I know there are many nuances to this, so I understand this might be a very general answer.
We want to know if we can go after this guy. Our opinion is that he essentially stole the below money from the company, taking advantage of his position of former CFO and then-current accountant -- and one with 100% knowledge and check writing )not signing) ability.
Our hope is that it's beyond stealing: fraud, embezzlement etc. We have no desire to get damages -- only the return of our $10,500.
We don't know if crossing state lines helps us or hurts us. As his business
is being an indy contractor cfo to firms, we would think that he wouldn't want a lawsuit that brings up whatever allegations that are appropriate. details below.
We are a small microcap company with under 5 full time employees. Our independent contractor accountant (lives in Arizona, flies to us in california 2days per week) was recently released. We had no ongoing contract
with him. He was previously on our board of directors
and cfo, but reduced his role at his request because he was scared of getting sued as a director or officer by outsiders due to company finances.
When he started working 6 months before he left, he was worried about getting paid, so a nevada corp that is a debt holder of the company, on the (our) california company's behalf, let him hold 3 cashiers checks totally about $3500 each (about one week of work plus air plus hotel per check). He was NEVER to cash them without permission and only had them incase he couldn't be paid any particular week. There was never a misunderstanding between him and us over this point, and he would agree in any court that that was the understanding.
He was paid on time every week, and company and debt holder asked him for the checks back once per week for about 6 weeks. He was then let go from his responsibilities due to cash flow reasons, which he himself suggested happen a few weeks earlier.
Company had no obligation whatsoever to pay "severance" to an indy contractor, and had no ongoing contractor obligation.
Three days after he left, company sent him an email asking again for the checks.
The following week, unknown to the company, and before the company could issue a stop payment, he cashed all three.
He ducked emails until we caught him on the phone couple weeks ago.
He said that he cashed them because he needed the money and admitted he wasn't necessarily entitled to them. He won't admit that in court, of course.
His opinion is that since they were made out to him, the even though he was paid every week and even though he even admitted that he was only to cash them if he wasn't paid,that he was entitled to them "because he needed them" and because he couldn't find another gig and because he usually has his clients sign a one month transition contract. We never signed a contract, nor did he press us to (and he told us one month earlier we couldn't afford him any longer).
Since the checks were made out to him -- all understandings aside -- are we out of luck, or do we have causes of action?
Does it help or hurt us that three states are involved (Nevada debt holder of our company issued the checks in his name (on our behalf, with our permission) as security so he'd be comfortable working. His work was for a California company, which paid him ontime always. He lives in Arizona, and likely cashed them in Arizona.