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Fraud/Corporate Theft

Fraud comes in many forms. There are investment frauds, like Madoff, who are simply building pyramid schemes. There is failure to provide material information related to the sale of shares in a company. There are corporate officers, corporate founders, and even low level employees improperly using Company resources for personal expenses. When there are multiple shareholders this can be particularly troubling, as it effectively takes from one shareholder and gives to another without a similar or pro-rata distribution.

These issues often come up when the company runs out of money and people start to review bank statements and credit cards to see where money was spent. Attorney Nick Heimlich can work with you to assess the damage and help find ways to try to recoup your Company's losses.

Don't hesitate. These types of cases can be particularly challenging because companies do not realize that theft from an insider has occurred until the money has run out. Attorney Nick Heimlich finds it particularly rewarding when he has the opportunity help to put a Company back into a position of providing jobs and continuing to exist.

One of the key ways that a business can try to spot or minimize this type of fraud is to have an independent CPA or an audit of the company’s financials. It is critical that all shareholders believe that the CPA or auditor is truly independent and making a thorough examination because if parties do not trust the CPA or that the CPA is being thorough, then much of the value will be lost.

Another simple, but over overlooked way of finding this fraud is to limit the people who can write checks, issue payments or have company credit cards. Generally speaking, very few credit cards should be issued by small businesses as they often become a simple blank check used for everyday non-business items like gas, groceries, sporting tickets (without a client), alcohol, travel expenses, daily coffee (without meeting any client), and meals. Further, even if a credit card has been issued, someone other than the one issued the card should review each month’s statements and demand cash receipts and a business explanation for all charges. If documentation is not provided, then the card should be cancelled.

Payroll and employee compensation is also something that should be checked carefully. Payroll payments should be checked against employment agreements or offer letters. If Employees are getting paid more, then someone should ask if there were raises or some other valid explanation for the difference.

Many successful businesses can fail solely due to mismanagement of funds because the business is supporting the personal lifestyle of owners in a way that is not related to their salary or in a way to maximize business profitability.