First off I'm in the UK so I'm basing this on our laws. I'm guessing there are 2 big issues here:

First the money started in his personal account so legally it's not embezzlement if the funds did not come out of peachys bank. Convincing law enforcement to uphold an agreement between David and kick-starter about the intended use of the funds will be harder to do. It could make this a civil matter rather than a criminal one.

Secondly coming up with an agreement where he repays the money means peachy Inc has treated the "theft" as a loan and will make it legally almost impossible to now call it a theft as this amounts to a tacit agreement.


Bummed