What can I do if I just found out that my secretary, who has POA of my small business, took out title loans on my business vehicles and they are now in default?

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What can I do if I just found out that my secretary, who has POA of my small business, took out title loans on my business vehicles and they are now in default?

I did not authorize this and was unaware due to traveling with the business. What are my options as far as pressing charges against her. I’m sure there are other legal issues that will surface, however, I am out of state and need advice.

Asked on December 3, 2014 under Business Law, Illinois

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 6 years ago | Contributor

The problem is, if your secretary had was the attorney in fact (recipient of the POA), she presumably had the authority to do what she did; and she would also seem to have the authority to 3rd parties, like lenders, acting in good faith, so she would have had "apparent authority" (which 3rd parties may often rely on) as well. In short, based on what you write, the loans were probably legal and therefore you have to deal with them as if you had taken them out.

The above, said, even if the loans are enforceable against your business and its vehicles by lenders who acted in good faith in reliance on a POA and apparent authority, if the secretary diverted money to herself, she still committed a criminal act: conversion, which is a form of theft (diverting money or assets you have control over, but do not own, to your own benefit). You can and should press charges. You could also sue your secretary, for both conversion and breach of fiduciary duty (her duty as holder of a POA) to recover the money (or as much of it as she still has). Retain an local attorney in your town to 1) contact the police for you and start the process of pressing charges; 2) to look into a lawsuit against your secretary; and 3) to contact the lenders, since even if the loans are enforcable, you may be able to get a delay in any repossession or collections activity if you explain the situation, to give you time to deal with it. Get a referral to an local lawyer and retain him or her over the phone to start on this case while you are returning home.


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