What Is the Penalty for Embezzlement?

If you've been accused of or charged with embezzlement in Texas, you’ve probably got a lot of questions. Chief among them: How serious is this? What is the penalty for embezzlement? The short answer is: probably very serious. 

Embezzlement is treated as a theft offense under Texas law, and the penalties are directly tied to the value of the money or property involved. Depending on the circumstances, you could be facing anything from a Class C misdemeanor to a first-degree felony with decades in state prison.

Continue reading about exactly what those penalties look like, how the charge is classified, and what factors can make it worse — or, if you or a loved one has been charged with embezzlement, contact Turnbull Legal Group today at (832) 314-3232 to begin building your defense. 

Penalties for embezzlement charges in Texas

Because Texas prosecutes embezzlement under its general theft statute (Texas Penal Code § 31.03), penalties are tied directly to the dollar value of what was taken. The more money involved, the more serious the charge, and the more significant the consequences. The table below shows how penalties for embezzlement charges escalate in Texas:

Keep in mind that these are maximum penalties. Actual sentences will depend heavily on the facts of your case, your criminal history, and the skill of your criminal lawyer. It's also worth noting that even a state jail felony carries mandatory restitution, potential loss of professional licensure, and a felony conviction on your permanent record. 

The truth is that for amounts reaching into the hundreds of thousands of dollars (which is not uncommon in business embezzlement cases), you're looking at potential prison sentences measured in decades.

Felony embezzlement: when the stakes are much higher

The line between a misdemeanor and a felony embezzlement charge falls at $2,500. Once the alleged value crosses that threshold, you're dealing with a felony charge, and felony convictions carry consequences that extend far beyond the sentence itself. A felony on your record can affect your employment, professional licensing, housing applications, firearm rights, and more for the rest of your life.

It’s worth noting that while almost all embezzlement charges that reach the filing stage are felonies, not all felonies are made equal. The difference between a state jail felony and a first-degree felony isn’t just a matter of severity; it's the difference between a two-year sentence and a life sentence.

State jail felony ($2,500 – $29,999)

This is the entry-level felony tier for embezzlement in Texas. State jail facilities are separate from regular prisons, and sentences range from 180 days to two years. There is no parole in state jail sentences, though defendants may be eligible for community supervision. For many first-time offenders, a strong defense strategy may include pursuing deferred adjudication, which, if successfully completed, can prevent a conviction from appearing on your permanent record.

Third-degree felony ($30,000 – $149,999)

At this level, you're in Texas Department of Criminal Justice territory. Regular state prison, not state jail. A third-degree felony carries 2 to 10 years in prison. This tier often applies in employee embezzlement cases involving a sustained period of theft, like a bookkeeper skimming from accounts over several months or years.

Second-degree felony ($150,000 – $299,999)

A second-degree felony carries 2 to 20 years in prison. Cases at this level frequently involve corporate embezzlement, fiduciary breaches, or theft from nonprofit organizations. The State tends to pursue these aggressively because the dollar amounts are significant and the breach of trust is seen as an aggravating factor.

First-degree felony ($300,000 or More)

The most serious embezzlement charges in Texas fall under the first-degree felony classification. A conviction here carries 5 to 99 years in prison — or a life sentence. These cases are almost always complex, involve multiple victims or transactions, and often attract the attention of both state and federal prosecutors. If your case has crossed into federal jurisdiction, the consequences are governed by federal sentencing guidelines and can be even more severe.

Aggravating factors for embezzlement charges

The value of the property is the primary driver of how embezzlement is charged in Texas, but it is not the only factor. There are many other things that can cause a judge to enhance a charge or result in additional counts being filed. Some of these aggravating factors include:

• Victim identity: Taking money or property from an elderly person (65 or older), a nonprofit organization, or a government entity can trigger enhanced penalties under Texas law.
• Position of trust: While embezzlement inherently involves a breach of trust, cases involving fiduciaries, public officials, or financial professionals may be treated more harshly by courts.
• Multiple transactions: Prosecutors can aggregate the value of multiple theft incidents if they are part of a continuing scheme or plan. A series of smaller thefts that individually wouldn't constitute a felony can be combined to reach felony thresholds.
• Prior criminal history: A prior theft or fraud conviction can result in enhanced sentencing, even on charges that would otherwise be classified at a lower level.
• Federal jurisdiction: If the alleged embezzlement involves federal funds, crosses state lines, or involves a federally regulated institution, the case may be prosecuted at the federal level. And you may end up facing charges in both federal and state courts simultaneously.

Federal embezzlement charges: a separate and serious risk

If your case involves a federal employer, a bank insured by the FDIC, a federal program, or an employer engaged in interstate commerce, federal prosecutors may assert jurisdiction. Federal embezzlement cases are distinct from state cases in several important ways.

Federal charges often carry mandatory minimum sentences and are governed by the U.S. Sentencing Guidelines, which take into account the dollar amount of the loss, the number of victims, the defendant's role, and whether the offense involved a position of trust. Sentences in federal embezzlement cases can range from probation on the low end to 20 years or more for large-scale schemes.

Federal cases move differently than state cases, require different procedural expertise, and demand representation from an attorney with specific federal court experience. If you're facing a federal embezzlement charge, you need a Houston federal criminal defense lawyer like Ned Turnbull, rather than an attorney who only has experience at the state level.

Embezzlement elements: what the state must prove

One of the most important things to know about being charged with embezzlement (and really any crime) is that the prosecution carries the burden of proof. To obtain a conviction, the State must establish several specific elements beyond a reasonable doubt. These elements are the foundation of your defense:

• You gained access to the property because of a position of trust.
• You appropriated property belonging to another person.
• The appropriation was unlawful, meaning it was done without the owner's consent or under circumstances that made consent invalid.
• You had the intent to deprive the owner of the property.

Intent is where many embezzlement defenses are built. If the defendant genuinely believed they had authorization to use the funds, or if there is a legitimate dispute about ownership or accounting, the element of criminal intent may be difficult for the prosecution to establish. A good-faith belief that the property was yours to use (or that you had permission) is a recognized defense that is often powerful in Texas theft cases.

Embezzlement penalties FAQ

Is embezzlement a felony?

It depends on the value of what was taken. Embezzlement involving less than $2,500 is charged as a misdemeanor. Once the amount reaches $2,500 or more, the charge becomes a felony, ranging from a state jail felony at the low end to a first-degree felony for amounts exceeding $300,000. 

What is the minimum sentence for felony embezzlement?

The minimum sentence depends on the felony tier. A state jail felony carries a minimum of 180 days in a state jail facility. Third- and second-degree felonies both carry a minimum of two years in state prison. A first-degree felony carries a minimum of five years. These are just the statutory minimums. Actual sentences will vary based on the circumstances of your case and the quality of your defense attorney.

What happens to people who embezzle money?

The consequences vary widely based on the amount involved, the defendant's criminal history, and the strength of the defense. Outcomes range from fines and probation for lower-level misdemeanor charges to decades in prison for large-scale felony cases. In addition to criminal penalties, defendants often face civil liability and restitution orders requiring repayment of all funds taken.

How much money makes it a federal offense?

Federal jurisdiction over embezzlement cases isn’t determined by dollar amount alone. Federal charges apply when the offense involves federal funds, a federally insured financial institution, or a federal employer. Some federal embezzlement statutes apply regardless of the dollar amount. Once a case enters federal court, sentencing guidelines can lead to penalties of up to 20 years, even on charges that would be treated as low-to-mid-level felonies at the state level.

Can a forgery or counterfeiting charge come alongside embezzlement?

Yes, as can a fraud charge. In cases involving falsified records, forged signatures on checks, or altered financial documents, prosecutors may add forgery, counterfeiting, or fraud counts to embezzlement charges. These are distinct charges with their own statutes and nuances; if you're facing a situation that involves both, make sure you hire a felony forgery attorney to defend 

Continue reading: Fraud vs embezzlement: understanding white-collar criminal charges