7 years, a Class C Felony in 3.5 to 15 years, and a Class B Felony in 5 to 25 years.
Judges have the discretion to impose concurrent or consecutive sentences if multiple offenses are involved. In cases where the defendant is a first-time offender, courts may consider alternatives to incarceration, such as probation, community service, or participation in diversion programs..
Additional Legal Consequences
Beyond incarceration and fines, a conviction for fraud or embezzlement carries several collateral consequences. One significant consequence is restitution, where courts often require the defendant to repay the victim for any financial losses incurred due to the crime. Failing to pay restitution can lead to extended probation or additional penalties.
Another potential consequence is the forfeiture of assets, meaning the government may seize assets believed to be connected to or derived from the criminal activity. Professional consequences are also common and can include the loss of professional licenses for individuals in fields such as law, accounting, or healthcare.
Conviction can also lead to ineligibility for certain jobs, particularly those involving finance, trust, or security, and the revocation of certifications.
For non-citizens, fraud and embezzlement can have severe immigration consequences, as these crimes may be classified as crimes involving moral turpitude (CIMT), potentially leading to deportation or denial of naturalization. Lastly, victims may pursue civil lawsuits for damages, and state agencies can impose additional civil fines.
Defending Against Fraud and Embezzlement Charges
Defense strategies depend on the facts of each case. Common defenses include:
Lack of intent: Arguing the act was a mistake or lacked criminal intent.
Duress or coercion: The defendant was forced to commit the act under threat.
Insufficient evidence: Prosecutors failed to prove all elements of the crime.
Consent: The alleged victim consented to the transfer or use of funds.
Entrapment: Law enforcement induced the crime unlawfully.
Early intervention by an experienced criminal defense attorney can significantly improve the chances of a favorable outcome, whether by negotiating a plea deal, reducing charges, or securing a dismissal.
The Prosecution Process
The legal process for fraud and embezzlement charges in New York generally involves several stages. It often begins with an investigation, which may be initiated by internal audits, whistleblower tips, or government agencies. During this phase, law enforcement might conduct surveillance, subpoena records, or interview witnesses.
Following the investigation, an arrest is made based on probable cause, and charges are formally brought, either by indictment in felony cases or information in misdemeanors.
Next is the arraignment and bail hearing, where the defendant is informed of the charges and enters a plea. At this point, bail may be set, or the defendant might be released on their own recognizance.
The pre-trial proceedings involve motions, discovery, and plea negotiations. If the case proceeds to trial, the prosecution must prove guilt beyond a reasonable doubt. Finally, if convicted, the judge determines the penalty during sentencing, based on guidelines, pre-sentencing reports, and victim impact statements.
Preventive Measures and Compliance
For organizations and professionals, the best defense against embezzlement and fraud is prevention. Recommended measures include the segregation of financial duties, regular internal and external audits, ethical training for employees, whistleblower protection policies, and enhanced cybersecurity protocols.
Fraud and embezzlement charges in New York are taken very seriously, and the legal consequences can be life-altering. Depending on the severity of the offense and the amount of money involved, penalties can range from a short jail sentence to decades in prison, along with heavy fines, restitution, and long-term damage to one’s reputation and career.
Contact Us Today
Anyone accused of fraud or embezzlement should seek competent legal counsel immediately. Our experienced attorney, James Hopkins, will advocate for you if you’re facing criminal charges. We serve clients in Syracuse, Cicero, Baldwinsville, Rome, Utica, Rochester, Oswego, Watertown, and the surrounding areas of Northern and Central New York. Contact our firm today.