VIC Deceived into Investing My Savings?

[Erin Valentine]

My partner of two years and I started up a company a year and a half ago together. I sold my house, (purchased prior to our relationship) to fund all the start up costs and I have made most of the ongoing financial contributions towards building the business to the point where it is now quite profitable although I have never received any type of wage or financial return and I am now left with very little savings left. I made the investment only on the condition that I was a company director a shareholder and no major financial decisions could be made without my joint authority.

My partner convinced me that this was the case and I have this in writing. He has obtained large contracts based on pitching me as his business partner. The money I invested has come from my personal bank account and has been put into a shareholders loan that I've discovered he has been using for his personal spending. I discovered that he obtained a loan against the company late last year without my knowledge which led me to the discovery through an ASIC search that I was not a director or shareholder rather he was the sole director and I was only named as a beneficiary.

When I confronted him with this information he became very aggressive and is now claiming that he didn't know, that he was under the same impression as me (being equal partner) and that the original accountant who set up the company must have done it without his knowledge.

I am inexperienced in business (he is not) and with this type situation and any advice would be greatly appreciated as I fear I've been deceived into investing the majority of my life savings under fraudulent pretences and I now have no authority to access or retrieve my funds.

 

[Rod]

As he is claiming it was all a mistake, tell him you are going to fix the mistake. Get the forms you need, fill them in and have him sign them. Prepare a proper shareholder agreement and loan agreement as well.

His reaction to this will tell you whether you will need the help of a solicitor to protect/recover your assets.

 

[Erin Valentine]

Thanks Rod I really appreciate it.
I have also discovered that he has been withdrawing cash/making purchases from my personal bank account (not joint) and has given my bank card and pin to other people to do the same for him without my permission, consent or knowledge. He has also made purchases on my daughters bank card. Given we are in a de facto relationship do I have any rights to get that money back or report this as stealing? I'm talking about a serious about of money, $51,000 in a period of three months alone. I have been left with next to nothing from the sale of my house, I have two children and he is now refusing to contribute to the paying the rent and planning to move out. I can't get full time employment to support myself and the kids yet as my youngest child is a baby.

 

[Rod]

Seems like he has seen you as a cash cow to be milked until dry of cash.

If you believe the relationship is over, think about reporting him to the police while also recovering as much money as you can. Based on your last post I suspect you will need to see a lawyer sooner rather than later. Yes, it is stealing. He has no right to touch your money without your approval. The sooner you act on this the better. If you leave it, it may appear to independent people (eg police, judge) that you allowed and agreed for the spending to occur.

Your partner is likely to do a runner as you apply pressure so get as many contact details of his family and friends as you can before confronting him (ie next day or two). Plan your steps out in advance and get your documentation together and kept somewhere safe. Change all your PINs.

You are in a bad place financially at the moment, and likely to get worse, but keep strong for your kids. See each step you take now as protecting yourself and your kids.

 

[Erin Valentine]

Thank you once again. I really appreciate your honesty, makes for a nice change. I'm meeting with a financial advisor and my accountant next week then I'll talk to lawyer before going to the police. Would you suggest commercial of family lawyer given the relationship?

 

[Rod]

At this stage, and keeping mind I only have a small amount of information to go by, I'd prefer a commercial lawyer. You firstly need to protect what you can, maybe make changes at ASIC, check out legality of business dealings and see if you want to/need to/or can take over the business before getting into family law issues.

Some lawyers can do both commercial and family law. If you can find one it saves repeating a lot of information (ie can save money).

You are not talking $Ms so you don't need a high priced city law firm. Maybe ask the accountant if he knows a good lawyer, accountants often work with solicitors.

 

[Erin Valentine]

Thank you yet again. All the best