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Thread: Fraudulent orders - who carries the can?

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    Angry Fraudulent orders - who carries the can?

    At the end of August I suspended an employee on suspicion of acts of fraud and/or theft. She was subsequently found guilty (admitted guilt on all charges) at the subsequent hearing and was dismissed.
    Now a few suppliers have contacted us about outstanding payments. I have requested copies of orders or at least order numbers, but there have been none, the suppliers claim that they processed the orders made by email in one case and telephonic requests in the others.

    One does have a delivery note signed by the ex-employee, although there is no evidence of an order being placed.(cost about R1400)

    In another instance there is an email that appears to be requesting an item to be installed by one of our suppliers, which says "please go ahead, order to follow".(cost about R10,500.00)

    In all cases the clients apparently paid cash to the ex-employee, but either false invoices, or no invoices at all, were issued and no monies were received by us.

    We have been doing business with these suppliers for over ten years. We always issue official orders to suppliers for goods required, whether the cost is R5.00 or R55 000.00. They all know that we only work with official orders.

    Who carries the can? Am I responsible for all and any criminal action carried out by my employees?

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    Moderator IanF's Avatar
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    Legally you would have to get all the facts and take it from there.
    I would be inclined to pay the suppliers unless you think they are part of the fraud. But only after you get a proper paper trail so you can lay fraud theft charges against the ex employee. The other thing to do is check with your insurance broker to see if this is covered.
    Only stress when you can change the outcome!

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    Platinum Member sterne.law@gmail.com's Avatar
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    The employee is under your control and acts as your agent.
    The suppliers have delivered and you have to pay them.
    The payments received have been received.
    Unless you can show the other party was aware and part of the fraud then it is what it is.
    You have to claim against employee. If they have a pension or provident fund with you, you can have a payment frozen pending a criminal investigation
    Anthony Sterne

    www.acumenholdings.co.za
    DISCLAIMER The above is merely a comment in discussion form and an open public arena. It does not constitute a legal opinion or professional advice in any manner or form.

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    Site Caretaker Dave A's Avatar
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    Quote Originally Posted by Richard S View Post
    They all know that we only work with official orders.
    Given the "irregularities", may I suggest you take the opportunity to insist on receiving sworn affidavits from these suppliers before paying.
    Who ordered and how.
    And who received the goods/services.
    The trouble with opportunity is it normally comes dressed up as work.

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    I agree with Dave and Anthony, but I must also comment that many companies, and certainly all of the larger ones, simply do not pay without an official order, despite POD and absolutely all other documentary evidence.

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    Thanks everyone for your advice and comments. I will definitely insist on affidavits in some cases, as we know it sometimes takes two to tango. Perhaps even from the guys I know personally, because their staff would have been involved and they would be none the wiser.

    Clive-Triangle you are quite right of course, unfortunately most of my suppliers are far bigger than me! I do feel that I am morally responsible though, so I will probably simply pay the smaller ones and negotiate some sort of settlement with the others. Fortunately I know most of them personally.

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    Not sure if this should be in this thread, but thanks sterne.law, your affidavit template appeared at just the right time for me. Used it this morning when I laid charges at Milnerton SAPS and it made for a painless experience, unlike the one I had several years back.

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