Secretary Stealing Money (small business, lawyer, organization, repayment)

[mgoldie1]

Hi, I need some advice. My friend is owner of a small business (only 2 employees). He recently just found out that his secretary, who he has been friends with for almost 10 yrs, has been stealing from the company. He has verified this with copies of cancelled checks made out to Verizon, Bank of America (with different account numbers than his) and some duplicate "salary checks" made out to the secretary.

He is in the midst of gettting all his bank statements from 2007 to see how long it's been going on. Unfortunately, he gave total autonomy to the secretary to pay all bills and write out all checks, and even to sign his name on the checks.

In addition, her husband is my friend's accountant. The secretary has all the 2007 bank statements and gives the excuse that her husband needs them for tax purposes.

Also, there are two little caveats. She has always been paid cash (checks made out to cash) and my friend's wife has been put "on the books" as an employee (I believe due to health care).

Here's my question. What does he do??? He is definitely going to confront her, show the proof, give her an opportunity to admit that she did it, and try to find out how long it's been going on and how much she has taken.

What if she threatens to "tell" on him regarding paying her cash and keeping his wife on the payroll? What if her husband does something to his taxes/paperwork? Should he press criminal charges?

Please advise. Thank you very much.

*** I understand that my friend was not the smartest guy in the world to give all this autonomy to this woman and he has learned his lesson.

[Capt. Cave Man]

I always say "Do it once, you were ignorant(didn't know any better); do it twice and your stupid".

He trusted a good friend, who doesn't? I'd suggest getting a lawyer and check'n out all options of how to do this. He should not "act" as if he knows.

How much money are we talk'n here? 100's, 1000's ?

[mgoldie1]

Thanks for the reply. We're talking 1000's. Considering the fact that just since 1/1/08, she has stolen over $4000, it's scary to think how long this might have been going on and how much money was taken.

He pretty much had to confront her today. He has a lot of trouble hiding his emotions. And besides, she will know something's up when she comes into work and sees all the checks gone from her desk.

I'm still awaiting a callback from him to see how it went, but I'm nervous for him.

[KevK]

1. Rule # 1: Never hire friends or family. If you have a friend or family member that needs a job, help them find one elsewhere.
2. Rule # 2: Always sign your own checks. Oprah Winfrey has a huge organization yet she still signs each check. Like she said "when you don't sign your own checks, you are not incontrol of your business anymore"

[mgoldie1]

He's definitely not hiring any more friends and is signing all his checks. Of course that doesn't help him with what has gone on, though.

[Lindsey_Mcfarren]

A lawyer might be able to make it seem as if the Accountant knew of it all and participated AND I'm guessing he has alot too loose. I would get a lawyer and tell the people if they pay the money back with reasonable interest, I wouldn't press charges. If they give trouble then I would bring it all out.

They don't have any interest in bringing Uncle Sam into it, they would have to pay back taxes on the money, they have alot more to loose then he does.

[mgoldie1]

Lindsey, thanks for the reply. I was hoping someone would say that. I dont want this situation to escalate into a "well, if you go after me, i'll have the government go after you..." Then again, if the secretary is desperate enough, she may do anything.

[sean98125]

If she tells on him about paying cash, she will still be liable for those income taxes won't she? The owner might get a fine for not paying them, but I think the secretary would still have her own penalties for not claiming income. She'd be an idiot if she went that route, and her husband would probably wind up facing penalties for bad accounting practices up to losing his certificated status.

Just fire her, quickly and without discussion.

[Sgoldie]

He should talk to a lawyer. I doubt there is a problem with his wife being on the payroll and his bookeeper could be regarding as providing a bookeeping service without the need for payroll taxes.

However, if she's taken that much money he'd better be mentally prepared that she won't be able to pay it back and he may have to send her to jail. No one wants to hire a thief so getting her off the job market will be doing everyone a favor. He may be able to put a lien against her house or maybe her husband can come through with repayment.

A sad situation. Oh, and he needs to notify the bank asap that she can no longer sign.

[cdelena]

Hire an attorney, terminate the relationship, press charges, pay taxes.