My small bizness is being investigated for fraud?

Question

Hi everyone

I own a small distribution company
we got a few bad loads of merchandise in
and 10 out of 100 clients last year did not get thier products and now they are all joining together on a forum and screaming fraud.

I have every intention to pay them I am also a licensed RE Agent so I hope to aquire the funds from another source to pay and I also sell on other online sites .but my clients are finding me online trying to make me look like a crook

I owe $30,000 in debt .
Do you think I should hire an Attorney
Please give solid advice if you want to ridicule please find another question

I am too worried too take the wise cracks

Thanks

I know it sounds like I am a crook

but I am in the salvage /surplus industry
I buy merchandise from the department stores that is damaged and returns and some overstocks. well it just so happens that
this summer I got some really bad loads

the problem is I broker these loads

i sell direct from the distribution center to my clients.
and I use my clients money to buy the loads my profit is very little after shipping and buying the truckloads

so when it comes to paying a person back for the load I am not really in a position to do it and the loads are often so bad they have to be trashed and are not worth shipping I mean 50% damaged. but some loads are good

I am working overtime to pay my clients back I just need a little more time
maybe a month or two
I have not gotten any notices from an attorney yet but the Attorney Generals office has contacted me and is requesting info & I think there is an investigator that sits outside my home watching me maybe not

Answer 1

Definitely talk to an attny. They will have valuable advice that is specific to your needs and your state.

Answer 2

You should hire an attorney.

I think the right thing to do is to explain the situation to your clients, and your intention to pay them back. An attorney may advise you to clam up. Frankly, you should listen to your attorney in this case. You need to move fast on this so that you can preserve your clients, your reputation, and quite possibly your business.

You also have a legal case regarding your bad merchandise, and you should be able to recover your losses. If you imported the goods, international law may make the case too complicated and expensive to justify your $30,000 loss.

This is one of the many risks of doing business. You win some, you lose some. I hope you don't give up because of this. Are your margins so slim that 90% of your good sales won't offset the 10% bad sales?

In the future, you need to calculate this into your price structure, especially if you are an importer and run these types of risks.

Answer 3

Your first obligation, of course, is to your unhappy customers. Have you done everything possible to re-assure them they will get their orders or have their money refunded?

If you have made serious efforts to rectify the situation, the law recognizes that. However, if this is a problem that has gone on for several months, your customers may have the right to sue you.

You should consult with a local business group (the Better Business Bureau might be able to help) to see if some sort of mediation can take place between you and your clients. You may also want to hire an attorney.

Answer 4

I'm shocked you don't have an attorney already! Why not???

You didn't say if you are incorporated or sole proprietorship, that makes a HUGE difference on where to go from here.

Find a really good business attorney tomorrow and take everything to them this week! He or she can contact your clients to negotiate a settlement with them, as well as your debtors to reduce your debt load.

And honestly, if they didn't get their products why didn't you refund the money right away? If you had already spent it on other things, that is really bad retail business practice and you might deserve a little of the aggravation you're getting now.

Get the attorney to deal with everyone, stop while you're ahead and start over older but wiser... :) good luck, Suz

Answer 5

Is their attorney screaming fraud? Once they get an attorney you will need to protect yourself. It probably wouldn't hurt you to know your legal position either. If they get the IRS involved, which is what I would do, be sure you have your returns forever. Keep your income tax returns and back up information forever. There is no statue of limitations on fraud for the IRS.

Why were you not compensated for the few bad loads of merchandise? If you have accepted payment from buyers and then not delivered the goods, you are a crook. You have enough money to still be in business so you are using their money without their permission. I don't know the amount that you owe them, but if it was me I would do my very best to ruin you for screwing me. What did you think would happen?

Answer 6

Why didn't you return the customers money immediately when you saw you could not fulfill their orders? Most of the information you gave would be irrelevant in court. The only relevant thing to your customers is they had paid you & did not receive their merchandise...the fact you received bad merchandise, where you get the money for refunds or your debt is inmaterial!

There is so much fraud on the computer most of us do go on line to let others know....until you refund to your customers you are a crook!

Answer 7

I absolutely think you should get an attorney. When the stress is on you, you are not at your best to answer questions and defend yourself. PLUS, a letter or phone call from an attorney has so much more effect than a letter from the common man from the street. Look at this website and see if we can be of any help to you.....then give us a call tomorrow (January 2nd). http://www.benderent.biz . Good luck.

Answer 8

get an attorney, pay these people back and send them an apology explaining it was not intended. and you hope to do business in the future with them. good luck and this year will be better for you.

Answer 9

you should contact everyone you owe and inform them of your intentions. then follow through. not following through is what causes these kinds of problems

Answer 10

30K is serious. Don't waste your time online- get a lawyer ASAP.