Embezzlement: Why Good People Make Bad Choices

Embezzlement, the theft or misappropriation of funds entrusted to one’s care, is a crime often associated with white-collar workers, managers, or trusted employees in positions of financial responsibility. What makes embezzlement particularly complex is that it’s frequently committed by individuals with no prior criminal history—people who are well-regarded in their workplaces, families, and communities. Understanding why someone would make the choice to violate that trust requires examining psychological, social, and situational factors, as well as the pressures that can lead to such a decision.
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By exploring criminological theories and real-world scenarios, we can provide insight into how a good person might find themselves making a poor choice like embezzlement. This analysis not only helps contextualize the behavior but also identifies pathways for accountability and growth.

Criminological Theories Applied to Embezzlement

1. Strain Theory (Robert Merton, Robert Agnew)

Key Idea: Individuals turn to crime when they experience strain or pressure and feel they cannot achieve their goals through legitimate means.

• Application to Embezzlement:
  Financial strain is one of the most common motivators for embezzlement. Individuals facing mounting debt, unexpected expenses, or a perceived inability to maintain their standard of living may resort to theft as a way to resolve their financial problems.
• Example of Behavior:
  • A trusted bookkeeper with significant credit card debt begins skimming small amounts from company accounts, rationalizing that they will pay it back once their finances improve.
  • A mid-level manager, overwhelmed by medical bills, manipulates payroll records to add an extra bonus to their paycheck.

2. Rational Choice Theory (Derek Cornish and Ronald Clarke)

Key Idea: People make calculated decisions based on a cost-benefit analysis of the risks and rewards.

• Application to Embezzlement:
  Embezzlers often believe they can commit their crimes without detection, especially when they are familiar with internal controls. The perceived benefits—solving financial problems or achieving financial goals—are weighed against the risk of getting caught.
• Example of Behavior:
  • A corporate accountant rationalizes moving funds into a personal account, thinking, “I know the system better than anyone. If I do it carefully, no one will notice.”
  • A long-time employee believes they’ve earned more than their salary and decides to take from the company as a form of "just compensation."

3. Opportunity Theory (Cloward and Ohlin)

Key Idea: Crime occurs when opportunity, ability, and motive align, especially in environments where controls are weak.

• Application to Embezzlement:
  Individuals in positions of trust often have direct access to funds, coupled with the knowledge of how to manipulate financial systems. Weak oversight or a lack of auditing processes creates an environment where embezzlement feels easy and low-risk.
• Example of Behavior:
  • A nonprofit treasurer takes advantage of lax bookkeeping practices to redirect donor funds into their personal account.
  • A cashier at a small business begins pocketing cash because daily reconciliations are rarely conducted.

4. Neutralization Theory (Gresham Sykes and David Matza)

Key Idea: People justify their deviant behavior through rationalizations that minimize guilt or responsibility.

• Application to Embezzlement:
  Embezzlers often employ techniques of neutralization to reconcile their actions with their self-image as honest, good people. These rationalizations can include blaming their employer, denying harm, or framing their actions as temporary.
• Example of Behavior:
  • “This company makes millions—they’ll never notice what I took.”
  • “I’ll only take what I need to get through this tough time, and I’ll pay it back later.”
  • “They’ve been underpaying me for years; this is just evening the score.”

5. Behavioral Economics (Daniel Kahneman and Amos Tversky)

Key Idea: Cognitive biases, such as overconfidence or loss aversion, influence decision-making and lead to irrational choices.

• Application to Embezzlement:
  Loss aversion, or the fear of financial loss, can drive individuals to take desperate measures to maintain their lifestyle. Overconfidence bias can lead them to believe they can successfully embezzle without getting caught.
• Example of Behavior:
  • A financial controller begins diverting funds to cover personal expenses, believing their deep knowledge of company systems makes them untouchable.
  • A retail manager falsifies inventory records to cover a cash shortage, convinced they can manipulate the system without detection.

Additional Factors Contributing to Embezzlement

1. Financial Pressures

• Unexpected financial burdens, such as medical bills, divorce, or supporting family members, are common triggers.
• Maintaining a perceived standard of living or keeping up appearances can lead to poor financial decisions.

2. Workplace Dynamics

• Perceived Inequity: Feeling undervalued or underpaid can lead individuals to justify stealing as a way to balance perceived injustices.
• Access and Trust: Positions of trust, such as accountants, treasurers, or managers, provide both the opportunity and the means to commit embezzlement.

3. Psychological Factors

• Stress and Desperation: Anxiety about financial problems can cloud judgment and lead to impulsive or calculated acts of theft.
• Gradual Escalation: Many embezzlers start by taking small amounts, rationalizing that they will pay it back. Over time, as they avoid detection, the theft escalates.

Real-World Examples of Behavior

1. Scenario 1: The Trusted Employee A nonprofit’s bookkeeper begins writing small checks to themselves to cover personal expenses, planning to return the money before the end of the fiscal year. When no one notices the discrepancies, they continue, eventually embezzling thousands.
2. Scenario 2: The Financially Strained Manager A retail manager with mounting debt manipulates daily cash reports to pocket small amounts, rationalizing it as “borrowing” to make ends meet.
3. Scenario 3: The Disgruntled Worker An employee who feels undervalued at work begins redirecting client payments to a personal account, justifying it as compensation for being underpaid.

Pathways to Growth and Accountability

For a first-time offender charged with embezzlement, the experience can be devastating, both emotionally and professionally. However, with reflection and proactive steps, individuals can take accountability, repair the harm caused, and rebuild trust.

1. Understanding the “Why”

• Reflect on the financial, emotional, or psychological factors that led to the behavior.
• Identify specific stressors or rationalizations that influenced the decision to embezzle.

2. Taking Responsibility
3. Proactive Measures
4. Restoring Trust
5. Reframing the Experience

Final Thoughts

Embezzlement is rarely about greed or malice. For many first-time offenders, it is the result of financial strain, workplace dynamics, or poor decision-making influenced by cognitive biases or emotional pressures. While the consequences are serious, this experience can serve as a catalyst for growth and accountability.
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Through reflection, proactive measures, and a commitment to personal and professional integrity, individuals charged with embezzlement can repair the harm caused, rebuild trust, and emerge stronger from the experience. By addressing the root causes of their behavior, they can ensure that this mistake becomes a stepping stone toward a better, more responsible future.