Business partner stole money, doing business behind my back

4 posts by 4 users

No avatar medium Michael McGuire
San Diego, CA
1 Post
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1 Award

Michael McGuire

from San Diego, California

Feb 12 '13, 03:32 PM

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.

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?


Medium 1398868928 avatar norris group Aaron Norris
Investor from Riverside, CA
229 Posts
107 Votes
5 Awards

Aaron Norris Verified

Investor from Riverside, California

Feb 12 '13, 03:38 PM
4 votes

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.

Medium tng webAaron Norris, The Norris Group Hard Money
E-Mail: [email protected]
Telephone: 951-780-5856

Medium 1399348055 avatar annbellamy Ann Bellamy
Hard money lender from Tyngsboro, MA
2366 Posts
1343 Votes
14 Awards

Ann Bellamy Verified

Hard money lender from Tyngsboro, Massachusetts

Feb 13 '13, 12:52 PM
1 vote

@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.

Medium small logoAnn Bellamy, Buy Now, LLC
Telephone: 800-418-0081

Medium 1399319639 avatar memphisinvest Chris Clothier
Investor from memphis, TN
1283 Posts
1062 Votes
15 Awards

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