When/How/Do I blow the whistle? (long)

In My Humble Opinion
1

OK, this is a little complicated, but bear with me, if you will.

To make it as simple as possible, I work for a man who is an “owner” and certainly the “boss”, but is still not the entire company. He’s in the process of buying the place I work at, but hasn’t paid it off yet, and still must answer to the real boss. We’ll call my boss Chaz, and the real boss Mike.

Now Mike doesn’t really know me. I’ve worked for him, essentially, under different “owners”, for 9 years. He’s an invisible owner, and apparently I’ve been invisible to him. I see him about twice per year, and each time he introduces himself. For the last 3 years or so I’ve said “Yes, Mike, we’ve met. I’m Sami.” He then always replies something to the effect of, “Yes, of course, you’re Sami.” He might my know name on paper, but doesn’t really know what I do for him. Until two years ago his partner kept in touch with all of his “Owners” and Managers (that’s what I am). But, then, his partner died.

So, I work for Chaz, who is buying the place from Mike. Chaz is supposed to pay Mike X amount/month, plus a percentage of the profits. Chaz also has a partner, who happens to be his ex-wife (they were still married when they got into this, now they’re divorced, but still business partners). There is at least one other partner, although I think she holds only 3 or 4 percent.

This is my issue: Chaz constantly takes quite a bit of cash out of the till whenever he has the need for cash. This is quite often. We did some math and estimated 50K/year, minimum for the last 3 years. What he does with it, I don’t know. He does this just by ‘voiding’ $$ out of the register.

This bothers me on several levels. For one, he’s no longer paying gross reciept tax on that money. For two, both of his partners are getting screwed on their cut of the profits. Thirdly, Mike, the real owner, is not getting his real percentage. On top of that, I’m supposed to make sales bonuses, but my bonuses are based on profit margin, and when Chaz decides to take 10% of my weekend sales it’s certainly going to effect my margin. I haven’t gotton a bonus in 4 months, even though real sales are up. His ex recently lectured me about the profit margin being down. I knew why it was down, but kept my mouth shut. We’ll just tighten the belt some more, I thought. So yeah, this is costing me $ as well.

Mike, and the other partners have no idea this is happening, and Chaz assumes I’ll keep my mouth shut.

So, at long last, after better than 3 years of this nonsense, here’s my dilema:

I want to turn Chaz in, to his partners, to the IRS, to his boss. The problem is, if I do I’ll certainly be fired. The one guy who’d give me a good reference (Mike’s Late Partner, mentioned above) is dead. Mike doesn’t really know who I am. Chaz’s partners are minority partners, and might suffer themselves if I blow the whistle, which probably wouldn’t make them happy with me.

I’m planning on leaving town anyway, so I don’t mind losing the job, but I need the job reference from someone in the company. I’ve spent most of the last 9 years with this company. I’m great at what I do, but who’ll believe me without that reference? At the same time, I’m sick of being a party to Chaz cheating everyone around him.

And, I’m a little afraid of being a party to his theft. He’s my boss, what can I do? Theoretically it’s his money. And he is the boss, I can’t tell him ‘no’. But, will I be in trouble (legally) for keeping my mouth shut? It is tax evasion, after all.

So, do I wait until I leave to say something? Never say a word? Somehow do this anonymously? Any suggestions are welcome.

Thanks in advance.

~S

2

I’d tell the partners and leave it to them whether to get the IRS involved, but that’s just me. I could only hope that one of the other partner’s would be decent enough to write a letter for you, but I don’t know them. Do you think they’ll blame you for this too? Or that you’ll simply be caught in a “kill the messanger” scenario?

3

I think there’s a whistleblower law that will protect you in such a situation. Do you have proof, other than just your word? Not that I doubt you, but a couple of digital pictures will go a long way with Mike and the IRS and the police.

4

Well, I think they might be upset that I didn’t tell them sooner. Until about a year and a half ago I thought they knew about this (it’s has been happening for at least 3 years, maybe longer) because Chaz told me that they knew, and I, stupidly, believed him.

So, I’m not sure. They might be happy that I clue them in, but I may be on the hook for not doing so sooner.

It’s weird, I feel like I’ve been stealing from them, just by letting him steal from them.

5

Ivylass/, I’ve thought about Whistleblower laws. I’m sure that’d help if I do turn him in, but I don’t think that it would help me get another job. I’ll look into it, though. That’s probably something I should have researched a while ago.

As far as proof, I don’t have anything concrete. I do have documentation, however. I write down every penny I see him take, but it’s still his word against mine. I think the other managers would back me up on this, but either way, I’ve been writing it down just to cover my own ass. I’m afraid of someone accusing me of taking that cash, so I write down whoever does take it (he or his General Manager/lackey), and how much. I don’t know how that might stand up in court, though.

6

I’d turn the guy into the IRS.

And, if you can afford it, talk to an attorney before talking to the IRS - the whistleblower law ivylass mentioned may come into play.

I wouldn’t worry about the reference, most companies can’t and won’t give them nowadays, so no one really expects them. Get it from a client or someone else who worked there that will give you a personal/professional reference. I’ve done this a zillion times where my reference is more of a work buddy - and I’ve given references for former work buddies.

7

Can you prove the embezzlement (because that’s what it is) by balancing cash register tapes showing sales versus the amount shown received in? If you can prove it and explain to the partners that you’d been lied to by Chaz, you might have a chance to keep the job. Since it’s causing you to be uncomfortable in your job, it would be worth it (for me anyway) to do what you could to change it.

StG

8

This may sound a bit cowardly, but if you are planning to leave town anyway I would suggest that you just do so and let it go. Generally speaking, whistleblowers get screwed.

9

I’d take BinaryDrone’s advice a little farther. Leave town, get established in a new job, then call Mike a few months later & tell him what Chaz was up to.

If they care, they’ll take action against Chaz. If not, they won’t. That’s their call and you don’t care which way it goes at that point. If they don’t quite take your word for it then they may set up hidden video surveillance (scarily easy to do nowdays), and catch him on their own.

Any objective investigation of the books will show that the stealing didn’t change when you left, so you can’t (practically) get accused of being the culprit. That’s the reason for waiting a few months before telling Mike.

10

Sami41, I feel for you. There are almost no good outcomes for your situation. I personally would recommend getting settled into a new job, talking to an attorney at great length about the legal boundaries of libel, slander, and defamation of character, and then considering notifying Mike. I would also make suire your legal and financial records are absolutely squeaky clean, before doing anything, especially if it involves the IRS.

Whistleblower laws or not, in my experience the whistleblower is always the one who winds up being screwed in the end. Potential employers will not be lining up around the block to hire a whistleblower. Most companies have something to hide, and they’d prefer not to have someone ethical and honest on staff who will force them to confront the issue. Sad but true.

11

Good point, thanks.

To answer your question StGermain, I can’t prove anything beyond a doubt just by the books alone. I’ve got evidence, but not solid proof. If Mike knew it was happening, he might be able to catch him with the security tapes, but of course, Chaz could erase the tapes or just shut off the cameras if he knew they we’re on to him. He’s done that before, for other reasons.

Thanks all, for your advice.

~S

12

I’d make every attempt to make certain that you are seeing what you think you are seeing.

As a business owner myself, I often raid the cash, for one reason or another. I also do the books myself, so I know exactly where it’s going.

If the company has any kind of bookkeeping system at all (and if I was a partner in a business in any way, I’d be certain that it had a system), it will be easy to account for the missing money.

It’s almost impossible to not leave some sort of paper trail in business, and if it’s done and gotten away with, it’s got to be a lot more involved than voiding out some of the sales.

13

bare,

If it were legit, he wouldn’t void sales out of the register. He’d let the register fall short with a some sort of note to debit him. I don’t know what kind of business this is, but what he is doing make it look like “shrinkage” on the books.

14

Cash registers have tapes that one should justify with the totals. If he is voiding sales, it will obviouly show up.

Then there are the rest of the checks and balances that will vary from business to business. Any shrinkage should be pretty darn obvious to anyone checking the books.

Just sayin’ 10% or more shrinkage should be obvious to any partners.

15

Whistleblower laws protect employees working on government contracts (US, other countries YMMV). Since you’re working for a small business, I doubt you’re covered.

As mentioned before, whistleblowers usually get screwed over pretty good, even with protection laws. I second the idea of waiting until you’re no longer working for the parties involved, if you want to blow the whistle.

16

(bolding mine)
Who is we? Is there someone else who can serve as a witness to this?

17

Yeah, that’s another problem. The cash register system doesn’t have journal tapes and the software that runs the registers doesn’t work. I’ve wondered if the reason Chaz doesn’t upgrade is simply not to leave a paper trail.

As far as voids go, at the end of the day I get a report with the total voids from the day, but not transaction by transaction. So, there’s no way to prove whether he voided out cash or there were simply a lot of mis-rings.

nyctea, We would be myself and my assistant manager. He would back be up on this, but like me, isn’t sure if he wants to bring it up.

18

That IS a problem! But it might also give you a way of blowing the whistle, without giving anything away.

Maybe you could mention to one of the partners that it would be a “really good idea to put in a new cash register and check the books”.

Kinda gets you off the hook for making a direct accusation.

19

Supposedly, new computers/registers are “in the works.” I’ve been bugging him about it for a year and a half, because not only do they not work well enough for day to day operations, but I can’t even accuratly track my inventory with the POS’s we’re using (that can stand for Point of Sale, or the other POS, they’re both appropriate).

So, we were going to have them bythe “Fall” (college students back, 2003), then by last October, then by last November, then by the End of the Year, then by the End of January, then by the Beginning of Summer, you get the picture. I had a meeting with one of the other partners around the middle of July (04) and her words were, “by the end of the year.” “You said that last year,” I replied. She just laughed. I don’t know if that’s speeding up the process at all, but then of course, she doesn’t really know why I want them so badly. And, I can’t tell her.

Thanks again, all…~S

20

Is there a chance he’s got some sort of arrangement with the owner? Maybe they’re scamming the IRS together, but the “visible” guy actually does the dirty work.

At any rate, I’d narc him out. I had a friend who worked for a place that was cooking the books, and the IRS told her she could be held responsible as well. Even the “lowly” secretary isn’t immune to such responsibility. Good luck.