Can a Business Use Litigation to Recover Losses From Embezzlement?

While going to court to resolve legal concerns is often the last resort, there are many cases where businesses may need to pursue litigation to recover financial losses. These include situations where a business’s partners or employees have committed embezzlement. This form of fraud can have a significant impact on a company’s bottom line, and business owners will need to understand their options for holding a person responsible for their wrongful actions.

What Is Embezzlement?

Embezzlement may include any situations where a person who is given the responsibility to hold or manage property owned by someone else wrongfully takes possession of the other person’s money or assets. Embezzlement can take a variety of forms in a business setting, and examples of this type of fraud include:

• Falsifying time sheets - Hourly employees may misreport the number of hours they have worked with the intent of receiving additional pay. This is often done to receive overtime pay when a person has not actually worked additional hours.
• Misreporting expenses - Employees may be compensated for work-related expenses. However, some people may attempt to receive additional compensation by claiming that items purchased for personal use were work-related. Some employees may also engage in “double-dipping” in which they charge purchases to a company credit card or account while also submitting expense reports to receive compensation for these purchases.
• Theft of supplies, equipment, products, or money - Some employees may commit direct theft from a company by taking office supplies or computer equipment, or they may steal products from a store or take money from a cash register or safe. Employees may also steal from an employer by under-ringing items at a cash register or voiding transactions and pocketing the cash paid by a customer, or they may provide improper discounts to allow products to be purchased for less than their actual value.
• Falsified vendor payments - An employee may steal company funds by making payments to a vendor that does not actually exist, or they may accept kickbacks from a vendor after agreeing to make payments for products or services that were not actually received.

These are just a few of the ways that employees may commit embezzlement. Whenever a person misuses a company’s resources for their own personal gain, they could face significant consequences. Embezzlement is a form of fraud, and depending on the amount stolen, a person may face misdemeanor or felony charges. A company may also pursue litigation against a person who committed embezzlement. Under Florida law, a plaintiff may recover up to three times the amount that was stolen through fraud or embezzlement, as well as their attorney’s fees during the case.

Contact a Fort Lauderdale Embezzlement Litigation Lawyer

Sources:

http://www.leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&Search_String=&URL=0800-0899/0812/Sections/0812.035.html

https://www.investopedia.com/terms/e/embezzlement.asp

https://smallbiztrends.com/2019/09/embezzlement-examples.html