What actions should we take if the CEO using is company money for personal use?
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What actions should we take if the CEO using is company money for personal use?
I am an investor of a small business and we found out that the CEO also one of the investor has been taking out company money for personal uses casino, bars, Uber, etc. It’s a small business so we do not have an employment agreement with the CEO. We are researching if the money that he took out at casinos were deposited back to the company account, but we don’t think that the full amount has been
deposited back anyways. I know that it’s a crime to use company money for personal use, however is it still a crime even if the money that he took out at the casinos is deposited back to the bank account?He never informed any of the investors that he’s taking out money at the casino, and never informed anyone that he will
Asked on August 22, 2017 under Business Law, New York
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 6 years ago | Contributor
Even if money is later returned, it is still wrongful to take it of company accounts for personal purposes; e.g. it is still theft, the same way a car is still stolen if the person who took it simply uses it for joyride and returns it undamaged. Your options are:
1) To file a police report and look to press charges. Be aware that even though they should, the police do not always take matters like this seriously (they focus on what to them are more important crimes: major frauds, drug crimes, violent crimes, etc.), so while you can report this and the police *should* address it, there is no guaranty that they will.
2) Sue him for theft of company property and breach of fiduciary duty: in the lawsuit, you can seek reimbursement of any lost (not returned) amounts and also for a court order barring this behavior. The matter could be settled by his resignation and reimbursement.
3) If even a fraction more than 50% of the ownership wants him out, he can be fired: a majority of ownership can fire executives or other employees.
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