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Criminal Charges for Breach of Fiduciary Duty
In Wisconsin, most breaches of fiduciary duty are handled in civil court. When those breaches involve deceit, theft, or abuse of power, prosecutors may pursue criminal charges. In 2025, state and federal authorities are showing greater willingness to treat certain financial misconduct and betrayals of trust not just as civil disputes, but as crimes worthy of jail time.
If you are being accused of a fiduciary breach that involves misuse of funds, public authority, or client assets, you may be facing more than financial penalties. You may be facing felony charges and need the help of a Wisconsin white collar criminal defense attorney right away.
What Is a Fiduciary and What Makes a Fiduciary Breach Criminal?
A fiduciary is someone entrusted to act in the best interests of another person or organization. The fiduciary role can exist between trustees and beneficiaries, financial advisors and clients, guardians and wards, corporate directors and shareholders, and many others. Even public officials have fiduciary duties to the people they serve. When fiduciaries act in self-interest or violate the trust placed in them, they may be liable in civil court.
Under Wisconsin law, some breaches cross into criminal territory, especially when the fiduciary misappropriates funds, hides information, falsifies records, or acts with an intent to defraud. In those cases, prosecutors may file criminal charges ranging from theft and embezzlement to official misconduct and wire fraud.
What Kinds of Criminal Charges Can Stem from a Fiduciary Breach?
Fiduciary breaches that lead to criminal prosecution usually involve one or more of the following:
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Embezzlement: Stealing funds from an account you manage or have access to as a fiduciary. This can include taking money from a trust, using company funds for personal expenses, or altering financial records to hide transfers.
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Bribery: Accepting payments or gifts in exchange for actions taken while serving in a fiduciary role, especially among elected officials or corporate officers.
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Fraud: Lying or deceiving for financial gain, such as forging documents, concealing liabilities, or misrepresenting the value of assets.
Each of these crimes is typically charged as a felony in Wisconsin, with penalties that may include multi-year prison sentences, restitution orders, professional disqualification, and permanent loss of public trust.
Wisconsin Cases Involving Criminal Fiduciary Breaches
While criminal prosecutions for breach of fiduciary duty are not as common as civil lawsuits, several high-profile Wisconsin cases have demonstrated how seriously courts can treat misconduct in these roles.
One well-known example is the conviction of a former Milwaukee alderman, who in 2008 was sentenced to over six years in federal prison for accepting bribes and extorting local businesses. The court emphasized that public corruption would not be tolerated, particularly when it involved exploiting vulnerable community members.
Another case involved a former Wisconsin state senator who in 2004 admitted to directing state funds to nonprofits in exchange for kickbacks. The state senator held a fiduciary duty to the public and breached it through self-dealing and abuse of office. He served four years in federal prison.
Even outside of public office, fiduciaries face criminal liability when they abuse their position. In the financial sector, investment brokers and financial advisors have been charged with embezzling client funds or manipulating portfolios for personal commissions. Guardians and trustees who mismanage elderly or disabled clients’ money can also face theft charges under Wisconsin Statute § 943.20.
Federal Enforcement Trends and National Examples
Wisconsin is not alone in increasing scrutiny of fiduciary misconduct. Nationally, federal prosecutors have stepped up enforcement in both financial and public corruption cases where fiduciary duties are at issue. Just this year, the former CEO of a subprime auto lending company in Illinois was sentenced to four years in federal prison for participating in fraud schemes resulting in approximately $67 million in losses.
The Department of Justice also brings criminal charges when fiduciary misconduct intersects with larger schemes, including healthcare fraud, securities violations, and elder exploitation. Because federal law often overlaps with state statutes in these areas, defendants can face prosecution in both jurisdictions.
Defending Against Criminal Fiduciary Charges
Being accused of criminal fiduciary misconduct does not mean you are guilty. Many legitimate fiduciaries make decisions in good faith that are later questioned or challenged by beneficiaries or clients. Miscommunication, misinterpretation of documents, or even economic downturns can create the appearance of wrongdoing where none exists.
A strong legal defense may focus on several points:
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Lack of intent: Most criminal charges require the prosecution to prove that you acted willfully or with intent to defraud.
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Reliance on professional advice: If you acted on the guidance of a lawyer, accountant, or other advisor, that may help establish good faith.
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Errors versus misconduct: Honest mistakes in judgment, investment strategy, or bookkeeping do not amount to criminal conduct.
A skilled criminal defense attorney can help review the facts, respond to subpoenas, negotiate with prosecutors, and protect your rights during any investigation or court proceedings.
What Should You Do If You Are Accused of Fiduciary Misconduct?
If you have received notice of an investigation, been contacted by law enforcement, or are aware of allegations of fiduciary misconduct, do not wait and do not talk to investigators without your attorney. The earlier you involve legal counsel, the more options you may have, including the possibility of resolving the matter before charges are ever filed.
Even if your case begins as a civil dispute, prosecutors may review the underlying facts for signs of criminal activity. A civil lawsuit can escalate into a criminal case quickly if investigators believe money has been stolen, misused, or concealed.
Contact a Milwaukee, WI Criminal Defense Attorney
If you are facing accusations of breach of fiduciary duty, contact a Milwaukee, WI criminal defense attorney at Gimbel, Reilly, Guerin & Brown, LLP by calling 414-271-1440 to schedule a free consultation. Our legal team understands the high stakes involved and will work to protect your reputation, your license, and your future.
