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J.Hazelbaker
J.Hazelbaker, Attorney
Category: Legal
Satisfied Customers: 4385
Experience:  Attorney and small business owner with 10 years experience in the general practice of law.
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If someone is employed with a real-estate company and finds

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If someone is employed with a real-estate company and finds that fraud is being committed and resigns from the business, is that person liable for any of the fraudulent transactions that occurred?

J.Hazelbaker :

Hello. Thank you for using JustAnswer.

J.Hazelbaker :

The full answer to your question depends on what knowledge and participation the employee had of the fraudulent activity prior to resigning.

J.Hazelbaker :

If there was some form of participation, the employee could have liability even after resigning.

J.Hazelbaker :

However, if there was no knowledge and, upon discovery, the employee promptly resigned, there would not be direct liability for the prior fraudulent acts.

J.Hazelbaker :

However,

J.Hazelbaker :

there could be liability for not reporting it even after it was discovered.

J.Hazelbaker :

This depends on the type of business, the employees position, and the harm being done.

J.Hazelbaker :

Thus, the employee should seriously consider reporting the activity, even though they have resigned.

Customer:

What if the employee unknowingly participated in the fraudulent activity?

J.Hazelbaker :

Filing such a report would also help insulate the employee should, upon investigation, the employer attempt to shift blame on the reporting employee.

J.Hazelbaker :

Unless there was knowledge and intent, the employee cannot be found criminally liable.

Customer:

Thank you!

J.Hazelbaker :

You are welcome.

J.Hazelbaker :

Please let me know what follow-up questions you have. If my above responses have been helpful, please click Accept so that I get credit for the time/effort. You may always restart the thread and ask follow-up questions at any time by clicking the “Reply” button at the bottom of the question/answer thread. You can access this thread later in your profile under the “My Questions” tab.

Customer:

How does one prove that they didn't know that what they were doing was fraudulent?

J.Hazelbaker and other Legal Specialists are ready to help you

In addition to testimony, the facts of the situation can lead be effidence in the person's favor. For example, did the person receive extra compensation, rights or privileges that can't be explained. The investigator will ask who gained through the fraud and who was in the best position to know of it and stop it.

Witness testimony can also be used. Are there any witnesses that will testify that the person knew or didn't know.

Finally, the fact that the employee resigned is legitimate evidence that the person was not supportive of the activity and did not want to be involved.

The more details one knows about a particular situation, the easier answering this question about evidence would be.