Embezzlement is a type of fraud in which a person uses his or her position of employment to divert funds to himself or herself, through deception, from clients or from the company where he or she is employed. It is not simply a matter of stealing from one’s employer; the employee of a bulk candy store who slips a bag of jelly beans into his backpack at the end of his shift is not guilty of embezzlement. Embezzlement is more complex than that.
The Five Elements of Embezzlement
To qualify as embezzlement, a crime must involve five elements:
- The embezzler must intentionally deceive the victim (such as a client or employer).
- The embezzler violates the victim’s right to control the use of his or her property.
- The crime involves property other than land or real estate.
- It is only possible to embezzle someone else’s property, not one’s own property.
- The embezzler must have lawful possession of the property.
Jody Nelson Sentenced to Incarceration for Embezzlement
In 2006, a court in Lubbock Texas pronounced a sentence for Jonathan “Jody” Nelson, who pled guilty to embezzling millions of dollars from his employer, Patterson-UTI, which is the second largest provider of onshore oil drilling in the United States. His sentence was 25 years in prison, plus a $200,000 fine and more than 77 million dollars in restitution.
Nelson’s scheme lasted several years and resulted in him diverting many millions of dollars in company funds into his own pockets. He served, at various times, as chief financial officer, vice president, secretary, and treasurer of the company. Not only did these high-ranking positions give him unfettered access to company accounts, but they also offered generous pay, leading U.S. Attorney Richard Roper to comment on Nelson’s greed. Nelson’s fraudulent actions included the following:
- During the time of his employment at Patterson-UTI, Nelson forged 38 checks, enriching himself by more than four million dollars. He achieved the forgery by using a stamp with the signature of the company’s CEO. He made some of the checks payable to himself and some to Chisum Capital, a shell company Nelson set up for the purpose of hiding embezzled funds. To cover his tracks, he entered phony accounting records about the purpose of the checks.
- Nelson set up a shell company called XIT and submitted phony invoices from it to justify transferring company funds to it. He made 49 wire transfers, totaling more than 69 million dollars.
- Nelson spent more than two million dollars of company money to buy an aircraft for his personal use.
- He forged invoices to show that Patterson-UTI bought about $1.5 million of equipment Inter-American Oil Works, and he forged the signature of Patterson-UTI’s chief operating officer on the invoice. Instead, Nelson bought shares of Arrow Construction Company for his personal benefit.
Contact Madrid Law About Embezzlement Cases
Mario Madrid is a Texas lawyer with experience representing defendants accused of embezzlement. Contact Madrid Law in Houston for a consultation about your embezzlement case.