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Tina, Attorney
Category: California Employment Law
Satisfied Customers: 33166
Experience:  JD, 17 years experience & recognized by ABA for excellence in employment law.
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I live in california. I am aware of fraudulent activity on

Resolved Question:

I live in california. I am aware of fraudulent activity on my employers part involving falsifying information during an IRS audit, embezzlement of tax monies from clients, falsifying tax return dates on client returns. What is my obligation to report this and can I be held liable?
Submitted: 4 years ago.
Category: California Employment Law
Expert:  Tina replied 4 years ago.
Hello and welcome,

If you engage in criminal activity, you can typically be criminally prosecuted for such conduct. There would normally not be civil liability to customers by the employees though except for those employees who have signatory authority and could make the tax payments but chooses not to.

It is typically best for the employees to retain an attorney and report the employer's conduct to the proper authorities to avoid liability on the employee's part.

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Customer: replied 4 years ago.
I understand that. Do I have an obligation as an employee. As more of a description, my employer is a payroll company which I have knowledge has used tax monies from client accounts for their own use as well as changing dates on federal tax forms to reflect different due dates than they are for taxes. Also during an IRS audit they created false invoices to increase their reported income to cover this fact.. Am I obligated to report this to anyone?
Expert:  Tina replied 4 years ago.
There is normally no affirmative legal duty imposed on an employee to report illegal activity by an employer, no.

Customer: replied 4 years ago.
So if I do not report this, no action can be taken against me for having knowledge? I won't be considered an accessory to a crime? I thought these were felonies?
Expert:  Tina replied 4 years ago.
You could be charged as an accessory if you have any authority over the matters which involve criminal activity by the employer. That is one of the reasons I would retain an attorney and report such activity to the authorities--the attorney can aid you in avoiding prosecution while revealing the activity by the employer.

Customer: replied 4 years ago.
Ok. Which type of attorney do I talk to?
Expert:  Tina replied 4 years ago.
A white collar criminal law attorney. The state bar association can provide attorney referrals as

All the best to you.

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