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Getting scammed by my partners...

So...
My suspicions of the past few months are starting to make sense, as it's becoming clear that two of my business partners (husband and wife) are running a slow drip of money extraction from the company. Really could use a heck of an attorney that can provide the proper guidance in establishing next steps and rectifying the situation.

Of course, any personal experience in dealing with a pos business partner is welcome
as well. Thanks!
S

Last edited by Sarc; 10-11-2017 at 01:27 PM..
Old 10-10-2017, 02:22 PM
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I know plenty of attorneys that have engaged in fraud and embezzlement...

Seriously, start by trying to find a good forensic accountant.
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Old 10-10-2017, 02:33 PM
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I thought they all did...

Oh, wait - you want one who will go after someone else who is doing it.

In all seriousness, I wish you the best of luck. Sounds like a lousy situation to find yourself in.
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Old 10-10-2017, 02:39 PM
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Quote:
Originally Posted by legion View Post
Seriously, start by trying to find a good forensic accountant.
This
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Old 10-10-2017, 02:48 PM
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This happened to an ex around 18 years ago. Her business partner was taking cash and forging my ex's signature on checks. We were away when checks were signed.
What she did was go through all of the records. Once she got proof she took all the books (behind her partners back) to a forensic accountant.
In the end she got around 30-40% of the cash back. It took over a year including ending the partnership.
I wish you luck, it was pretty stressful on her.
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Old 10-10-2017, 06:50 PM
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Yes. Forensic accountant.

Probably a great business attorney first to get the crooks out of the picture.

Good luck. This is the worst.
Old 10-10-2017, 08:09 PM
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Kind of hard for someone to recommend an attorney since you're one of those people that for whatever reason doesn't list their location...
Old 10-10-2017, 08:27 PM
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Attys don't understand money and bookkeeping. That's why they are attys.

Gather evidence yourself for now. It's not rocket science and a 'forensic accountant' isn't likely necessary.

Once you have absolute proof take it to an Atty who understands partnership agreements and get some direction. You don't want to end up in court with an idiot judge (hint he too is any Atty and remember attys don't comprehend financials) telling you nothing in your partnership arrangement prohibited the actions.


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Old 10-11-2017, 01:27 AM
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Oh and my advice on pos partners is don't have one. Been there done that will not make that mistake again.


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Well i had #6 adjusted perfectly but then just before i tightened it a butterfly in Zimbabwe farted and now i have to start all over again!
I believe we all make mistakes but I will not validate your poor choices and/or perversions and subsidize the results your actions.
Old 10-11-2017, 01:28 AM
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What berettafan says plus this.

Just a regular bookkeeper or accountant should be able to establish the amount of the lost money. Do that behind the partners' back. An auditor type accountant is what you need.

Once the amount is established present the results to a lawyer. Lawyer is optional at this point.

Lawyer advises how to handle what to do.

Would suggest offering to buy the partners out. If you present your findings without a lawyer then the pos partners will deny everything. A lawyer provides an extra hammer. Lawyer or not they will likely deny everything.

If they are smart they will accept an offer to buy them out rather than you proceed with criminal proceedings. It is essential to get hard copies of their wrong doings.

If they do not accept the offer then dissolve the company and startup a new company under your name only. This I think should be a last resort option. It will be impossible to work with these pos partners once the cat is out of the bag. I foresee lots of stress but will be worth it in the end.

I am just a lay person but have been on the Board of Directors as Treasurer for our condo building for four years. Having done some accounting courses helps me understand where the money is coming and going. It is not rocket science but common sense.
Old 10-11-2017, 04:12 AM
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Quote:
Originally Posted by legion View Post
I know plenty of attorneys that have engaged in fraud and embezzlement...

Seriously, start by trying to find a good forensic accountant.
My thoughts exactly!
Old 10-11-2017, 04:43 AM
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Old 10-11-2017, 07:58 AM
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I really appreciate the good feedback. What started this effort was a single piece of paper left in the copier summarizing last week's payroll report; not only was her salary listed as 3(!!!) times the agreed amount, there were also duplicate paychecks issued to her spouse. Further digging reveals payments to the local country club and excessive amounts of reimbursables for grocery trips, gas, etc.
Thus has begun the process of making duplicate copies of the books and digital files so an independent assessment can be made. I'm fairly savvy on the financial readings, but I need a accounting ninja that can figure out the irregularities that are mascarading as standard operating procedure, so when the confrontation comes and the "these aren't the droids you're looking for" rhetoric comes out in response, I'm armed with the data that says otherwise.
Shame on me for being so trusting while I bust my a$$ building this company.

Thanks again for the input.
Old 10-11-2017, 08:00 AM
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I'm not an attorney but I've been through a legal and moral and economic nightmare with a condo.

First thing might be to scrutinize the articles of incorporation and whatever documents control the company structure. Does it say that a numerical majority such as the husband/wife/friends team can make changes to bylaws or have allowances for altering any of the initial contract terms and modify their own salaries? Anything? Even vague language? They might even have a legitimate excuse.

Sometimes, well actually a lot of times I've heard from attorneys in the family, those Articles of Incorporation are just copy/pasted from some other organization and are poorly written to begin with. Judges in a bad mood have a field day with paperwork they can't read and decipher easily and throw it all out. It needs to be spelled out or there may be grounds for "self-interpretation" cough. There are controlling local and state laws which may over-rule language. A copy of these might be on the DLEG/LARA website or other corporate registration filings if you don't already have them.

The book keeper has not notified you of this previously so I assume it's a larger organization with multiple partners.
Has the President or Board of Directors made changes without notifying you?
Is your proportional losses from the gross or net profits? (i.e. against that couple or the whole organization)
And then ask do you have a controlling interest with the authority to pursue this unilaterally?

That is the first step: First establish personal authority and quietly begin gathering your initial evidence.
If they spook and cover up their tracks with the help of others you have nothing.
They are lax right now.
An attorney might be able to put the hammer of frozen accounts and subpoenas for discovery all at once, but that is going to cost money and be a huge ruckus in the company.

Will it benefit others and the whole? Or are you alone in this? Is it worth it in the long run?
Old 10-11-2017, 08:56 AM
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You should also be considering turning this over to law enforcement or the appropriate DA. It is likely that the line of criminality has been crossed. If you start doing things on your own now you may adversely impact the ability of the DA / Fed to prosecute if they are so inclined.

My .02: if it is something that concerns you to the extent that you see civil action necessary you should also consider that the acts are likely criminal in nature. If you don't want to move forward and let it go, there is a very good chance that they will do it again if they have not already done this in the past.

Not offered as legal advice as I have no idea where you are located and I am not licensed everywhere.
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Old 10-11-2017, 10:19 AM
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my former partner bought NFL tix with company funds. it was agreed on by both of us. verbally.

you might not have quite the obvious criminal case. I'd leave cops out until you talk to an atty. was the salary in question agreed upon in writing or verbally?
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Well i had #6 adjusted perfectly but then just before i tightened it a butterfly in Zimbabwe farted and now i have to start all over again!
I believe we all make mistakes but I will not validate your poor choices and/or perversions and subsidize the results your actions.
Old 10-11-2017, 10:38 AM
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It sounds like you are doing the right thing.

I assume they have access to all the records, computers, etc.

The most important thing is to be sure you have copies of EVERYTHING, document everything, build the case as much as possible, before they find out that you have wind of what's going on.

Photocopies, computer backups onto a separate hard drive, etc.

Because if they have access, as soon as they find out they may make attempts to "clean up" or "sanitize" things.

Then, depending on how much is involved here, you probably will need to get an attorney involved. Because they have rights, you have rights under your agreements, and there will definitely need to be some legal analysis and strategy calls on how to get this handled.

For example, depending on how egregious their actions are and how much is at risk, it may be possible to get an order, without giving them any notice, locking them out, freezing their ability to get to the money, etc.
Old 10-11-2017, 11:24 AM
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These are usually very ugly cases, btw.

You'd be surprised at how "indignant" people like that can be when they are caught. They will have all sorts of justifications for what they did, and actually find ways of blaming YOU for it.
Old 10-11-2017, 11:27 AM
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Quote:
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They will have all sorts of justifications for what they did, and actually find ways of blaming YOU for it.
You hit the nail right on the head. That is their m.o. even when constructively criticized.

I have no doubt this will be an unpleasant experience. After acquiring the goods, presenting the findings to our principal (a 20 year disciple of theirs and the other senior partner) should make for an stressful experience as I suspect she won't want to take action and maintain status quo, and "I" will be the manipulative one who is to blame.
Old 10-11-2017, 01:37 PM
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^^^^probably.

Fraudsters are indignant. Management is reluctant to take action. They all are angry and it can come pointing at you.

This is a nasty place. I have experienced it more than once with clients. Yuck. Last ones killed themselves.
Old 10-11-2017, 08:47 PM
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