This could be happening to your company right now: your CFO or other trusted employee has embezzled money from your coffers, or is still stealing from you unchecked. The results can be dire for any company, and unfortunately, often not even a company’s own auditors can discover thefts like these before it’s too late.
Examples of embezzlement from all kinds of companies, large and small, appear in the news regularly, and usually, the money disappears quickly.
But in one case, Pepper attorneys Frank A. Mayer, III, Joseph C. Crawford and Francis P. Devine, III helped their business owner client recover more than $5.2 million of embezzled funds within seven months after discovering the theft. Their quick action prevented a very substantial loss from becoming permanent. The facts of the case show how difficult it can be to stop the theft and recover the money, as the Pepper lawyers:
After obtaining the injunction freezing the former CFO’s assets, the Pepper lawyers presented the pertinent testimony, exhibits and background information to the U.S. Attorney’s Office in Philadelphia, which started a criminal investigation. The Pepper attorneys then submitted a proof of loss to the client/employer’s fidelity insurer, gathered and provided the necessary loss documentation and recovered those policy proceeds. To date, the Pepper attorneys have recovered more than 80 percent of the embezzler’s stolen funds. The investigation and prosecution culminated with the embezzler’s guilty plea to federal criminal charges and the court’s imposition of a substantial prison sentence.
This was a hard-won happy ending, and an example of how Pepper can help a company prevent or recover from situations like this. But victims of embezzlement, ideally, do not want to find themselves in this situation – having to react to, stop and remediate the damage. Francis P. Devine, III, a Pepper partner and co-chair of the firm’s Litigation and Dispute Resolution Department, offers these tips for companies to help prevent embezzlement in the first place:
Experienced legal counsel working with management can efficiently and effectively implement many of the preventative steps, and is vital in recovering from theft. If you have questions or concerns about preventing embezzlement, or if you believe you are the victim of such theft, please contact the authors: Frank A. Mayer, III, Joseph C. Crawford or Francis P. Devine, III. Each of these partners is experienced in dealing with embezzlements, obtaining quick recoveries and interacting with the appropriate insurance and law enforcement authorities, which they can bring to bear in serving your unique circumstances.
The material in this publication was created as of the date set forth above and is based on laws, court decisions, administrative rulings and congressional materials that existed at that time, and should not be construed as legal advice or legal opinions on specific facts. The information in this publication is not intended to create, and the transmission and receipt of it does not constitute, a lawyer-client relationship.