My Bookkeeper has committed fraud and embezzlement against my small business. What can I do?

Question:  I am a small business owner who recently discovered that my bookkeeper set up a dummy vendor account to funnel money from my company.   What legal recourse do I have against my bookkeeper and how can I recover my money?

Response: Unfortunately, you are the victim of both fraud and embezzlement.   The fraud occurred when your bookkeeper set up the phony vendor account and the embezzlement when your bookkeeper actually stole that money.  By definition, fraud is an intentional deception and embezzlement is theft by someone entrusted with the money or assets.  Embezzlement can involve stealing lumps of money at once or funneling small amounts over a period of time, which is what your bookkeeper seems to have done. 

Even though fraud and embezzlement are considered "white collar" crimes, both are still subject to penalties and imprisonment depending on the state statute that applies.   Upon complaint by the victim, the state brings criminal actions against the perpetrator.  However, victims have recourse to recover stolen assets through civil actions.   You need to do two things:  file a police complaint to initiate the criminal action against your errant bookkeeper, then engage an attorney to pursue a civil action.  Also, the Department of Justice’s website provides guidance on the broad issue of fraud.

Additional Resources:

• Embezzlement laws
• DOJ - Fraud Section

Answered by Sharon Cullars

Disclaimer: This site does not provide legal advice and users of this site should not interpret any of the information presented here as legal advice. The information provided merely conveys general information related to commonly asked legal questions. We are not a law firm and the employees responding to questions are not acting as your legal attorney. You should ultimately consult with a Lawyer for your case.