Posted: 9/21/2007 6:49:55 AM EDT
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I've got a tax client that used to own a portion (25%) of a corporation that I did the corporate tax return for. Due to their "business practices" I had to cut ties with them. However, this guy has remained with me for his personal stuff. In late '04 he told them he wanted out and he was starting his own company. Obviously I'm helping him with that. He doesn't have a lot of capital at the moment, but I know he'll do VERY well. Part of his offer was that I handle the finances for him and be a 20% partner of his. Well, his former company claimed he stole from them while he worked there. Att. Gen here didn't hardly give it a second glance. BUT, the company's insurance paid them their claim. My concern is if the insurance company paid off that old company, would they not have a claim against him? What is the statute of limitations for embezzlement? I have some concerns partnering up with someone that could have this on his plate in the future. I don't want to put time and resources into something and an insurance company come take it. Three years will have past this December and it's in Tennessee. TIA for your help! |
So, Company A (hereafter 'Moneygrubbing Bastards') let this guy go, after their shady dealings were exposed. They then filed a claim with their own Insurance stating that your client embezzled, and based on whatever evidence the Insurance company paid the 'Moneygrubbing Bastards' under a business policy. I'd say the odds are good that, barring any Statute of Limitations issues, they will try to subrograte their claim against your client. They paid a theft claim, knowing (at least to the degree they felt comfortable with...) WHO the thief was. I can't think of why they wouldn't want to get their money back from him. Now, it's possible that the sum is too small to justify the court action. And, it's also possible that they know they don't have enough evidence to win in court, but it was just enough to make them think they might lose if the 'Moneygrubbing Bastards' had taken them to court over the original embezzlement claim. Possible, but not likely. I'd steer clear unless you get much more information clarifying the whole situation. FluxPrism |
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I AM NOT LICENSED IN TN, but, the SOL in a case with your facts is likely 3 years, meaning, the plaintiff would have to file suit within three (3) years from the accruing of the cause of action. The statute is 28-3-105. You need to talk to a TN lawyer because, again, I'M NOT LICENSED THERE and could be wrong. Yes, the insurance company can, more than likely, file an action and seek subrogation. You might be protected, along with a company you create, UNLESS you knowingly use capital/assets/funds that you know or should know were unlawfully converted. Seek local counsel. |
| Steve's advice to "seek counsel" is the best advice you're going to get. I wouldn't be so sure that the insurance company wouldn't/couldn't involve the OP in any litigation to recover the funds, as the OP handled the accused thief's tax returns. (I'd think that a smart lawyer for the insurance company could make a pretty decent nexus between the fact that the OP handled the accused thief's taxes, then "coincidentally" went into business with the accused thief, with no capital investment on the OP's part.) |
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I'll never forget this from police academy. We had the Commonwealth Attorney for our county come in and tell us, flat out - "Guys, if you are EVER going to commit a crime - EMBEZZLE. Don't do it small, either - do it HUGE!" At this point we all look like  because here's the prosecutor for the county telling us, police recruits, what law to break if we're ever going to do it.I'd like to post what he continued to say, but it falls into that grey area of CoC compliance where I might actually - by repeating what he said - be telling people how to embezzle. Suffice it to say (for the purposes of supporting my advice) he enumerated upon the difficulties and lack of control many companies face in actually establishing methods/processes/controls to determine if funds are being embezzled. So considering that, I wouldn't go into business with him unless you felt comfortable in trusting him (i.e.: the other company is full of it) or you're able to establish a method/control to determine if funds are being embezzled by anyone. _MaH |
You probably got this advice before identity theft became a problem, since that's another crime that's difficult to prosecute. Most banks and CC companies don't bother to even report it; they just make up the losses through higher interest rates and fees. |
These are the kind of things which make me say, "Damn... I know it's illegal, but talk about profit!" A while back they talked about "cigarette smuggling". As a Virginian, my initial response was " Do what? What the hell is that?". They then talked about how people were buying cartons of cigarettes down here in VA for about $30, going up to NYC and selling them to ma/pa convenience stores for like $80 because it's cheaper for them to buy it that way then pay all the state taxes, etc.They showed about 200 or so cartons of smokes and said "Police estimate the smugglers could have netted as much as $10,000 with these cartons alone."  "DAMN!!" I said. "Why aren't I doing that!?"Oh yeah... Legality...  _MaH |
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Sorry it took so long to come back to my own post!he He and I talked this past Saturday and I told him that although I KNOW he is innocent, it may be better that I just do some work for him and we handle it like a normal client accountant relationship. He understood and knows I have a wife and son and the risk was too much. Nothing may ever come of it and I might miss out on big money, but I can live with that. Just to give a little taste of two things that brought all this up: They were a HUGE muti-state company that was going thru an ownership transition. Two of the partners (not the guy wanting to do business with me) asked me to remove some of their "dog" jobs from their financials, in essence making the company look much more profitable, and sign off on them for their bonding company. I said no, they give me the ole you'll never work around here again speech. I leave and they call me all apologetic like and I tell them I'll finish that year, one month left and find someone else. Shortly after that I'm running some tests for phantoms on the payroll since their 3500+ employees and in a bunch of different states. I noticed almost by accident that a NUMBER of people predominately in one state had all had their pay reduced. However, everyone of them had a raise in their living allowance. Everyone of these guys also had garnishments for child support. HMMMM! In actuallity, they were taking home the same amount of money, but for COURT purposes made less money. I grew up in a divorced family and that's one area that tweaks my buds. I ask my buddy about it, who is also an owner and he blew the whistle on them. I cut ties with them immediately and, as far as I know, they never knew it was me that gave him the info. They may know, but I was never asked about it. |
I told him no, as stated in my above post, but before I read your post today. If I was still considering it, you definitely brought up a VERY GOOD reason to say no. Thank you, I had not thought about that angle. |