Is a partner or member of your LLC stealing from the company or suspected of theft or other fraudulent activity?  Are you concerned about the actions of a partner such as commingling or making inappropriate distributions or other violations of or a breach of their fiduciary duty?  How do you protect your own interests as well as the viability of the company itself while resolving the issue at hand and holding your partner or fellow member accountable?

If you suspect a partner or member of your LLC stealing or other inappropriate or illegal action you must take immediate action to protect the company, but you should not act on your own.  One should never confront a business associate or accuse a partner of theft or other inappropriate action without ironclad evidence to support your position.  The experienced business litigation and partnership dispute attorneys at the Watkins Firm can help.  We have extensive experience and expertise in these cases and will help you to put the controls in place or gather the evidence necessary to put a stop to the inappropriate or illegal activity and resolve the matter at hand.

Our expert team deploys proven strategies and forensic accounting to document what has happened and gather the information necessary to take legal action.  Actions may include the implementation of surveillance equipment to monitor computer activity, cash drawers, vehicles, inventory or point-of-sale equipment.  Your partner may be guilty of criminal or civil violations of the law (or both).  The strategy we deploy will be designed to recover the misappropriated assets or funds, while protecting the ongoing operational success of your business.  We work to implement a solution which removes the partner or member of your LLC stealing stealing from the organization or taking actions which have or could adversely affect the company.

Pro-Tip: “You should understand that the first thing you need to do, if you think a partner is stealing, or that business fraud has occurred in your business or in your dealings, is to figure out if you have lost money? Or have you lost the opportunity to earn or make money? And those things are not simple questions. Something may feel wrong, something may seem wrong, or you just may know it’s a gut instinct before you’ll come to us and to the law, go right to your damages. And in business fraud, we have a saying, if it’s off a penny, it’s off a million. If it doesn’t add up to the penny, there’s a reason.

And either it’s somebody added it up wrong or somebody’s ripping you off. And you should look into that and then listen to our podcast Episode 32 Business Fraud,  and you’ll see all the laws that we consider when I think of business fraud. You don’t want to investigate this yourself.  This is something you want someone from the outside taking a look at. First, you want to look right away at your own accounting, your business records as soon as you can. And then if you sense there’s anything wrong, then you know you have damages, you should reach out because many times those damages aren’t even close to what you think. 

Business partner fraud never happens until you make money. I rarely, actually, I don’t know if I’ve ever heard of a case with business partner fraud until the business starts doing well. And then it’s so common. It’s crazy. People with all the greatest virtues you’ve ever seen in your life, you’ve known your whole life. All of a sudden your company is expanding, doing well and money disappears. It’s just so tempting. It’s like gold fever. So that also includes shareholder fraud, officer, fraud director fraud, usurpation. That’s a fancy word for taking the company or corporate assets without any fair compensation or in secret. There is sale of business fraud. We do a lot of those cases. We sell hundreds of millions of dollars in companies. We merge them, we create partnership agreements for them. And we see the hardest part is when you buy a business, you want to know you’re getting what you paid for. And when you sell a business, you want to make sure you get the money, the price you agreed to, because these things are complicated. And you also don’t want to get sued later for inaccurate disclosures, some contingent liability.” – Dan Watkins, Founding Partner

Take action to protect your own interests as well as the welfare of your company. We invite you to review our podcast Episode 32 – Business Fraud as well as the strong recommendations of our clients and contact the Watkins Firm or call 858-535-1511 for a complimentary consultation today.