Normally the checks would have to be issued to the company or corporation and not to an individual and must be clearly marked as to what they are for. For instance, the public libraries in a county next to ours has been under investigation for this for some months due to the fact that the manager at one branch could not account for money that was missing from the library account. Some check were found that were to written to the library but were written to him personally and never recorded; the same thing when he went to write checks from the library account they were to a person and no note as to what company that person was with. As an Educational Consultant for a publishing company, the other libraries have really gotten tight on having to right checks for book purchases to the company rather than to myself for the service of purchasing the books myself. The thing is, the clients can not write a check to an individual, period, it must be to the corporation. I am assuming that you mean that the money is going to MediCare and notCustomer is that correct? It is always best for your clients to write separate checks, one to the insurance company for the benefits, and a second check to you for your fees and services rendered. I looks really bad for your company to receive a check of such a large amount fro an elderly client, that is a red flag to anyone who has worked with the elderly and would automatically put suspension onto your company as to why they would be paying your company such a huge amount, basically all they had. If you are going to set up accounts for them, have them write the checks for those directly to the service providers and then write a separate check to your COMPANY for the service you are providing; the other way is going to always cast suspension on you because of all the fraud dealing with seniors.
I just recieved additional information again so I am addressing that now as well.
In your case, it is best to have the money from clients put into separate accounts, much like landlord laws require for those with multiple units and tenants so it is not seen as you using one person's funds to pay another person, that is a violation. I am reading this as the state took away your insurance license and now the bank is investigating you or they have got the state to initiate an investigation, correct? Have you been running this company and service without a license or has the other person that still has their license been handling that?
It seems that you needed to have the money in then account to cover this large of a refund. What may have happened is that any amount deposited over a certain large dollar amount is flagged and recorded to see how it is used. Especially now days during times of Terrorists and Money Laundering, the Federal government will be looking at this as well. The fact that you made a huge deposit and then turned around not long after and wanted to withdraw it, was more than likely very suspicious to them and that is why they began investigating to make sure this wasn't one of those two or an insurance scam on senior citizens as you did not have a license anymore to do the business you were practicing. If you are simply setting up account for these clients with their money, then they should be writing the checks to the company or bank they are wanting to transfer money into; not to you due to the fact that should they need a refund, the money would have to return through you (and the bank) to them again raising concerns. The problem is that, much like this situation, if you needed to refund someones money but didn't have it to refund, you could be sued for that (hence you should keep money paid to the company separate from that received by clients to open accounts). Is this making sense? I feel like I am talking in circles now, LOL! What I mean is that if you were to have to refund what they are paying your COMPANY, it would be much less than having to refund the amount in the account you set up for them (which should have been done immediately to avoid this situation). If they write a "fee" check to your company, put that in your company account. Any other check they write that is for setting up accounts or insurance, put in a separate account. This protects you should you need to refund any portion of their money. If you are setting up something for them, the money should be transferred to that immediately following and not used for another clients purpose; that is a misappropriate use of the money for your clients did not give you permission to use their money to pa another client, but to use it specifically for the purposes intended which is setting up their accounts.
Go HERE to read more laws on INSURANCE. You may also want to be very careful in the business you are in due to the implications of the law HERE. It is possible that they could charge you with conspiracy to commit fraud or fraud itself. Read HERE. Right now they are investigating you for misappropriation of funds, but if they were to find you guilty after investigating, the charge would be something different,like embezzlement, fraud, etc. so it is hard to say what the penalties are if you haven't been charged with a true crime yet.
More than likely your punishment will be restitution in way of monetary fines like those listed HERE or it could up to something worse if charges are brought such as this here:
Any person who assumes the responsibility of managing the financial affairs of an elderly person who is a resident of a nursing home shall be guilty of a class D felony if such person misappropriates the funds and fails to pay for the nursing home care of the elderly person. (This is an example from another state.)
If it is a misappropriation of funds charge, then that is more of a civil matter, but criminal charges can be brought in way of a misdemeanor or felony charge depending on what their investigation turns up and who they report to; this is were it becomes more serious in way of "penalties" and it is very possible your company could be barred from doing business as well as lose any license you do have.
I wish I had better news. If you need further assistance, please feel free to contact me, and I highly recommend getting an attorney to assist you with any future action that may be taken whether civil or criminal. Good luck & God bless!
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