Other forms: defalcating; defalcated
To defalcate is to steal or misuse money from your employer. If a cashier defalcates a few dollars each day from the register, eventually their boss is going to notice that missing cash.
To defalcate is essentially the same as to embezzle; both words describe the misuse of funds by someone who is responsible for them. A company accountant who helps himself to some extra cash each month is guilty of defalcation. If a mortgage company consolidates a customer's debt without telling them, that's another way to defalcate. The word originally meant "cut off," from the Latin falx, "sharp weapon or sickle."