Almost no one wakes up one day and decides to steal from their clients. It happens slowly.
It starts with a loss on Wall Street, or a bad real estate deal. The bills are piling up. In a moment of panic, a business owner decides to "borrow" funds from an escrow account or a client's capital just to cover the gap. They tell themselves they will replace it before anyone notices.
That would have been the case, if not for the fact that the next deal falls through. And the next. Suddenly, they are trapped in a cycle of moving money just to cover their tracks.
There is a simple question to ask yourself when managing money that isn't yours: Am I being fully transparent? If the person whose money you are holding cannot be told exactly what you are doing with it, you are likely committing a crime. A rule to live by.
Nugget: Client funds, investor capital, and escrow accounts are not your personal emergency safety nets. Dipping into them "just for the weekend" is the first step toward a larger lapse.
Warmly,
Rabbi Levi Landa
Director, Project 432
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These prevention nuggets provide general perspective about the law and do not constitute legal advice. The law often changes based on jurisdiction. For advice regarding your specific situation, please consult a licensed attorney in your jurisdiction.
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