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Forums » Tax, Legal Issues, Contracts, Self-Directed IRA » Business partner stole money, doing business behind my back

Business partner stole money, doing business behind my back

4 posts by 4 users

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· San Diego, California


Hi guys, what would you do in my shoes?

So my former business partner "accidentally" wrote 2 checks from the corporate account of my other brokerage business where he is not an authorized signer. The checkbook is new and there's no name/business on the checks so he thought they were his. This is how I discovered he has a side-business and account and has been making deals without my knowledge.

I literally caught him red-handed when pictures of the check showed up in my account. One of the signatures is his and one appears to be a forged replica of my own. The account he stole from is registered to my legally incorporated corporation.

The 2 checks were:
1. $xxx= Paying rent to himself from the corporate account of another broker: me
2. $x,xxx = Signed a year-long contract with a deposit using my stolen funds

Upon notifying him on his error he immediately deposited the missing money. Without any doubt, the relationship is over between me and him. However I would like to continue operating the property-management side of the business. It is lucrative and substantially profitable.

[Summary]
He is a licensed California broker and has been comingling client funds between his personal, checking, and business account. He has written 2 fraudulent checks with stolen funds of another broker (me) to 1. Enter into a 1-year lease contract and 2. Deal stolen funds to himself in the form of "rent." He is also employed by KW and has been accepting checks w/o the checks passing through KW as commission. When we started our property management business, he was not a licensed broker (only a salesperson) and was not currently employed at a brokerage. I also don't belive any of the money he collected as income has been reported to the IRS.

What exactly is he guilty of and what would you do? What kind of leverage do I have?

-Michael



Rehabber · Riverside, California


If he's doing this to you, can you imagine what he's doing to others?! I would run far, far away. It's probably only a matter of time before things get much more serious and I can't imagine you would enjoy your hard-earned reputation being commingled with his.


Small_tng_webAaron Norris, The Norris Group Hard Money
E-Mail: [email protected]
Telephone: 951-780-5856
Website: http://www.thenorrisgroup.com
The Norris Group l www.TheNorrisGroup.com


Hard Money Lender · Tyngsboro, Massachusetts


@Michael McGuire, I'd disassociate myself entirely. I've learned by experience that if two people are partners, the public assumes that what one does is ok with and endorsed by the other. You don't want to get painted with the same brush. It's not worth it, no matter how lucrative.

I also wouldn't insert myself between him, KW and the IRS. Just get out and cover your butt. If you get involved in reporting him, it will get even worse between the two of you, and will go downhill from there.


Small_small_logoAnn Bellamy, Buy Now, LLC
Telephone: 800-418-0081
Website: http://www.buynowhardmoney.com
Hard money lending in NH and MA, and for free networking in MA, http://www.BlackDiamondREI.com


Real Estate Investor · memphis, Tennessee


@Michael McGuire - I completely agree with both @Aaron Norris and @Ann Bellamy. You do not want to risk you own reputation as it is being built up and you certainly do not want to be in proximity to him when and if he gets himself into trouble.


Small_new_mi_logoChris Clothier, Memphis Invest, GP
Telephone: 901-212-9647
Website: http://www.memphisinvest.com
www.MemphisInvest.com 1(877)-773-9998 Chris D Clothier




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