QUESTION
I work for a company that routinely charges customers for dies on new products. About 500,000.00 a set. But they never ordered these new dies.
Asked on May 24th, 2012 on Business Law - Kentucky
More details to this question:
They run the products on other customers dies. For instance I have been asked to engrave one customers part number and property of ( this customer) on dies that run other products. As well as photograph these so my company can get paid. What laws are being broken here? Federal or state fraud, theft?
2 ANSWERS
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I am a California attorney not licensed to practice law in Kentucky and the following analysis is not legal advice but is based on generally applicable legal principles. As a civil matter there is probably no liability for following instructions about engraving and photographing part numbers. However, as a criminal matter, knowing or suspecting that you are perpetrating a fraud to obtain money for the benefit of your employer may subject you to liability for conspiracy to commit fraud, and since the amounts involved are very large, the potential penalties are significant. There would be no substitute to consulting Kentucky legal counsel as a follow up to this analysis.
Answered on Jun 14th, 2012 at 11:27 AM
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This sounds like common-law fraud and, if your state allows such a claim, statutory theft -- assuming all of your facts are exactly as you portray them. Nothing prohibits a manufacturer from selling used dies and charging for them, even astronomical amounts of money. However, a seller cannot legally sell other people's property.
Answered on May 25th, 2012 at 10:23 AM