Breach of Fiduciary Duty: Embezzlement
Fiduciary duty is built on a foundation of trust, loyalty, and good faith. When that trust is broken through acts like embezzlement, it can often lead to severe financial and legal consequences. If you have witnessed the abuse of fiduciary duty through embezzlement, it's important to work with an experienced attorney who can help you resolve these breaches.
The Parzivand Law Firm, PLLC, is experienced in handling breach of fiduciary duty cases, including embezzlement. Attorney Hessam Parzivand is committed to providing tailored legal solutions for fiduciary and business law matters.
If you suspect embezzlement by an employee, partner, or other trusted party, The Parzivand Law Firm can help you understand fiduciary duty under Texas law and how an attorney can help.
What Is a Breach of Fiduciary Duty?
Fiduciary duty refers to the legal responsibility one party holds to act in the best interests of another. For example, in a business context, this duty can exist in relationships such as:
Employer and employee
Board members and shareholders
Trustee and beneficiary
Attorney and client
Business partners
A breach of fiduciary duty occurs when the fiduciary puts their own interests above those they are obligated to serve. When combined with embezzlement, this breach often involves theft, fraud, or mismanagement of funds. Embezzlement allegations complicate these situations and generally require careful investigation and legal action.
How Fiduciary Duty and Embezzlement Intersect
Embezzlement within a fiduciary context is not only a betrayal of trust; it is a violation of Texas state law. In Texas, embezzlement can take various forms, including, but not limited to, the following actions.
Misappropriation of company funds or assets
Unauthorized transactions for personal benefit
Deliberate manipulation of financial records to hide theft
Diversion of resources meant for business purposes to private use
Failing to disclose conflicts of interest that lead to financial gain at the expense of the company or stakeholders
Exploiting confidential information to commit fraudulent activities or gain a competitive advantage
These actions can result in significant financial losses, damage a company's reputation, and disrupt its operations. Victims of fiduciary breaches involving embezzlement have the right to pursue compensation and hold those responsible accountable for their misconduct.
Texas Law and Fiduciary Duty
Texas law provides clear definitions and remedies for breaches of fiduciary duty, including embezzlement. The courts acknowledge the existence of fiduciary duties in both formal and informal relationships. Informal fiduciary duties often arise in close relationships of trust, such as familial ties or longstanding business affiliations.
However, the law also applies more formally in professional settings, including partnerships, trustee arrangements, or corporate governance. Under Texas law, individuals or entities filing a claim for breach of fiduciary duty, including cases involving embezzlement, must be able to prove the following criteria:
That a fiduciary relationship existed
That the fiduciary breached their duty
That the breach caused damages
Texas courts also consider statutory violations, such as theft or fraud, that intersect with fiduciary breaches. Depending on the nature and severity of the embezzlement, criminal charges may also apply, often accompanied by civil lawsuits seeking financial restitution.
Signs of a Fiduciary Breach or Embezzlement
It is not always easy to identify when embezzlement or a breach of fiduciary duty has occurred. However, being aware of the warning signs can prevent significant losses. Some red flags to look out for that could suggest embezzlement is taking place include the following.
Sudden, unexplained discrepancies in financial statements
Unapproved or suspicious transactions
Overly secretive behavior from fiduciaries
Missing documentation or unauthorized changes to contracts
Declining productivity or performance tied to missing funds
Lifestyle changes that seem inconsistent with known income levels
Reluctance to provide access to financial records or delays in reporting
Frequent errors in bookkeeping or unexplained adjustments in accounts
Transactions involving related parties without proper disclosure
If you suspect a fiduciary breach or embezzlement, consult an attorney immediately to protect your interests and increase the likelihood of recovering your losses.
How an Attorney Can Help with Breaches of Fiduciary Duty
If you’re facing a breach of fiduciary duty involving embezzlement, it's important to speak with a skilled business law attorney. An attorney will listen to your story to better understand your circumstances and tailor their services to meet your needs. Some of the ways an experienced attorney can help include the following.
Collecting evidence: Gathering proof of the fiduciary relationship, the breach itself, and any resulting damages.
Legal claims: Filing and handling lawsuits in accordance with Texas fiduciary and theft laws.
Negotiations or trial representation: Helping you work toward a fair settlement or representing you in court where necessary.
Assessing damages: Evaluating the financial and non-financial impact of the fiduciary breach to determine the scope of harm.
Providing strategic advice: Offering tailored legal strategies to maximize your chances of a favorable outcome.
Enforcing judgments: Making sure that court rulings and settlements are effectively implemented and that compensation is fully recovered.
Business Law Attorney Serving Stafford, Texas
A breach of fiduciary duty is a serious crime. However, these situations can be more complicated when they involve embezzlement or other abuses. The Parzivand Law Firm strives to help you overcome these challenges through committed legal solutions.
With a background in human resources, Attorney Hessam Parzivand takes the time to provide meaningful advice and client-focused solutions. From breach of fiduciary duty to business disputes, he represents residents and businesses across Stafford, Sugar Land, and Fort Bend County. Contact the firm today to schedule a consultation.