Lawful possession refers to a scenario where an individual has legal access to another person’s or entity’s assets as part of their role or duty. The nature of possession often determines whether an act is classified as embezzlement or another form of financial crime such as larceny or fraud. Embezzlement requires initial lawful possession followed by an illegal conversion of the assets.
For example: A bank cashier initially has lawful possession of funds during business operations, but if they intentionally misdirect these funds for personal use, it would be embezzlement.