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truthfinder, Truth Finder
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what is the penalty for misappropriation of funds for ...

Resolved Question:

what is the penalty for misappropriation of funds for a business in the state of mississippi
Submitted: 10 years ago.
Category: Legal
Expert:  truthfinder replied 10 years ago.
I am not sure if this is more of racketeering you are asking about (for which you can read more HERE) or embezzlement (HERE); could you give more information so that I may assist you further? Has there actually been a charge brought?
Expert:  truthfinder replied 10 years ago.
Ok, I see that you added more information so I will try to explain more. This could make it look like you are taking the money from them for a service (Customer) that they are not to be charged for as it is a state funded program. Can you tell me who is investgating you? The state? Who? And have they charged you with anything?
Customer: replied 10 years ago.
Reply to truthfinder's Post: There has not been a charge brought, but I have a client who had issued a check to us for $322,000.00 at the end of June to set up the pension account for her benefit. Her husband took a turn for the worse, and is not expected to make it so she requested a refund. I went to wire her the refund today, and the "large money" department at the bank had put a hold on the transaction to investigate it. I had my insurance license suspended last year for misappropriation of funds because a client wrote a check to me, even though the funds were returned to the client. Clients pay us to assist them in theCustomerprocess. I have another lady who is a licensed insurance agent in our office who handles setting up all of the account, but I have had over the past several months, clients issue checks payable to our business for benefit of them to set up the pension account. We have inturn issued a check to the insurance company for their benefit.
Customer: replied 10 years ago.
Reply to truthfinder's Post: There has not been a charge brought. We are a private company that doesCustomerplanning. We basically tell people how to qualify forCustomerwhile protecting their assets using a special exempt account. This is an insurance product. The bank said that we used another persons deposit to refund the first client's money basically. That is where the question of misappropriation of funds came into question from an investigator in the large dollar department at the bank. Apparently they then investigated or called to see that my insurance license had been suspended last year for misappropriaton of funds so they put a hold on my account and the refund to the client. I want to know am I in trouble for taking the funds, and then forwarding them on to the insurance company or in this case for refunding the funds to the lady. I will be honest in that I have used one deposit to bridge over making a deposit for another client, and have used funds paid to us for other expenses. I have followed through on setting up all of the account for the people, and have two pending at present. Upon receipt of a large commission I have coming, I was going to forward the two pending cases on to the insurance company. I am worried that I am in trouble for the delay in setting up the accounts or using the funds
Customer: replied 10 years ago.
Do I need to wait for an answer or accept so that I can get you answer
Expert:  truthfinder replied 10 years ago.

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.

Expert:  truthfinder replied 10 years ago.

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?

Customer: replied 10 years ago.
Reply to truthfinder's Post: I own the consulting business, but she writes the pension accounts, the insurance product. Since they have been writing checks to us, usually one for the fee, and some for the deposit to the pension account, but it was clearly stated for benefit of... As long as every person who gave us money has had a pension account set up for them, have I done anything illegal by having them write the checks to us and then forwarding them to the insurance company
Customer: replied 10 years ago.
Are you still there
Expert:  truthfinder replied 10 years ago.

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.

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Expert:  truthfinder replied 10 years ago.

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!