Hi everyone.  I am new to Bigger Pockets, but I was hoping you might have some advice for me...  I have a situation where I recently fired my PM in Arizona, because she was taking advantage of the fact that we live in another state from the property and stealing rent money from us.  Now since the contract is cancelled, according to our PM Agreement she needs to turn the tenants security deposit over to us the owners. But, the problem is that security deposit check she sent me was actually made out payable to the tenants  as well as me!  Now in order for me to deposit the check in the bank I actually need the endorsement of the tenants as well! 

If this was another PM I might assume that maybe there was a mistake made, but this woman has really exhibited some bizarre and underhanded behavior for awhile now. I've even have suspicions that she is actually living in the property herself. (I came to this conclusion because I received violation notices from the property's HOA regarding tenants parking violations with pictures of what appeared to be her vehicle parked in the driveway!) She regularly makes excuses for the tenants whether it's showing up to defend them to the HOA, making excuses for their late rent (they had id theft, laid up in the hospital, the check got lost in the mail etc.), and not charging them the late fees as agreed on in the contract.

  The security deposit check written in their names is further proof that if if she is not actually living in the house that someone very close to her is and she is cutting them deal after deal at our expense.  Now, my concern is that she may actually have converted the trust money for her own use and may not have the funds available.  Do any of you have any advice about how best to handle this? What should I do about this check? What are my options legally if we do find that she has been living in the house and undermining and stealing from us instead of upholding her fiduciary responsibilities?  Thanks for the help all. I really appreciate it.