Both "accused of" and "charged with" are correct, but "charged with" is the more official term of the two.
"To accuse", according to the Longman Advanced American Dictionary (2001), is ""to say that you think someone is guilty of a crime or of doing something bad: [...]He's accused of murder." The correct preposition with "accuse" is "of."
To accuse someone of something, you do not have to be a member of the police force or the judicial system. For example, you could accuse your roommate of using your computer when you are out.
"To charge", according to the Longman Advanced American Dictionary, is "to state officially that someone may be guilty of a crime: [be charged with something]Her husband was charged with her murder."
The most official legal term is "indict." The same Longman dictionary states, about "indict,"
"to officially charge someone with a crime [...] Three of the men were indicted for kidnapping.
The sentence is correct with either verb:
"” He was accused OF embezzlement, found guilty, and sentenced to three years in prison
"” He was charged WITH embezzlement, found guilty, and sentenced to three years in prison
With "indict," the sentence would be
"” He was indicted FOR embezzlement, found guilty, and sentenced to three years in prison
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