1. What Criminal Breach of Trust Means under New York Law
New York has no law literally called "criminal breach of trust." What it does have is an embezzlement statute that covers exactly this situation: when someone entrusted with another person's money or property deliberately misuses it.
The Legal Charge Behind It
Under N.Y. Penal Law § 155.05(2)(a), this conduct is prosecuted as larceny by embezzlement. In plain terms: "larceny" is New York's umbrella term for theft offenses, and "embezzlement" is the specific form that applies when the person who stole had legitimate access to the money in the first place. The crime is not taking something you were never supposed to touch. It is betraying the trust that gave you access.
How This Differs from a Civil Dispute
The dividing line between civil and criminal is intent. A trustee who makes poor investment decisions may face a civil breach of trust lawsuit brought by the beneficiaries. A trustee who secretly moves estate funds into a personal account faces a criminal indictment. The civil case is about recovering the money. The criminal case is about punishment.
2. The Five Elements the Prosecution Must Prove
A criminal conviction requires the prosecution to prove all five elements below beyond a reasonable doubt, meaning there is no other reasonable explanation for what happened. If any single element is missing, the charge fails. This is also where defense attorneys look first.
A Fiduciary Relationship
The defendant must have occupied a recognized position of trust. A "fiduciary" is someone with a legal duty to act in another person's financial interest, not their own. Trustees, executors, attorneys, financial advisors, and corporate officers typically qualify. Informal arrangements with no formal appointment or written agreement often do not.
Lawful Access to the Property
This is what distinguishes embezzlement from ordinary theft. The prosecution must show the defendant was authorized to handle the funds or assets before misusing them. The crime lies not in how access was gained, but in how it was abused.
Intentional Misappropriation
The defendant must have used the property outside the scope of what they were permitted to do. Accounting errors, genuinely authorized disbursements, and good-faith mistakes do not meet this element.
Fraudulent Intent
This is the element most often contested at trial. The prosecution must prove the defendant knew they were acting without authorization and intended to permanently deprive the owner of the property. Negligence, even severe negligence, is not enough. Courts call this "mens rea," a Latin term meaning "guilty mind": the wrongful act must have been paired with a wrongful intent.
Actual Financial Loss
New York larceny requires proof that real property was actually taken or withheld. The value of that loss matters beyond just proving the crime: it directly determines how serious the charge is and what sentence the defendant faces.
3. Who Qualifies As a Fiduciary under New York Law
Courts do not treat every financial relationship as a fiduciary one. What matters is whether the defendant genuinely held discretionary authority over someone else's property. Access alone, or a general sense of trust between two people, is not enough.
Positions That Typically Qualify
The following consistently meet the standard under New York law:
- Trustees and executors named under a will or trust agreement
- Corporate officers and directors with financial signing authority
- Attorneys holding client funds in an IOLA account (a separate account attorneys are legally required to maintain for client money)
- Licensed investment advisors managing accounts on a discretionary basis
- Court-appointed guardians overseeing a ward's estate
Positions That Often Fall Short
Informal family arrangements without a written agreement, independent contractors without authority over funds, and co-owners with equal legal rights to shared property generally do not give rise to criminal fiduciary liability. When employment is involved, the relevant charge is typically employee embezzlement, which raises separate questions about what the employee was actually authorized to do.
4. Penalties under New York Law
The possible sentence depends almost entirely on how much money was taken. New York grades the offense by dollar value, and that classification is fixed by statute regardless of the defendant's role or personal circumstances.
Sentencing by Value Taken
| Value taken | Charge | Classification | Maximum prison term |
| Under $1,000 | Petit Larceny | Class A misdemeanor | 1 year |
| $1,000 to $3,000 | Grand Larceny, 4th degree | Class E felony | 4 years |
| $3,000 to $50,000 | Grand Larceny, 3rd degree | Class D felony | 7 years |
| $50,000 to $1,000,000 | Grand Larceny, 2nd degree | Class C felony | 15 years |
| Over $1,000,000 | Grand Larceny, 1st degree | Class B felony | 25 years |
N.Y. Penal Law §§ 155.25, 155.30, 155.35, 155.40, 155.42
Beyond the Prison Sentence
A conviction typically triggers a restitution order, meaning the court directs the defendant to repay what was taken. That order runs separately from any civil lawsuit the victim may pursue; paying restitution does not settle a breach of fiduciary duty claim. Professionally, the consequences can be permanent: attorneys lose bar membership, financial advisors lose their licenses, and anyone holding a court appointment loses it. For more on sentencing ranges by degree, see our grand larceny page.
5. Defending against Criminal Breach of Trust Charges
Every defense strategy starts with the same question: which of the five elements above is hardest for the prosecution to prove? That answer shapes everything that follow
Challenging Whether a Fiduciary Duty Existed
If the defendant had no formal fiduciary role or no clear authority over the property, the foundational element of the charge fails. This comes up most often in family estate disputes and loosely run businesses where authority was assumed rather than formally established.
Arguing Lack of Criminal Intent
Because the prosecution must prove specific fraudulent intent, evidence that the defendant genuinely believed they were authorized can defeat the charge. Prior written instructions from the beneficiary, a documented course of similar transactions, or explicit consent all support this defense. Written communications and transaction records are often the most important evidence in this type of case.
Authorization and Consent
If the beneficiary or property owner approved the transaction, the criminal element is gone even if the financial outcome was harmful. A trustee who made an unusual payment at the beneficiary's direct request is in a different legal position than one who acted without any authorization at all.
Forensic Accounting
Prosecutors sometimes charge based on incomplete or misread financial records. An independent audit can reframe what looks like deliberate theft as an accounting error, a misclassified disbursement, or a timing issue in fund transfers. Getting the numbers right early can change the direction of the case.
6. Frequently Asked Questions
Is criminal breach of trust the same as embezzlement in New York?
Functionally, yes. New York does not use "criminal breach of trust" as a legal term. The conduct is charged as larceny by embezzlement under N.Y. Penal Law § 155.05(2)(a), and the elements are the same: a fiduciary with legitimate access who intentionally takes or withholds property without authorization.
Can a civil case and a criminal case run at the same time?
Yes. The criminal case seeks punishment through incarceration and fines. The civil case seeks financial recovery for the victim. They proceed on separate tracks, and a criminal conviction does not satisfy or replace a civil claim.
What if the defendant believed they had permission to use the funds?
Good-faith belief in authorization is a recognized defense to the intent element. It needs to be credible and supported by evidence: written instructions, prior consent, or a clear pattern of similar approved transactions. A vague sense that the funds were "available" rarely holds up without something concrete behind it.
15 Jul, 2025
