ETYM Late Lat. defalcatio: cf. French défalcation.
An abstraction of money, etc., by an officer or agent having it in trust; an embezzlement.

The fraudulent appropriation of funds or property entrusted to one's care but actually owned by someone else; SYN. peculation, defalcation, misapplication, misappropriation.
In law, theft by an employee of property entrusted to him or her by an employer.