Embezzlement Due to Financial Stress During Coronavirus

[Kim Lisa Taylor]

Don’t let your syndicate become a victim of embezzlement due to economic hardship during the coronavirus pandemic.

You need pay careful attention to money in your syndicate and the people with access to it. When people experience financial stress, embezzlement increases. It always starts with access and an unsharable need. The person usually plans to borrow the funds, believing they can pay it back. When they can’t, they try to justify why they deserved it. By then, the funds are spent and irretrievable.

Partnership embezzlement and investor fraud happens. Don’t let it happen to you or your investors.

[Evan Polaski]

@Kim Lisa Taylor, thank you for the needed reminder.  This is why so many full time investors talk about the need to run background checks on sponsor's and key people.  Of course a great sponsor can turn bad, and some here can probably share stories of that happening.

I also always encourage people to ask about financial protections/processes of the sponsor.  Who has access to accounts? How are financials reviewed and shared?  Obviously, having audited financials is the ideal, but can be burdensome on some sponsors.  But having a sound review process and A/P system are important to help mitigate these risks.