Misappropriation of company funds is considered fraud. Often, the fraudster is within the company itself. It might be a rogue director who is diverting funds away from the company to his own personal account, or to another company account in which that director has an interest. It might be an employee who is acting covertly in duplicating or amending company invoices for the employee’s own personal gain, in the hope that no one will notice.
In cases involving misappropriation of company funds, it is possible to issue a claim against the perpetrator to recover monies diverted or stolen and claim damages. In such cases, it may be necessary to establish a breach of fiduciary duty and/or duty of good faith before a claim can be made – and it is advisable to take legal advice at an early stage of any dispute involving misappropriating company funds. It is important to act strategically to prevent any monies being further dissipated, or assets which have been misappropriated being disposed of.
Claire Boucher and her fraud team at Ashfords LLP have considerable experience in advising on misappropriation of company funds, including obtaining freezing orders to prevent the perpetrator dissipating monies or assets, as well as disclosure orders and search orders to recover monies.
We can also advise on asset tracing – including cross-border asset tracing – to recover any property and monies which have been diverted as a result of misappropriation of company funds.
We may also be able to apply for a summary judgment on any monies which have been diverted, including sums which might have been overpaid in the form of salary increases, commission, bonuses, credit notes, expenses, loans or other company entitlements.
Misappropriation of company funds may also lead to criminal prosecution for fraud.
For expert legal advice on Misappropriation of Company Funds, please see our article Seven Ways to Protect Your Business After Discovering Fraud, and please contact Claire Boucher for more information.