Defalcation


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Related to Defalcation: False token

Defalcation

The misappropriation or Embezzlement of money.

Defalcation implies that funds have in some way been mishandled, particularly where an officer or agent has breached his or her fiduciary duty. It is commonly applied to public officers who fail to account for money received by them in their official capacity, or to officers of corporations who misappropriate company funds for their own private use.

Colloquially, the term is used to mean any type of bad faith, deceit, misconduct, or dishonesty.

defalcation

v. from Latin for deduction, withholding or misappropriating funds held for another, particularly by a public official, or failing to make a proper accounting.

See: bad faith, embezzlement, misappropriation

DEFALCATION, practice, contracts. The reduction of the claim of one of the contracting parties against the other, by deducting from it a smaller claim due from the former to the latter.
     2. The law operates this reduction, in certain cases, for, if the parties die or are insolvent, the balance between them is the only claim; but if they are solvent and alive, the defendant may or may not defalcate at his choice. See Set off. For the etymology of this word, see Bracken. Law Misc. 186; 1 Rawle's R. 291; 3 Binn. R. 135.
     3. Defalcation also signifies the act of a defaulter. The bankrupt act of August 19, 1841, (now repealed), declares that a person who owes debts which have been created in consequence of a defalcation as a public officer, or as executor, administrator, guardian or trustee, or while acting in any other fiduciary capacity, shall not have the benefit of that law.

References in periodicals archive ?
In 1997, a mediator was brought in and an inquiry into the Clench Defalcation was begun.
Also, internal defalcations are often the responsibility of the internal audit section, and commercial loan fraud is the concern of the commercial loan department.
While the current economic environment and housing market conditions--both of which determine future revenue and earnings potential of title insurers--remains challenging, the company has initiated additional expense and risk management efforts, which have, to some extent, mitigated this impact as evidenced by favorable operating earnings in 2011 and year-to-date in 2012 following a significant operating loss in 2010 caused by a single material agent defalcation.
Combined with CATIC s expense and risk management efforts, these conditions have produced favorable operating earnings in 2011-2012 and year-to-date in 2013, following a significant operating loss in 2010, which was caused by a single material agent defalcation.
Defalcation and fraud claims tend to occur in good times and bad, except that investment fraud tends to be susceptible to the economy and can affect audits, reviews and valuations.
Examples of specific activities to reduce the risk of losses involving employee defalcation include hiring competent employees, controlling the access to the assets of the business, segregating the duties of employees to create checks on each other and periodic comparison of assets to the records.
With respect to demonstrating a pattern or practice of defalcation, someone demonstrates such a pattern under the regulations if they are subject to continuing legal claims arising from two or more uncured defaults alleged to have resulted in losses aggregating more than $50,000 to one or more financial institutions.
IN ADDITION TO KITE DETECTION AND robbery prevention, McGough's corporate security services cover policies, procedures, and planning; physical security; fraud investigations; defalcation (embezzling) investigations; and security training.
Le reglement etant clair, en cas de non deplacement des Saoudiens, la Palestine aura gain de match et l'adversaire risque une defalcation de points.
Other counts included in the suit are breach of fiduciary duty, breach of duty of good faith, duty of loyalty & duty of care, abuse of control, misappropriation of business opportunities, defalcation, equitable accounting, breach of oral contract, and breach of both implied in-law and in-fact contracts, and tortious interference with advantageous business relationships.
Yesterday it was exposed by one of the TV channels how Law Minister Salman Khurshid and his wife are involved in defalcation of funds meant for handicapped people.
Many companies have not kept pace in the electronic age, and control systems are often woefully inadequate, increasing the risk of defalcation of both funds and company records.