Embezzlement & Employee Theft Charges in NSW

Australia doesn't charge "embezzlement" — here is what is charged instead

The word everyone searches is American. If you are accused of taking money from an employer in NSW, the charge on the court attendance notice will not say embezzlement. It will almost always be one of two things:

Crimes Act 1900 (NSW), s 156: larceny by a clerk or servant — a clerk or servant who steals property belonging to, or in the possession or power of, their master or employer. Maximum penalty: imprisonment for 10 years.

Crimes Act 1900 (NSW), s 192E: fraud — dishonestly obtaining property or a financial advantage, or causing a financial disadvantage, by deception. Maximum penalty: imprisonment for 10 years.

The practical line between them is the line between taking and deceiving. An employee who simply takes the employer's cash or stock is charged with larceny by a clerk or servant — ordinary larceny, aggravated by the employment relationship, with the maximum doubled from 5 years to 10. An employee whose taking worked through a deception — false invoices, ghost suppliers, manipulated payroll, transfers dressed up as authorised — is charged with fraud under s 192E.

For completeness: a historical offence actually named embezzlement by clerks or servants survives in s 157, covering the narrow case where an employee diverts money or property received on the employer's behalf before it ever reached the employer's possession. It also carries 10 years, and it is rarely the charge laid today. The label matters less than the structure: every version requires the prosecution to prove a dishonest taking or obtaining, and dishonesty is where these cases are fought.

Why the employment relationship raises the stakes

Courts treat dishonesty against an employer as a breach of trust, and breach of trust is a serious aggravating feature on sentence. The same dollar amount taken from a stranger and taken from an employer who relied on you are not sentenced alike. The longer the access, the greater the seniority, and the more the role depended on trust — bookkeeper, manager, signatory — the more heavily that factor weighs.

That is the hard truth. The counterweight is that these matters also offer more defensible ground than most prosecutions, because the evidence is almost entirely documentary — and documents are contestable.

The evidence: audits, access logs and the reconstruction problem

Employee dishonesty allegations almost never begin with police. They begin with a discrepancy — an audit finding, a stocktake gap, a flagged transaction — followed by an internal investigation, and only then a report to police with the file already built. The brief typically rests on:

• Audit and accounting reconstructions — which depend on assumptions about what "should" have been there, and which routinely attribute every unexplained shortfall to one person;
• System access logs and login records — which show whose credentials acted, not necessarily whose hands; shared logins, saved passwords and open terminals are everyday realities the reconstruction often ignores;
• CCTV and till records — fragments matched to rosters, with the gaps filled by inference;
• Authorisation evidence — what the employee was in fact permitted to do, which is frequently looser, more informal and more widely known about than the policies say.

The defence task is to test the reconstruction transaction by transaction: who else had access, what authorisation actually existed in practice, whether the "loss" is an accounting artefact, and whether what remains proves dishonesty by you — rather than a shortfall someone had to wear. The amount alleged at the start of these matters is frequently not the amount that survives scrutiny, and the difference matters enormously to sentence.

One practical warning: the internal interview — with HR, a manager, or an external investigator — is not a safe space. What is said there, unadvised, regularly becomes the centrepiece of the police brief. You are generally not obliged to participate. Get advice first.

Penalties and sentencing

Both s 156 and s 192E carry a maximum of 10 years' imprisonment in the District Court; matters dealt with in the Local Court carry a maximum of 2 years. Outcomes span the full range — from non-conviction orders for isolated, low-value matters with restitution, through Community Correction Orders and Intensive Correction Orders, to full-time custody for sustained, high-value breaches of trust.

What moves the sentence: the amount and whether it has been repaid, the duration of the conduct (a single lapse against a system worked for years), the degree of planning and concealment, the level of trust held, the motive — gambling, debt and family pressure are common and are treated differently from greed when genuinely addressed — and the subjective case.

Does paying the money back help?

The question every client asks first, so here is the factual position. Repayment does not undo the offence and does not prevent prosecution. An employer who has been repaid can still report the matter, and the prosecution can still proceed. But restitution is a recognised mitigating factor on sentence: courts may treat genuine, timely repayment as evidence of contrition and take it into account. How and when restitution is offered also matters — done well it assists; done badly it can read as an admission made without advice. It is a step to take with a lawyer, not before one. Every matter turns on its own facts.

Defences

• Claim of right or authorisation — an honest belief that the payment, transfer or use was permitted, drawn from how the workplace actually operated;
• No dishonesty — sloppy bookkeeping, informal borrowing arrangements and undocumented but tolerated practices are not crimes;
• Attribution — shared credentials, multiple access, and reconstructions that assume rather than prove who acted;
• Quantum — even where some conduct is admitted, the alleged total is contestable, and the difference changes the sentencing exercise.

How Lenz Legal approaches these matters

The earlier the advice, the more options exist. Before charge, the work is protective: managing the internal investigation, the interview question and any restitution discussion so that nothing is given away unadvised. After charge, the work is forensic: testing the audit reconstruction line by line, pressing the attribution and authorisation evidence, and negotiating the counts and the quantum — because in multi-transaction matters, what is ultimately admitted to is as important as whether something is admitted at all.

Where the evidence is strong, the plea is prepared properly: restitution structured on advice, the underlying drivers addressed with evidence, and a subjective case that gives the court a genuine basis for the least serious available outcome.

If your employer has raised allegations, an audit is underway, or police have made contact — get advice before any interview, workplace or police. These matters are most often damaged in the first week, not the courtroom.

Embezzlement — your questions answered