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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.

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Law Library - American Law and Legal InformationFree Legal Encyclopedia: Deed of covenant to Direct Tax