When is it okay for our bank to accept or pursue restitution from bank personnel terminated for embezzlement?
Once a crime has been committed, the offender cannot ‘undo’ the offense by simply making restitution. There are two separate and interrelated legal issues to consider in a bank fraud: (a) the criminal offense and (b) restitution. Bank employees, for example, who embezzle funds can be charged in federal court with either a misdemeanor or a felony, depending on the amount of money stolen. Individuals convicted of embezzlement are regularly required to pay back the misappropriated funds to the bank - in addition to probation, prison time, and levied fines. To ensure that the swindler makes restitution, the bank can also bring a civil suit after criminal sentencing.
The real question here is whether a bank can accept or pursue restitution from an embezzler before any criminal charges have been filed or a criminal conviction has been secured. We believe that it is appropriate to seek restitution when the investigation has clearly demonstrated that the terminated employee committed the offense and the law enforcement authorities are aware of the restitution arrangements. For example, the investigation findings should include a signed confession and restitution agreement. As always, we recommend that you engage qualified legal counsel for guidance.
This Q&A originally appeared in Bankers' Hotline. For more information, sample issues, and to subscribe, click here or email bh@bankersonline.com