Need clarification on how to approach a potential fraud situation in a startup. – Upwork

Hi there,

I have some concerns for a friend to help him find out if there are any legal implications or actions he should take.

I have a friend (let's call him Tom) who is the tech cofounder of a payments service startup with another cofounder (John). Recently, Tom discovered that one of the designers was using photo editing software to change some figures on a bank statement. After investigating further, Tom found out that John had instructed the designer to change some numbers on the bank statement as well as fabricating a few invoices so John can use them to apply for a payment processor and be approved for the underwriting much easier than the startup's intended business model.

Tom has confronted John and John thinks it's ok to break some rules for the survival of the startup. When this issue was brought up to some others in management, others think it's alright too since the business is operating in the Philippines and they wouldn't be held responsible for any of it.

Here are some additional details about the company:

The company have two entities, one is a US, S-Corporation, the other is a Philippine Corporation. The Philippines entity is a subsidiary of US corporation.

Both Tom and John are US citizens. All other employees are employed under the Philippine entity. The office and the operation is based in the Philippines.

What's the best course of action for Tom?


Budget: $60
Posted On: January 16, 2019 11:13 UTC
ID: 215199384
Category: Legal > Criminal Law
Skills: Legal Assistance, Legal Consulting, Legal Research
Country: United States
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