Maybe you borrowed some company funds, fully intending to pay them back. Or perhaps you used the organization’s credit card for personal expenses during a tough month, planning to sort it out later. Now you’re facing possible embezzlement charges, and that temporary financial solution has become your worst nightmare.

The reality? Even the best intentions don’t prevent criminal charges. Let’s break down exactly what constitutes embezzlement in Texas and what you need to know if you’re facing accusations.

A Quick Note About Texas Law and Embezzlement

Before we dive into prevention, here’s what you need to know: Under Texas law, embezzlement isn’t a separate crime—it’s prosecuted as theft under Section 31.02 of the Texas Penal Code.

When someone in a position of trust misuses funds or property they had legal access to, they can face theft charges with enhanced penalties based on both the amount taken and their position of trust.

The legal elements that must be proven in Texas are as follows:

1. You unlawfully appropriated property
2. You had the intent to deprive the owner of that property
3. The appropriation was without the owner’s effective consent

The severity of the charges depends on the value of the property taken:

• Less than $2,500: Class A misdemeanor
• $2,500 to $30,000: State jail felony
• $30,000 to $150,000: Third-degree felony
• $150,000 to $300,000: Second-degree felony
• $300,000 or more: First-degree felony

If you’re a public servant or in a contractual relationship with the government, the offense is increased to the next higher category. This means what would normally be a state jail felony becomes a third-degree felony, and so on.

Red Flags: Are You at Risk for Charges of Embezzlement in Texas?

Recognizing risky situations early can help you avoid criminal charges down the road. Here are the warning signs to watch for based on your role and situation.

Corporate Financial Position Red Flags

If you handle company funds, watch for these warning signs:

• You’ve started using company accounts as a temporary “safety valve” for personal expenses
• You’re making undocumented transfers between accounts
• You’ve delayed recording transactions or deposits
• You’re using company cards for personal expenses, even if you plan to pay them back
• Your personal and business accounts have become intermingled

“What often happens is there’s a mixing of personal money and business money,” explains Graham Norris, founder of Norris Legal Group. “They dip into that money that should be designated for commercial purposes or money that is sitting there. It can be a safety valve for somebody, such as unexpected medical expenses or a difficult family situation.”

Non-Profit Treasurer/Board Member Warning Signs

Volunteer positions can be especially tricky. Be alert if:

• You’re using organizational funds with plans to replace them later
• You’ve started treating the organization’s account as a revolving loan fund
• Documentation of expenses is becoming loose or informal
• You’re making decisions about fund use without proper authorization

“I represented a person who was previously in law enforcement and who was a treasurer for a nonprofit,” Graham says. “He had a gambling addiction and was using that money and would pay it back. Even though he replaced all the money that had been taken, the unauthorized use of the money as a loan or for personal use was an offense.”

The good news: Graham was able to help him avoid jail time.

Small Business Red Flags

Are you handling finances in a small business? Here are some signs you’re entering dangerous territory:

• Personal and business expenses are becoming hard to separate
• You’re using business funds for personal expenses without clear documentation
• You’ve started taking “loans” from business accounts
• Financial records are becoming unclear or incomplete

“If you’ve got any questions about whether business practices are legal – such as if there’s unaccounted-for funds or maybe you got money you weren’t sure you were supposed to get – that’s a red flag. That means somewhere down the line you could get accused of doing that wrongfully.”

If you recognize any of these warning signs in your own situation, don’t wait for accusations to surface. Contact an experienced defense attorney who can help you understand your risks and take steps to protect yourself.

What Not to Do If Suspected of Embezzlement in Texas

One thing you don’t want to do is discuss the situation with anyone, including trying to justify it if confronted.

“Sometimes there’s a reputation and relationship at play in a business setting, and if they’re confronted a lot of times individuals feel the need to give justification or to make up an excuse, and either one can make it worse,” Graham says.

He warns that statements made during company investigations or to law enforcement can be used against you in court of law. This means you should avoid:

• Making explanations or excuses to your employer
• Attempting to “fix” the situation without legal counsel
• Discussing the case with coworkers
• Speaking to investigators without an attorney present

What To Do Instead

If you’re facing potential embezzlement charges, your first step should be to contact an attorney. Your lawyer can help gather and preserve important evidence, including financial records and communications that could be vital to your defense.

Protecting Yourself: Essential Documentation and Financial Controls

If you’ve recognized any red flags in your situation, implementing strict financial controls and documentation practices isn’t just good business — it’s legal protection. Here’s how to protect yourself:

Essential Documentation Practices

Documentation is vital both for preventing accusations in the first place and defending yourself should they arise:

• Keep detailed records of every financial transaction
• Document all authorizations for fund transfers or expenses in writing
• Maintain clear separation between personal and business accounts
• Save email threads or other communications about financial decisions
• Keep receipts and written explanations for any unusual expenses
• Record dates, amounts, and purposes for all transactions

Financial Controls to Implement Today

If you handle money for any organization:

• Get written policies about what expenses are authorized
• Establish clear approval processes for all expenditures
• Document any deviations from standard procedures
• Keep a log of all conversations about financial decisions
• Get secondary signatures or approvals for large transactions

When Mixing Personal and Business Funds

If you must mix personal and business finances in any way:

• Document the reason for each crossover
• Create a formal repayment plan in writing
• Get appropriate authorizations beforehand
• Keep meticulous records of all repayments
• Maintain clear timeline documentation
• Consider having a third party review the arrangement

Digital Protection

Also remember to:

• Save screenshots of online banking transactions
• Keep backup copies of all financial records
• Document online approval processes
• Save relevant text messages or emails about finances
• Maintain secure but accessible digital archives

Remember: The time to implement these controls is before there’s any question about your handling of funds.

Don’t Wait Until It’s Too Late

Reading through these red flags and documentation requirements, you might have a sinking feeling that you’ve already crossed a line. Maybe you’ve been “borrowing” from company accounts, mixing personal and business expenses, or using organizational funds as a temporary safety net.

Don’t let fear paralyze you into inaction. At Norris Legal Group, we’ve helped numerous clients navigate their way out of potentially criminal situations before they escalated to formal charges. Our initial consultation is completely confidential, and we can help you understand:

• Whether your current practices put you at legal risk
• What documentation you need to protect yourself
• How to clean up any questionable financial situations
• Steps to take if you’re already under suspicion

Take control of your situation today. Call Norris Legal Group for a confidential consultation, or fill out our secure online contact form. The sooner you reach out, the more options we’ll have to protect your future. Remember – the call is free, but waiting too long could cost you everything.