defalcation embezzlement definition
Princeton's WordNet(0.00 / 0 votes)Rate this definition: 1  defalcation(noun) the sum of money that is misappropriated. 2  embezzlement, peculation, defalcation, misapplication, misappropriation(noun) the fraudulent appropriation of funds or property entrusted to your care but actually owned by someone else. defalcation(Noun) The act of cancelling part of a claim by deducting a smaller claim which the claimant owes to the defendant.