[nscoppe]

my business partners and i formed a corporation with another corporation. So the LLC was formed by there corporation owning 55% and our corporation owning 45%. We invested 60k in this business with one of the owners of the other corporation having charge of the monies. He told us the monies were going to certain entities when in fact i checked on it and the monies didnt go there in fact these entities said there wasnt ever an account set up. this is in the sum of approx 25k. The money is gone and he can not account for it as going through our corp. We would like to know what are rights are and what penalties he would face. I know jail time is potential but how much jail time. oh and i found that the very first journal entry is fraudulant so doesnt that mean that he/they searched for an invester for the intent to committ fraud?

[aaron]

Do you believe that the entire partnership was part of a fraud, or do you believe that the other business was also involved?

The exact charge which would be filed depends upon both state law and the full facts of the case. Possibly embezzlement or larceny by false pretenses. If the person has no criminal record, jail time may be minimal or suspended, although he will likely be ordered to pay restitution.

I would venture from what you describe that, if they dig into this person's other financial dealings, they may well find a pattern of similar conduct.