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CalAttorney2
CalAttorney2, Attorney
Category: Business Law
Satisfied Customers: 10238
Experience:  I am a businesses law attorney, with experience advising and representing owners and investors.
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I am a CPA not corporations (501(c)3 and 501(c) 6). A former

Customer Question

I am a CPA for two not for profit corporations (501(c)3 and 501(c) 6). A former employee opened at least two credit cards with fraudulent signatures from the president and two board of directors (both who are attorneys). There are also numerous bank activities that cannot be documented.
Where should the corporations turn for help?
Submitted: 10 months ago.
Category: Business Law
Expert:  CalAttorney2 replied 10 months ago.

Dear Customer,

I am sorry to learn of this situation.

In my experience, law enforcement is unlikely to expend the time and resources necessary to pay for a forensic audit for a case of this scope. In most of these cases, the prosecution relies on paperwork and documentation prepared by the parties themselves in preparing the case for the court.

The extent of involvement and resources that the prosecution advances (including signature analysis, etc.) varies depending on individual department policies and resources.

The first place to go is very basic - make a police report to local law enforcement (simply call the police department's non-emergency number, let them know you need to report a financial crime, and speak with a detective). The officer can guide you through what is expected at a local level.

If the individual has personal assets, the criminal prosecution can result in a restitution order that can be used to compensate the victim (non-profits). If there is no restitution order (not common), the non-profits can file a civil complaint and use the criminal prosecution as "res judicata" to prove most of the elements in the civil suit leading to a swift money judgment.

If the individual does not have assets to compensate the non-profit this is less helpful, but the criminal prosecution can both punish the bad actor, and protect other businesses and organizations.