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DLEBLANC's avatar

What should I do about a loved Sister- book keeper, who has stolen from the company?

Asked by DLEBLANC (28points) May 28th, 2015

She has personal financial problems (self inflicted) and now is sneaking money out of the family business. I used to trust her with the finances but I have now given her two chances to stop but is now at it again. I love my sister and family but she is already overpaid for the work she does in this small business.I have been signing the cheques for the past two years but now she has even forged my name on some cheques made out to her and her husband (a key employee). He has been devastated by their surmounting debt. He only found out when they were drowning in it. I have to protect the company money or we will all be in trouble. We are a close family and I love both my sister and husband.

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14 Answers

Pied_Pfeffer's avatar

Welcome to Fluther!

It’s time to take a step back from the emotional attachments involved and present the facts to those who make the decisions. If their conclusions and/or follow-through do not sit well with your ethics, then it is time to find another source of employment.

That may sound harsh, but it is the only way that you will find a way to not experience more anxiety over the situation as it escalates.

DLEBLANC's avatar

This a family business in which I own 70% and am the only real decision maker. My sister-bookkeeper owns 20%, and another sister with no involvement owns 10%. Our father founded the company. I know both my parents would be shocked and devasted if they new this. We are a very close family but my sister has let her spending ruin a very good working and personal relationship.

LuckyGuy's avatar

i assume this either your business or it belongs to someone very close to you.
Your sister is going down the drain and will gladly drag you with her. If you let her continue stealing it will only get worse. The end result will be the same: you will only have the money she cannot touch.

So… Immediately, (meaning tonight after work) do the following:
Change all account passwords.
If she has access to credit cards cancel them and report them stolen.
Talk to the bank about getting a new checking account.

You need to do all this BEFORE you confront her. Her problems have sapped her of morals and she will try to get money some way.

Do not tip your hand as she can, and will, act faster than you can imagine.

Pied_Pfeffer's avatar

Since you are the decision-maker, it is your responsibility to address the situation. If I were you, then I would approach it softly with your parents because it sounds as if you need their buy-in. “Mom and Dad, I have proof that an employee is embezzling from the company.” Work it from there, based upon their responses.

Another tactic may be to hire an outside company to do an audit. It could take the pressure off of you blowing the whistle in a manner that is more accepting.

Take comfort in that you aren’t the first to experience this. It’s an emotional lesson to go through,

talljasperman's avatar

Send her the bill for any money’s that she took. You can take it out of her pay.

Zaku's avatar

I’d take away her access to the checks at all, and get her and her husband into a conversation about how they can get out of debt (I would assume bankruptcy would make sense to start with). If you know what she took, I’d add it up, have a conversation where it’s acknowledged and forgiven but not tolerated to continue, and it does need to be made up by somebody. I would talk with a 3rd party to get yourself straight about responsibility. I agree with Pied Pieffer that you’re partly responsible, to the degree that I wouldn’t make it into a hostile confrontation where you’re insisting she pay it back directly, or removing her from her job, as she’s probably been panicked and operating at a dysfunctional level for some time now. My main concern would be getting them on the path to recovery, and correcting whatever’s been causing all this. It’d probably be worth finding some professional help with managing the situation – counselors, arbitrators, as long as they are good talented people at it.

JLeslie's avatar

Does she feel she is not paid fairly? Not that it is ever ok to steal, I just wonder if she feels she does a lot if the work and should be making more.

Even considering my question above, my gut reaction when I read your Q was, she is a thief, and possibly a drug addict. Is she an addict? You will
Have to confront her, what choice do you have?

Buttonstc's avatar

You said that her debt and money problems are self inflicted. Therefore, the underlying problem is likely due to either drug addiction, gambling addiction or compulsive shopping (also addictive behavior).

She is clearly out of control as evidenced by her totally unjustifiable stealing from family members. As you’ve discovered, your toleration of this behavior is merely enabling her and not helping the situation at all.

I strongly urge you to follow the advice of Lucky Guy regarding changing accounts, passwords and whatever else you need to do to protect the business. Since you’re the majority owner, you don’t need anyone else’s permission or agreement to do this.

It is YOUR fiduciary responsibility to protect the business from any further money drain. And you MUST do this PRIOR TO any discussion of this with either her or other family members.

Your parents, although well-intentioned, may immediately get on the phone with her to try to resolve things. You must have the business accounts protected from any further embezzling.

And, yes, that’s a dirty word but it is what it is, family member or not and carries legal penalties with it. You need to start being rigorously honest in your language to yourself so you don’t keep tolerating it.

Once the business assets are protected then you have the time to begin problem solving on the most compassionate and helpful way to deal with the roots of the problem (which might possibly involve a long term treatment center.)

For someone to act as your sister has done, there HAS TO BE some very deep dark addiction-type issues underlying it all. People don’t just betray family members on a frivolous whim.there is something underneath it all and hopefully she will be relieved to being forced to bring things into the light and begin to deal in honesty. She certainly can’t be feeling very good about herself and the dysfunctional decisions she’s made.

Yes, she does need professional help buy prior to that, you NEED TO PROTECT the assets of the family business.

Welcome to Fluther and hopefully you’ll find help from many of the people chiming in on this Q. It’s a serious situation you face but at least you’re now ready to put a stop to it rather than allowing it to continue out of misguided love for your poor sister who is clearly in over her head.

And, you either need to hire a competent bookkeeper or have you or another family member take that position. That’s down the road apiece but at least you can start considering possible candidates now.

LuckyGuy's avatar

@Buttonstc and I are on the same page.
You have to act quickly and decisively BEFORE you bring this up to anyone, even to your parents.
If you let your sister know this is happening she will very likely do damage by either trying to destroy evidence or cleaning out bank accounts.
Don’t let it happen.
She has a problem/disease/addiction. Isolate it quickly. Don’t let it spread to you and the rest of your family.

DLEBLANC's avatar

Thanks everyone for the kind replys. I am in the process of collecting data for my accountant to review so we can be sure of the extent of this activity. I think she is seeing herself drowning and is desperately trying to stay afloat and will drag anyone else under to save herself. I think she knows I am aware of her actions and will probably relent for now. After I have gathered all the facts I will confront her with an ultimatum. Its hard enough to run a business without this added pressure and distraction. If I can’t trust her she will have to go, and we’ll have to deal with the personal repercussions. It’s a very delicate situation when loved ones are involved. A WORD OF ADVICE: If you want to go into business keep friends and family out of the picture.

Pied_Pfeffer's avatar

@DLEBLANC As bad as I feel for you having to deal with this situation, I have to disagree with the last sentiment. I’ve seen several successful family-run business. I’ve also heard about a friend’s family-owned car dealership who had a beloved accountant for decades that started embezzling. $45K later, they finally picked up on it.

The bottom line is that there have to be checks and balances in place. If not, it opens the door for an employee, even a family member or friend, to take advantage of it.

Please keep us posted on how it plays out. You’ve got our support as you deal with this.

JLeslie's avatar

So sorry you have to deal with. Must be very stressful.

LuckyGuy's avatar

@DLEBLANC Please have records and backups made ASAP! She might try to cover her tracks. If she can’t do it elegantly she might use slash-and-burn techniques.
Make copies today!

ibstubro's avatar

I agree with @LuckyGuy. First you need to make back-up copies of all company records, then you need to limit her access to company funds as much as possible, including having her computer access restricted.
Then you can bring the issue up with her. If you think you can come to an agreement, then you can gradually allow her to re-gain access. The chances of a confrontation turning out well are poor. Make sure the company assets are covered.

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