Director Stole Money from Company

Brad Nakase, Attorney

Email  |  Call (888) 600-8654

Embezzlement Example

Sharon and Chris are both directors of Victory Wine, a company that manages several vineyards and sells wine in retail locations. Recently, the company accountant has approached Sharon with disturbing news. For the past three months, a large amount of money has disappeared from the business’ bank account. Sharon asks if it could be a system error. The accountant shares that there is evidence that Chris, the other director, has stolen money from the company to pay for his new yacht. Sharon does not know what to do. She wonders how best to deal with a director who steals money from his own company.

What Should Happen When a Director Is Stealing Money from Their Company?

When a ranking individual in a business, whether a director or partner, is found to be stealing money from their company, it can be a challenging scenario to confront. The person who discovers this unfortunate situation may wonder what is the best course of action to take. They may wonder what evidence to obtain, as well as how to protect their own interests in the fallout. The first step would be to keep calm and remove all emotion from the situation in order to handle it rationally and objectively. Anger or panic is a distraction that can lead to misguided actions or decisions.

Next, one should contact an experienced business and litigation attorney who can offer advice and legal assistance.

How to Obtain Evidence of a Director Stealing Company Funds

The next step would be for an individual to obtain genuine evidence of the director’s theft. First, they would have to identify the person or people involved in the scheme. It is not wise to immediately accuse a partner, co-owner, or director of stealing money from a company without first having solid, irrefutable evidence. After all, there may have simply been a mistake, such as an accounting error or a missed entry in the books. What one needs to find is a pattern of missing money.

Therefore, it would be a good idea to place controls on every account, tracking the amount going in and out at all times. One should require specific receipts for every expense regardless of size or purpose. These receipts should be printed on the sellers’ own receipt form or by automated paper receipt. They should be sure to include a detailed list of all items purchased. It would also be wise to look at withdrawals from ATMs using company debit and credit cards. If one’s business uses a cash register, then it may be a good idea to install cameras facing the drawer to see who is taking money from the register without approval.

What Are the Legal Consequences of a Director Stealing Money?

If a business associate, such as a director, is taking money from their company under a business pretext but is actually using it for personal reasons, this action would qualify as fraud. The business associate lied, and one has believed and relied upon the lie. As a result, the business has suffered damages or losses as a result of the director’s deceitful scheme. This associate may be guilty of embezzlement, which is defined as the theft of money or business assets by an individual in a position of trust within a business. The associate has also violated their fiduciary duty, which is their responsibility to protect the company in which they function as an official.

When a business associate commits the criminal offenses of embezzlement and fraud, it may be easier to remove the individual from the company and recoup any lost money or property. An attorney can offer guidance regarding whether or not to file criminal charges. A lawyer may also help to manage negotiations with the offending business partner and the attorney representing them. The victim of their fraud is entitled to recover civil financial damages as a result of the breach of fiduciary duty. It may also be possible to recover the assets or money that the director stole from the company. When the thief broke his or her fiduciary duty to the company, he or she put the business at risk. The harm to the company’s performance as well as any financial effect on its performance may add to the civil damages that can be recovered.

Can a Lawyer Help When a Director Steals Money?

When a director steals money from his or her own company, it is a very serious legal matter with high stakes. This is because there is usually a large amount of money or assets involved, and the damage to a company can be severe. Each step in the legal process should be carefully planned and put into action. To help with this, it is recommended to work with an experienced business and litigation attorney who can ensure that an individual is suitably prepared. He or she can also ensure that all the relevant laws and procedures listed in the corporate documents are followed accurately. An attorney can help an individual recover as much money as possible and has the skills and experience to help one achieve their goals.

Please tell us your story:

7 + 0 = ?

See all blogs: Business | Corporate | Employment

What Is a Gap Analysis

What is a Gap analysis?

Gap analysis helps businesses compare current performance with desired goals, identifying inefficiencies. This method aids in developing action plans to bridge performance gaps.
SWOT Analysis Example

SWOT Analysis Example

Conducting an HR SWOT analysis helps identify strengths, weaknesses, opportunities, and threats within and external to an organization. This process aids in developing strategic HR actions aligned with the company's objectives.

Costco Hot Dog Price Story

The story about Costco $1.50 hot dog price began in 1993 when the Costco merged with Price Club. Costco's $1.50 hot dog price remains unchanged in 2024.

Request for Production of Documents, RPOD, CCP 2031.280

Starting January 1, 2020, California's civil litigants face stricter discovery rules under Cal. Civ. Pro. § 2031.280(a). All produced documents must now be labeled by request number, impacting both new and ongoing cases.
What is a default judgment

What is a default judgment

A default judgment is issued when a defendant fails to respond to a lawsuit, allowing the plaintiff to win by default. Understanding this process is crucial for both parties involved in litigation.
What is a quitclaim deed

What is a quitclaim deed

Quitclaim deeds offer a quick way to transfer property ownership without guarantees, distinct from warranty deeds. Ideal for non-sale property transfers among family or into trusts, they require careful legal consideration.
Sole Proprietorship Business License

Sole Proprietorship Business License

Sole proprietorships offer simplicity and fewer formalities for new business owners, with benefits like no separate taxes. Remember, personal and business assets aren't distinct, impacting liabilities and the need for proper licensing.
What is the most important part of your business plan

What is the most important part of your business plan

The executive summary shines as the pivotal element of a business plan, serving as a decisive factor for readers to delve deeper. A comprehensive guide on crafting an impactful business plan, focusing on unique strategies and essential components.
Easy Businesses To Start

Easy Businesses To Start

Unleash your entrepreneurial spirit with these straightforward home-based business ideas, from e-commerce to creative pursuits. Embrace the flexibility and potential for financial independence with diverse options suited for various interests and investment levels.
What is the standard deduction

What is the standard deduction

Understand the IRS standard deduction, a straightforward option for reducing taxable income without needing detailed documentation. Delve into eligibility, amounts for 2023-2024, and considerations for itemizing versus standard deduction.
How to get a business license

How to get a business license

Grasp the essentials of obtaining a business license in California, focusing on local and state-level requirements. Uncover specifics on when and why different types of business licenses are needed.
Why Do Businesses Fail

Why Do Businesses Fail?

Uncover the key factors contributing to small business challenges, including financial obstacles, inadequate management, and flawed marketing strategies. Understand the role of a comprehensive business plan in ensuring long-term success.
What is a BOC 3

What is a BOC 3

Understand the essentials of a BOC-3 filing for transportation businesses in California, detailing the designation of process agents for FMCSA certification. Learn the requirements, costs, and benefits of choosing the right process agent for your business.
Standard deduction vs itemized deduction

Standard Deduction vs Itemized Deduction

Understand the key differences between standard and itemized deductions to effectively reduce your taxable income and potentially save on taxes. Choose wisely to maximize your tax benefits based on personal financial details.
How to calculate net income

How to calculate net income

Unveil the significance of calculating net income for business profitability, a key indicator for financial health and decision-making. Understand the formula and practical applications for determining net earnings.
Itemized deductions

Itemized Deductions: What they mean on a tax return

Optimize your tax return by understanding the differences between itemized and standard deductions, crucial for minimizing tax liability. Learn the benefits and challenges of itemizing to make informed financial decisions.
What are intangible assets

What Are Intangible Assets

Discover the value of intangible assets like patents and trademarks in your business, crucial for strategic and financial planning. Learn how to manage and amortize these non-physical yet essential resources.
What is accounting

What Is Accounting

Understand the importance of accounting in monitoring financial activities and making informed decisions for your business. Gain insight into accounting fundamentals and its role in legal and tax matters.
Dysfunctional family

Dysfunctional Family: Key traits and impacts

Explore the impact of growing up in a dysfunctional family, where constant conflict, neglect, and various addictions shape childhood experiences. Understand common traits, the consequences on children, and the cycle of unhealthy parenting behaviors.
When Was the Great Recession

When Was the Great Recession?

Delve into the Great Recession's timeline, an era of financial distress from December 2007 to June 2009. Understand the causes, including the 2007 housing bubble crash, and worldwide effects.
When Was the Last Recession in the US

When Was the Last Recession in the US?

Review discussions on America's most recent downturn, comparing the impacts and definitions of Covid-19 and the Great Recession. Analyze the significant effects of past economic crises on US policy and business approaches.
What to Invest in During a Recession- 4 Ideas

What to Invest in During a Recession: 4 Ideas

Uncover effective strategies for investing during a recession, assessing personal goals and current market situations. Examine four robust investment approaches to manage through economic declines effectively.
Will the US Get Hit with a Recession in 2024

Will the US Get Hit with a Recession in 2024?

Experts debate the likelihood of a 2024 US recession, analyzing factors like the yield curve and consumer confidence. Predictions vary, with a focus on interest rates and tech layoffs impacting the economy's future.
How Long Do Recessions Last

How Long Do Recessions Last?

Learn about typical US recession lengths and influencing factors, noting recent trends with shorter durations averaging 10 months. Investigate how external factors and government decisions affect recession timelines, comparing historical data.
When Will the Recession End

When Will the Recession End?

Economists predict a mild US recession with limited impact on employment and spending. The duration and impact of the recession depend on Federal Reserve policies and business cycle patterns.

See all blog: Business | Corporate | Employment

© Copyright | Nakase Law Firm (2019)