Embezzlement is a fraud in which one or more persons betray financial trust in connection with one or more transactions. It is an entrepreneurial necessity to entrust financial responsibilities to an employee or partner by trusting their honesty. Very often, however, this trust is betrayed and money is misappropriated. The term embezzlement refers to “a form of economic crime in which a person or a company embezzles the assets entrusted to them. In this type of fraud, the embezzler legally obtains the assets and has the right to possess them, but the assets are then used for unintended purposes or, in other words, embezzled. ”

In most cases, embezzlement occurs in a professional business environment, often perpetrated by people with a high degree of authority and influence in the sector, such as CEOs, managing directors, mangers, etc. In some cases, these individuals or even employees can be falsely accused of embezzlement.

UAE laws on embezzlement:

Embezzlement can be considered a misdemeanor or felony in the UAE. However, in order to be charged, it must be proven that the property or money embezzled was not your original property. In certain circumstances, embezzlement can also be considered a fraud and is punishable by a variety of penalties depending on the severity, including: prison, fines, restitution order plus fine, etc.

Embezzlement is therefore a type of fraud in which one or more parties involved in a transaction or a series of transactions betray financial confidence. Article 404 of the Penal Code classifies embezzlement under the category of ‘breach of trust crimes’ :“A breach of trust occurs if a person“ embezzles, uses or dissipates money, documents or any other movable property with the intention of causing harm to its rights owners when such money or property has been handed over to that person by way of deposit, rent, pledge, loan for use or agency. In application of this provision, the partner in a joint property, the unauthorized agent actions regarding the principal’s property, and whoever receives anything to use in a certain manner for the benefit of its owner or for the benefit of another, shall be considered as an agent”.

A clear difference between fraud and breach of trust / embezzlement is that, an act is fraudulent if the perpetrator uses fraudulent means, whereas in the case of embezzlement, the assets that are embezzled are already entrusted to that person in his fiduciary capacity.

While proving embezzlement, the Prosecution seeks evidence to establish that the act was committed with the clear intention of deceiving and obtaining financial benefits, by examining evidence of actions such as the preparation of false invoices or receipts, the use of embezzled funds, the creation of false theft allegations to cover up embezzlement etc . The UAE penal code presumes that an accused is innocent until proven guilty and thereby, criminal penalty may not be imposed on anyone until his guilt is proved according to the law. The proof of evidence has to be clear and well established for an embezzlement charge to be proven. In the absence of clear evidence, the charges can be challenged and the accused is acquitted.