Most in New York hear the word "embezzlement" and picture someone relaxing on the deck of a lavish home in some tropic paradise that was completely paid for by the company's dime. At least that is the assumption that many had prior to coming to us here at Sapone & Petrillo, LLP after having been accused of embezzlement themselves. In theory, any misappropriation of company funds that is linked to you could qualify as embezzlement. How, then, are you to protect yourself from such a charge?
The easiest and most effective way is to show that any of your company's money that you spent was used strictly for business purposes. This is where meticulous record keeping comes in handy. Provided that you can provide a legitimate paper trail to all of your business transactions, it is difficult to prove that you acted inappropriately.
Listed below are just a few of the business records that the Internal Revenue Service recommends that you can produce that could help you answer embezzlement charges. These include:
- Account statements, cancelled checks and any other documentation detailing fund transfers between your business and your personal financial accounts
- Business credit card statements and receipts
- Invoices and other records detailing petty cash purposes
- All documentation related to business travel, including airline, hotel and rental vehicle receipts, as well as a record of per diem purchases
If you submitted financial statements for reimbursement, then you should also include information related to all of your business-related purchases, including details as to why a purchase was made and how its use related to your professional role.
It is best to be able to produce original documentation, which reaffirms the wisdom in retaining records to all business expenses. More information on responding to embezzlement claims can be found here on our site.