legal remedies for business dispute with business partner

You have two issues here.

First is getting back the money the mother invested. The first and most important question is: if the mother goes to court and wins, does the individual have the money to pay back?

One thing I recommend in situations like this is to go to small claims court. In California, the limit is $5,000 but you do not need a lawyer (in fact no one is allowed to have a lawyer in small claims court). The benefit though is that you do not need to pay any attorneys fees which reduce the $10,000 anyway. It is very rare that someone goes to court on a case like this and gets all of their money back at the end of the day.

Also, even if the individual does not have the money now, a small claims court judgment is a good way to ensure that the individual will want to pay it back later to clean up a credit rating.

Going to the authorities will not hurt anything. You will need to contact the police or district attorneys office to discuss, but they may not be as helpful about this kind of case. It is a civil matter they will say. It may be appropriate since the individual tried to get credit cards in the mother's name.