h2g2 The Hitchhiker's Guide to the Galaxy: Earth Edition

Picture this (it's hypothetical). You've kept the books for this company for a lot of years. The senior partners see their approaching retirement and have nobody to take over the business, so they start looking for someone and eventually find someone who seems to fit the bill. Everything ticks along okay for the next few years, then this new bloke, who's going to take over, starts doing some crazy things. At first this causes some worry and irritation (especially to you, as he's started producing sales invoices on his home computer and customers are paying all sorts of unexpected sums of money and some are refusing to pay the invoices you produce... and he keeps saying he's going to give you copies of the invoices but never brings them in to the office (this eventually causes a row and, as far as you know, he stops doing it)). The crazy behaviour isn't really taken notice of by anyone else until it gets *really* strange. This is after the senior partner semi-retires and the next most senior partner is caused sleepless nights by all the lies and weirdness of this new(ish) bloke.

Then, one day, the sleepless partner asks you to dig out an old invoice for him - and behind this old invoice you find an expenses form from the mad bloke, out of batch number order, check it and find a fuel receipt missing from it. You already have reason not to trust this creep with his expenses and have had to tell him in the past not to pin photocopies of his fuel receipts to the expenses because there can be no reason to photocopy a perfectly good receipt and it would instantly make the VAT Inspector suspicious and ask questions that you wouldn't be able to answer, like: "where's the original and why was it necessary to use a photocopy and why are there so many photocopied receipts?" He also started trying to use the other copy you get when you pay with your credit card - the one that has "This is not a VAT receipt" emblazoned across the bottom... so you couldn't get the VAT back. You had to tell him about that too. (The partners speculated, because they had no idea what he wants these original receipts for, that he was probably giving them to his wife to claim from her council and the council bookkeepers probably wouldn't put up with photocopies or non-VAT receipts either.)

So you look a bit further and find more missing fuel receipts, taken from the expense forms that this person has already been paid for. So far the extent of the hole in fuel receipts comes to more than £1,000 worth. You are, of course, absolutely seething. He seems to have been trying to make a mess of your accounts for years - and now this! If it was down to you the police would be called and he'd be out. The senior partners are desperate to retire though - for small businesses, red tape makes work horrible. The one great skill (if you can call it that) that Mr Sneaky has, is he's a very boring individual who doesn't mind going through the telephone-directory-sized contract questionnaires on health and safety, risk assessment and all the rest. It's a job everyone loathes and all they want is out. So you've emailed him a demanded for the return of all the missing receipts and told him that if he's already disposed of the receipts he'll have to pay the money back and you'll just have to make a journal entry to reverse that expense in the accounts and reimburse HM Customs. You've also asked him as nicely as you can manage through your gritted teeth, if he would be so kind as to simply tell you straight, the true size of his fiddle and save you all the time, trouble and headache of going back through every paid invoice file (there's a mountain of them) right back to the time he was taken on as a partner. He has given no reply. A new lock has been fitted to the accounts office door.

Now you and the partners mean to send him a warning letter. And this is my question: what should go into such a letter? Anyone... please

I have no advice, just sympathy.

That is a question for the lawyers retained to protect the interests of the company.

I would tell the other partner that if they want to protect their retirement fund they should call in the fraud squad to investigate now! If you've been able to find at least £1000 missing already, I'm sure there's a hell of a lot more that a full investigation would uncover, especially if, as the partner thinks, the man's wife is possibly trying to make false claims as well. They need to act now, no matter how inconvenient it is. This needs to be in the hands of the company solicitors quickly.

PS. Don't bother writing to him, if his response to the email was to change the lock on the accounts door, he certainly won't take any notice of a letter.

Thank you Radox, Witty and Milla. To fill in a couple more details in this hypothetical nightmare:

This is a tiny company - you and just over a dozen others - and the time wasted, disgrace and expense could kill it off altogether. Confidence is everything in business - especially in this economic climate. The employees would all be out of work. The pension situation in Britain has been a disaster area for years now - and this was the old partners' answer to that problem. So bang goes their modest little pension, as they thought it would be... and their own silly fault too, you might think, for being so generous and trusting to a man who only did a convincing impression of being an honest, regular bloke. Time seems to have run out. The horrible truth about the final partner was discovered too late.

The lock was changed by the other partner, to keep the criminal nut case out of the accounts office.

I used to work for a firm that also had a guy like that. He wasn't even a partner, just worked in the office. They 'officially' found he had 'lost' £10,000 of company money in the 6 months he had been there. My boss said that after seeing the size of his house and the new Mercedes on the drive he thought he had probably fleeced his previous firm too. That guy did time for it, rightly so. Scandal from something like this rarely hits a firm as badly as the bosses think it will. It's letting it go on that causes firms to collapse. If anything the publicity from the trial will probably boost their sales. Ours certainly went up, people calling in to find out a bit more etc.

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NO. NO. NO!!! Did I make myself clear enough? NO!

The absolute first thing that you do is engage your accountants for a rapid, targeted audit. If they are any good, they'll find enough irregularities to build a case instantly. Expect to pay £500-£1000.

Once done, instruct your lawyers to send a letter telling him that his employment is suspended while a police investigation takes place into financial irregularities. Expect to pay £200-400. Call the police the minute that letter is sent - this is not a civil matter (ie you gave some extended credit and the client didn't pay) - this is theft. Criminal theft.

Expect the police to be disinterested until they receive your accountants calculations.

Do not under any circumstances fudge the issue with partners going for the easy options, ie hoping it'll go away. And don't let them send *any* warning letters.

You're a small company, but by the sound of it a successful one. There'll be enough in the bank and enough loyal customers to see this through. It'll be tough, but you'll survive it as long as you engage the professionals. This is the time *they* earn their money to get you out of the $hit.

My sympathies - I've been there.

Another danger with a warning letter is that unless it can be backed up with hard evidence, you could suddenly find him turning round a sueing for libel.

This is a potential legal mindfield and you *have* to get proper advice on how to do this properly.

Removing a bad apple from a barrel isn't going to put people using the barrel...especially if some apple auditors and some apple police have said all is well with the other apples in the barrel.

And this hypothetical guy seems to have only taken from the company rather than customers?

Follow the advice given - don't send letters etc - it's a criminal affair...and as has been seen by MPs and Peers going to jail...it is dealt with.

One of my dad's old employers got put away for business fraud years ago.

Thank you all very much for the helpful and thoughtful answers to this hypothetical problem. There's plenty to think about.

In hypothetical situations like this, you just don't know who to talk to about it. For one thing, it's unfamiliar territory and for another, it's almost like a taboo subject. Everyone's so confused and upset... hoping it'll all evaporate away like last night's ghastly nightmare. They fear that your digging is going to reveal more and more of this dim-wit's scams and they'll never be able to escape to a peaceful retirement. And they can't believe the person who was going to be handed the business on a plate, would ruin it like that for trivial short-term gains - and all so clumsy and badly hidden too...

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Have you actually been this forthright? Part of me wants to say- well done you, the other part wants me to say - shut up!

Personally, I would ask the sod to resign & sign a contract that had absolutely no come-back on the present company, as well as aknowledging that there would be no reference to a potential new employer. However, I realise this would be effectively letting him off the hook, but his next employment expectations would be ruined.

Best thing to do is take it under legal advisement - as bad (or as good) as that may seem. Your company & the partners need to be seen to do the right thing, if only in the eyes of the law, therefore they should follow any advice given. This would seem to be the best way to avoid any legal come-back from the potential plaintiff.

as this is all hypothetical

knee-cap him with a black & decker when you give him his p45





hypothetical

as this is hypothetical, I'll throughly agree with Taff, Agent of Kaos. Get "an aquaintace of an aquaintance" to beat the daylights out of him. Alledgedly. What do I know about the law?