David H. Schwartz
What to Do When You Suspect Your Business Partner of Fraud
Many businesses are formed as partnerships whereby individuals combine their resources and talents to make profits. However, things may not always go as planned. A business partner may get greedy, betray your trust, and steal from the business account. This can cause serious damage and expense. According to a recent report by the Association of Certified Fraud Examiners, the median loss for the owner and executive fraud is $850,000.
If you suspect your business partner of corporate fraud or stealing from the company’s account for personal benefits, you are within your rights to sue for breach of fiduciary duty and pursue compensation. Attorney David Schwartz can provide comprehensive answers to all your questions about corporate fraud with regard to business partnerships.
The Law Offices of David H. Schwartz, INC. proudly serve clients throughout San Francisco, Santa Clara, Oakland, San Mateo, Alameda County, San Jose, and the San Francisco Bay Area of California.
What Is Corporate Fraud?
Corporate fraud (or business fraud) can be described as an illegal activity undertaken by an individual, company, or business partner, in an unethical or deceitful manner, for personal or financial benefits. These schemes usually appear under the pretext of legitimate business practices.
Business fraud is considered both a civil and criminal offense. However, for the purpose of this post, we will focus on the civil aspects against which you can pursue compensation for the damages done to you and your business.
What Are Your Legal Options When You Suspect Corporate Fraud?
Discovering that your business partner, someone you likely trusted, has betrayed you can be devastating. However, now isn’t the time to let your emotions take over. You need to take action to prevent further damages. Your legal options as the offended party include:
Sue for Breach of Fiduciary Duty
If you know that your business partner has been stealing money from your company accounts, you may sue your business partner for breach of fiduciary duty. In a fiduciary relationship, one person is under a duty to act in the best interests of the other person on matters within the scope of the relationship.
Conversely, taking money from company accounts and using it for personal gain can be considered against the interests of the relationship, as it does not benefit the business. Examples of such breaches include
- Misappropriating funds
- Misrepresenting important financial information to key shareholders
- Not acting in the best interest of the clients
Terminate the Business Relationship
Business partners are expected to always act in good faith. However, discovering that your partner is stealing from the business will destroy your trust and damage the relationship. Terminating the business relationship, whereby the person is completely removed from the partnership, could be another way to resolve the partnership dispute.
Whether you want to sue for breach of fiduciary duty or terminate the business relationship, a corporate litigation attorney can help guide you through the process.
In order to successfully claim financial compensation for the damage done to your business, your attorney must effectively demonstrate that:
- A fiduciary relationship existed;
- A breach of fiduciary duty occurred;
- The defendant acted for personal gains or on his or her own behalf; and
- The breach of fiduciary duty caused harm to you or your business.
The statutes and regulations that are involved in a breach of fiduciary duty claim are usually very complicated. If you suspect that there has been a breach of fiduciary duty in your business relationship, it is in your best interest to consult with a knowledgeable commercial litigation attorney.
Attorney David H. Schwartz is well-experienced in handling matters of partnership disputes and business fraud. He will review your case, provide comprehensive legal counsel, and will provide dynamic, results-driven representation on your behalf.
Experienced Business Litigation Attorney in San Francisco, California
If you suspect your business partner of stealing from the company for personal gain, call the Law Offices of David H. Schwartz, INC. as soon as possible. Attorney David H. Schwartz can fight vigorously on your side to help you protect what belongs to you. Mr. Schwartz represents clients in San Francisco, San Mateo, Santa Clara, San Jose, Oakland, Alameda County, and the surrounding communities in the San Francisco Bay Area. Call his office today to get the legal guidance and strong representation you need.