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A startup committing fraud and embezzling money

I recently worked for a startup for several months. While there I’ve seen the founders pocketing large sums of money, stealing from the investors, and lying to the investors and users. There’s so much going on, I kept a journal … Facebook messages, text messages, and so much more. I have so much proof, but don’t know where to turn. I’d love to possibly post a story, but is there also a place I can turn to, to report them, to warn future investors, and more? Something SERIOUSLY should be done … and I’d like to see justice served. It’s beyond belief and they’re still getting away with it. ALL of it.

  • You must act, but act surreptitiously. If you know that fraud is being committed, then you must act. You have two options:

    1) Do nothing.

    2) Report them to the FBI because, as you described, RICO laws are being violated.

    Pum

    P.S.: As a lawyer that never practiced, I think that my advice is right, but you have to make the right decision for yourself.

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  • I think you should act. If there is a fraud and the co-founders succeed then they are poisoning the entire system. It will impact all of us.

    If you are uncomfortable talking directly to the Investors, then you should anonymously tip them off. But I would suggest talking directly.

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  • You can fairly easily contact media outlets about this if you’d like to go that route. Many journalists and publications have ways to contact them on their sites and if you mention what you did here I’m sure you’ll get someone to bite on the story.

    That said, this situation is most likely a crime and you should be able to contact law enforcement to review your suspicions.

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  • I’d talk to the investors – express your concern, and say that you just want to be sure that you aren’t misunderstanding. I’d consider asking one of the suspects too – I’d really be careful to be sure that you aren’t misunderstanding anything.

    How large are the large sums? 6 digits, 5 digits, 4 digits? Depending on the number of digits, there might well be perfectly reasonable explanations – especially since 6 digit expenses are more than large enough to show up on the books.

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