Misappropriation of Investor Funds

[JanetBerger62]

What is the name of your state (only U.S. law)? Colorado

Is it always illegal to use private investor funds for personal reasons, even if the monies are eventually returned?

 

[ShyCat]

Is it always illegal to use private investor funds for personal reasons, even if the monies are eventually returned?

Is it always illegal to rob a bank even if the monies are eventually returned?

Of course it is. Returning stolen money does not alter the time line to one where you did not steal the money in the first place.

 

[JanetBerger62]

I thought so...

I am a private investor involved in a situation where one of the owners of the company also happens to be a private practice lawyer - there is strong evidence documented in the company's bank records that indicate misappropriation of investors funds into the tens of thousands of dollars. The "spokesperson" for the company, (the attorney) is claiming that "monies taken for personal use have been reimbursed, and therefore, no misappropriation has occurred..." I immediately saw this to be an obvious smokescreen tactic on the parts of the owners, and needed legal clarification that under NO circumstances are any investor funds to be used for personal reasons, regardless of the amount taken or whether it was eventually returned or not... I gather from your reply that I am correct in my assumption... thanks so much for taking the time to respond to my question!

 

[LdiJ]

I am a private investor involved in a situation where one of the owners of the company also happens to be a private practice lawyer - there is strong evidence documented in the company's bank records that indicate misappropriation of investors funds into the tens of thousands of dollars. The "spokesperson" for the company, (the attorney) is claiming that "monies taken for personal use have been reimbursed, and therefore, no misappropriation has occurred..." I immediately saw this to be an obvious smokescreen tactic on the parts of the owners, and needed legal clarification that under NO circumstances are any investor funds to be used for personal reasons, regardless of the amount taken or whether it was eventually returned or not... I gather from your reply that I am correct in my assumption... thanks so much for taking the time to respond to my question!

I can see at least one circumstance where it would not be illegal. If there was a properly executed loan document between the company and the person who received the funds, that outlined specific repayment terms that were adhered to, I do not believe that it would be illegal.

 

[JanetBerger62]

Clarification on your response, LdiJ?

Can such a personal "loan" of investor funds be made between the owners of the business without the investors' knowledge or consent? (In this case, the evidence lies in bank statements where charges have been made from the business account for obvious personal purchases - (building materials for dog kennels, recreational electronics, groceries, household supplies, boat rentals, etc...) This is an Internet dating service - clearly these charges are not business related....

Thanks again~
Janet