Off topic legal question.

[GixxerSixxer87]

Say someone owns a mechanical service company. Now say one of the part owners of this said service company works at one of the places where said service company does service work, and is also in charge of paying the service company ( that he is a part owner of ) for the work being done by said service company. basically approving money being transfered to the company he owns, thus putting that profit in his pocket. Now the rest of the people at the company he works for has no idea that he is part owner of the company doing the service work. This cannot be legal.

 

[mike100]

Certainly a conflict of interests, but illegal? Not sure as you are getting into the muddy waters of business law, and really need a lawyers interpretation to determine that.
But I do know of similar cases where people were fired over this type of thing.

 

[turbodish]

If the work is being properly performed and payment is in line with industry standards for that work, there is nothing overtly illegal about it. The problem is more one of appearances in that case.

However, that part owner is in a position of material conflict of interest. If the other part owner or owners are aware of this and have no issue with it, then there is no issue. If they are not aware though, that part owner is sitting in unethical territory. However, unethical is not always the same as illegal.

Where it does get dicey is if the part owner is approving payment for work not done, or approving excess payment for work that is done. Either could be considered a form of embezzlement. If this is happening and it can be proven, that part-owner could be taken through civil and/or criminal proceedings.

 

[Rob MacLennan]

Depends on where said owner works. If it's at a public office, then legal conflict of interest guidelines would likely attach. Other than that, it's conflict of interest which may or may not be against policy, but wouldn't generally be illegal.

 

[turbodish]

Say someone owns a mechanical service company. Now say one of the part owners of this said service company works at one of the places where said service company does service work, and is also in charge of paying the service company ( that he is a part owner of ) for the work being done by said service company. basically approving money being transfered to the company he owns, thus putting that profit in his pocket. Now the rest of the people at the company he works for has no idea that he is part owner of the company doing the service work. This cannot be legal.

I had to read that again. Definately a matter of material conflict of interest. Definitely unethical to not inform his employer of that conflict of interest. Not necessarily illegal unless he's authorizing payment for work not done or authorizing excess payment for work that is done.

 

[GixxerSixxer87]

thanks for the info guys. Im not sure if the payments = the work being done but i wouldnt be surprised if there was a lil extra involved. shysters.

 

[Brian P]

For certain types of professional work (engineering, for one), there are legal requirements for such conflicts of interest to be declared.

I know of one business owner who is embroiled in a huge lawsuit that has been going on for years, because of this sort of thing. I know of a few people who left the employment of said business because they didn't want to have anything to do with it, once they got an inkling of what was going on.