QUESTION
The CEO of a nonprofit has made large cash withdrawals from the nonprofits bank account over a couple of months. Is the CEO criminally liable?
Asked on Aug 16th, 2017 on Corporate Law - California
More details to this question:
The CEO is also the founder and has made several contributions and loans over time, but there is very little record of the contributions, so the amount is not clear. The CEO stated the large cash withdrawals are to make loan repayments and for compensation. There was no board approval for the cash withdrawals. Lastly, the board of directors failed to set a compensation policy for the CEO. Is the CEO liable and subject to criminal prosecution?
1 ANSWER
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Only the police can refer a matter to the DA for criminal prosecution.
The IRS may revoke the not for profit designation and then the IRS and Franchise Tax Board might pursue for tax issues.
Answered on Sep 06th, 2017 at 2:57 PM