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What is considered fraud or embezzlement in a company that is incorporated with two owners?

Asked over 2 years ago - Mason, OH

I work for a corporation that has 2 owners, one owns 99%. This owner uses the company bank account for major personal purchases such as luxuary cars, vehicles for his children, which the company pays all maintenance and insurance not to mention all family vacations are charged off on company credit cards. The latest being the withdraw of $175,000.00 to purchase a private residence. I know these are all being claimed as company expenses and not as personal income, avoiding paying taxes both ways. All being done without the knowledge of the 1% owner. The office/finance manager hides these transactions with multible journal entries.

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Attorney answers (1)

Steven J. Fromm

Reputation Level 20

Answered over 2 years ago. Corporate / Incorporation Lawyer in Philadelphia, PA.

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Well this sure seems like a classic case of tax fraud, if they are taking deductions for all of these questionable expenditures.

LEGAL DISCLAIMER
Mr. Fromm is licensed to practice law in PA. The response herein is not legal advice and does not create an attorney/ client relationship. The response is in the form of legal education and is intended to provide general information about the matter within the question. Oftentimes the question does not include significant and important facts and timelines that if known could significantly change the reply unsuitable. Mr. Fromm strongly advises the questioner to confer with an attorney in their state in order to ensure proper advice is received.

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