We know that our nonprofit club manager is forging checks and taking cash out of the register. The club would rather have the money back rather than

Your employee may have committed federal crimes if he has forged signatures on checks.  And he has committed theft which is a crime in all states.  It is entirely up to your club Board of Directors whether they want to prosecute the employee, and in most states, there is no law saying that the club has to file a criminal complaint.  But in some states, if a person is aware of a felony and does not report it to the police, the person can be charged with a misdemeanor crime. If your nonprofit club is related to state or local government activities in any way, or carries out quasi-governmental activities (such as a public school athletic association) and your club is charged with handling local or state public funds, in most states the failure to report to police any type of theft of public money would be a crime in itself. But the club manager owes the money back to the club whether or not the club files a criminal complaint. The Board of Directors of the club should be aware that they have a fiduciary duty to the club members, now that they know this has happened, to ensure that it does not happen again.  Filing a criminal complaint against the club manager is one way to discharge the Board's duty to protect the club and the club members.  In addition, the Board should terminate the employment of the club manager so that this situation does not happen again.   In most embezzlement situations, the police and prosecutors consider whether the money has been paid back in determining what charges to bring or what type of plea to accept, and the judge considers that fact in determining the sentencing for the crime.  The club will not be liable to the club manager's next employer if the club does not file a criminal complaint and the club manager steals from his next employer. I am not admitted to practice law in the state of Texas, so this answer is meant to give general information and not to be legal advice to your club.  You should consult an attorney licensed to practice law in the state of Texas for specific advice about this situation.