Money laundering, embezzlement, and fraud are often used interchangeably in the media. Yet, they each carry distinct legal definitions, prosecutorial strategies, and penalties. If you’re under investigation or already charged with money laundering, embezzlement, or fraud, you’re facing real consequences that could upend your freedom, reputation, and future.
At Xavier Law Firm, our criminal defense attorneys tailor our defense strategies to each case. Whether that means seeking dismissal, minimizing exposure, preserving your personal assets, or positioning for appeal down the road. If you’re facing any of these charges, the first step is to understand what sets these charges apart and how they may impact your future.
Let’s begin by untangling these three financial crimes. This guide will cover what each crime is, how they differ, and potential penalties you may be facing.
What is Embezzlement?
Embezzlement happens when someone who is trusted to handle money or property takes it for their own use. Unlike theft, where something is taken outright, embezzlement involves a breach of trust. This is usually someone like an employee, business partner, or even financial manager who is using funds in ways that were never authorized. This makes it both a financial crime and a violation of a trusted position.
Examples of Embezzlement Cases
The most common example of embezzlement cases is company payroll diversions, where an employee secretly writes unauthorized checks or diverts payroll funds into their own account.
Some high-profile embezzlement cases are:
Enron Scandal (2001): Executives misused company funds and manipulated accounting records, leading to one of the largest corporate fraud cases in U.S. history.
Bernie Madoff (2008): Although better known for his Ponzi scheme, his misuse of investor funds is a high-profile example of embezzling billions over decades.
Rita Crundwell, Dixon, Illinois (1990–2012): A city comptroller who embezzled over $50 million from her small town over more than 20 years, one of the largest municipal fraud cases ever.
Sammy Rodriguez Jr. (2025): Former general manager of Midland Mitsubishi, accused of embezzling roughly $129,146.88 from the dealership through payroll manipulation, forged checks, and misuse of company assets. His charges include a third-degree felony for theft in the amount of $30,000-$150,000
Criminal Penalties for Embezzlement Charges
The penalties for embezzlement in Texas depend heavily on how much was taken, whether the offense is elevated due to a public servant or fiduciary duty, and particular circumstances surrounding the crime.
| Offense | Amount Embezzled | Penalties |
| Misdemeanors | Up to $2,500 | Jail up to 1 year and fines up to $4,000 |
| State Jail Felony | $2,500 - $30,000 | Jail up to 2 years and fines up to $10,000 |
| Third-Degree Felony | $30,000 - $150,00 | Prison for 2 - 20 years and fines up to $10,000 |
| Second-Degree Felony | $150,000 - $300,000 | Prison for 2 - 20 years and fines up to $10,000 |
| First-Degree Felony | More than $300,000 | Prison for 5- 99 years and fines up to $10,000 |
Additional considerations:
Restitution: Courts may order repayment of stolen funds to victims.
Loss of Professional Licenses: Accountants, financial advisors, and others may permanently lose credentials.
Long-Term Impact: A conviction creates a criminal record that can close doors to future employment and business opportunities.
Aggravating Factors: Aggravating factors may result in high fines or longer sentences
What is Fraud?
Fraud involves intentionally deceiving someone to gain money, property, or services unlawfully. Unlike embezzlement, which stems from a breach of trust, fraud is deliberate misrepresentation or concealment of facts. In Texas, fraud encompasses various offenses, including credit card fraud, insurance fraud, and identity theft, each carrying distinct legal consequences.
Common Examples of Fraud
The "Gucci Goddess" Scheme (2023): Janet Mello, a financial program manager at Fort Sam Houston, embezzled nearly $109 million in federal grants, using the money to purchase homes, cars, and jewelry. She was sentenced to 15 years in federal prison.
NASA Loan Fraud (2025): Former NASA employees submitted false documents to secure mortgage loans for a luxury home; they face up to five years in federal prison and restitution.
Texas Health Care Fraud Takedown (2025): Four individuals in the Northern District of Texas were charged with health care fraud schemes totaling over $210 million, involving fraudulent billing and kickbacks.
Can I Go to Jail on Fraud Charges?
Yes. Fraud charges in Texas can lead to serious penalties, including imprisonment. The severity depends on the amount involved and specific circumstances.
| Offense | Fraud Amount | Penalties |
| Misdemeanors | Up to $2,500 | Jail up to 1 year and fines up to $4,000 |
| State Jail Felony | $2,500 - $30,000 | Jail for 180 day - 2 years and fines up to $10,000 |
| Third-Degree Felony | $30,000 - $150,00 | Prison for 2 - 10 years and fines up to $10,000 |
| Second-Degree Felony | $150,000 - $300,000 | Prison for 2 - 20 years and fines up to $10,000 |
| First-Degree Felony | More than $300,000 | Prison for 5- 99 years and fines up to $10,000 |
What is Money Laundering?
Money laundering involves the process of concealing the origins of illegally obtained money, typically by means of transfers or transactions. This makes it appear as if the money comes from a legitimate source. The goal is to hide the origin of the funds so they can be used without attracting law enforcement attention.
The Three Stages of Money Laundering
- Placement: Introducing illegal money into the financial system, often through banks, businesses, or cash deposits.
- Layering: Moving the money through multiple transactions to obscure its origin, such as transfers, shell companies, or foreign accounts.
- Integration: Reintroducing the money into the economy as apparently legitimate funds, often through investments, real estate, or business purchases.
What Happens if I’m Charged with Money Laundering in Texas?
Penalties for money laundering in Texas vary based on the amount of money involved and the specific circumstances of the offense. The potential consequences include:
| Offense | Money Laundered | Penalties |
| State Jail Felony | $2,500 - $30,000 | Jail for 180 days - 2 years and fines up to $10,000 |
| Third-Degree Felony | $30,000 - $150,00 | Prison for 2 - 10 years and fines up to $10,000 |
| Second-Degree Felony | $150,000 - $300,000 | Prison for 2 - 20 years and fines up to $10,000 |
| First-Degree Felony | More than $300,000 | Prison for 5- 99 years and fines up to $10,000 |
Why You Need an Experienced Criminal Defense Attorney
The right criminal defense attorney does far more than show up in court. At Xavier Law Firm, we dig into the details of your case, examine financial records, uncover weaknesses in the evidence, and develop strategies to reduce or even dismiss charges.
From negotiating with prosecutors to challenging how evidence was collected, we work to protect your assets, your freedom, and your reputation. Every move is carefully planned to give your case the strongest possible defense.
A skilled attorney also guides you beyond the courtroom. We explain the long-term effects of a conviction, from restitution obligations to professional licensing impacts. If appeals or post-conviction actions are needed, we’ll be there to navigate the process.
How Xavier Law Firm Can Help
At Xavier Law Firm, our white collar crime attorneys are ready to stand with you from start to finish. We investigate every angle of your case, craft a defense tailored to your situation, and fight aggressively for the best possible outcome. If you’re dealing with allegations of money laundering, embezzlement, or fraud, contact Xavier Law Firm today. Your future depends on the defense you build now.
