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TexLaw, Attorney
Category: Business Law
Satisfied Customers: 4430
Experience:  Internationational Commercial Attorney
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We are conducting an audit of our gymnastics booster club.

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We are conducting an audit of our gymnastics booster club. During the audit, it was uncovered that several large deposits by check were coming from the treasurer's personal account. When asked about this she explained that she didn't like depositing cash into the club account, so she would deposit it into her own account and write a check to the club. She's kept horrible records (none really) of all of our fundraising activities, so it's impossible to know how much cash SHOULD have been going into our account each time. Also, on one occasion she took out nearly $900 cash and she has no explanation for it whatsoever. She says she doesn't remember what that was for.

My question is this... even if we find she's returned all cash withdrawn, isn't it still wrong to co-mingle funds. Is it on use to prove she may have stolen cash or it is on her to prove she hasn't?

Thank you for your question.

What she has done is a breach of trust, breach of fiduciary duty, fraud, and possibly criminal fraud.

Because she was the party in the fiduciary position, she would have to account for her wrongful handling of the accounts. That means she would have to establish that she did not steal the money. You would have access to her bank account records in order to help establish your case. All you have to do is show that she deposited money into her account that should have been deposited into the club's account.

Please let me know if you have any further questions. Please also kindly consider rating my answer positively so that I am compensated by the website for my work on your question. Rating positively does not cause an additional charge and does not prevent us from further discussing your questions.

Best Regards,
TexLaw and 2 other Business Law Specialists are ready to help you
Customer: replied 4 years ago.

Thank you for your quick response! So what should our first steps be? Do we go to the local authorities and file a report?

You can definitely do that, as this would be embezzlement.

However, if you would rather keep this in the civil arena, the first thing you would do is contact her and demand that she turn over all her bank account records from the date she became the treasurer. Then you can go through these and see for yourself whether there is any need to pursue this matter further.

Also, she needs to immediately refund the $900 she took out. The fact that she can't recall what happened to the money means that we have to assume she never refunded it.
Customer: replied 4 years ago.

One last thing...Is it still considered embezzlement if she ends up returning it all?

Yes, it is still embezzlement even though she returns the money. It is the unlawful taking that is the crime.
Customer: replied 4 years ago.

Thank you so much for your help! Have a great evening!

You as well. Please let me know if there is any further information I can provide to you.