Embezzlement
Embezzlement is not a separate offence in the Criminal Code. The conduct typically associated with embezzlement — an employee, agent, or fiduciary misappropriating funds entrusted to them — is prosecuted in Canada as theft (section 322), theft by conversion (section 336), or fraud (section 380). The choice of charge depends on the precise facts and the Crown's case theory.
Mass Tsang's criminal lawyers handle embezzlement, fraud, and theft-by-trust files across the GTA. For more, see our blog post on fraud charges in Ontario.
Theft by conversion — section 336
Section 336 makes it an offence for a person entrusted with property, under a direction to account for, deliver, or pay it over, to fraudulently convert it to their own use or someone else's. The provision targets situations where the accused had lawful possession of the property but then converted it. Conviction carries up to 14 years on indictment.
Fraud — section 380
Where the conduct involves deception, falsified records, or other dishonest means, the more typical charge is fraud under section 380. Common embezzlement scenarios — falsified expense reports, fictitious vendor invoices, payroll manipulation, unauthorized transfers — usually fit better under fraud than theft. Fraud over $5,000 carries a maximum of 14 years on indictment; fraud $5,000 or under is hybrid.
Aggravating factors
Section 380.1 lists statutory aggravating factors in fraud cases, including: the magnitude, complexity, duration, or degree of planning; the impact on the victims; the offender's failure to comply with regulatory rules; and the betrayal of trust. Position-of-trust embezzlement attracts particular sentencing scrutiny — courts emphasize denunciation and deterrence in cases involving betrayal of fiduciary or employment trust.
Defences
Defences include: colour of right (the accused believed in good faith they were entitled to the funds); lack of intent to defraud; identification issues in larger organizations where multiple people had access; accounting errors rather than misappropriation; and Charter issues with the investigation. Forensic accounting evidence is central — both Crown and defence.
Sentencing and restitution
Sentences track the amount, duration, sophistication, position of trust, and degree of restitution. Mid-six-figure thefts by fiduciaries commonly attract federal time absent strong mitigation. Restitution orders are routine. Substantial restitution before sentencing often reduces the sentence significantly.
Related glossary terms
