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Money Drain: My Boss Went Out of Business Buying His Mansion with Company Money

I was recently laid off from a company I have been with for decades after it folded due to the inability to fund payroll. As many of us started to file for unemployment, the details behind the business practices of my company started to unravel.

It appears that the main boss used company funds to build a rather extravagant McMansion for himself. When things started to dwindle with the recession and business only became more slow, he started missing payroll. At one point he even asked me and my husband if we could loan him money to process payroll that period (we, of course, said no). So unfortunately the company had to fold, and now we are all having trouble getting any sort of unemployment benefits due to the shady business practices. I don’t know how much money was wasted, but I imagine hundreds of thousands of dollars, if not millions over time.

– Submitted by: JoAnn

Lesson Learned:
Employers using company funds to fund anything personally is such a horrible business practice. Whether it’s cars or homes or whatever. Pay yourself a salary and leave money in the bank for the company to continue on with business. Yes, business owners should reap the profits of the business, but not to the degree that you could potentially put yourself out of business and lose everything. A lot of people depend on you for their lively-hood, a little discretion and practical business sense could go along way in making sure everyone benefits and progresses.

Estimated Amount Flushed Down the Money Drain: $500,000+

About Crystal Groves, Google+

Crystal Groves is a farmer, web developer, musician, blogger, and personal finance enthusiast from the back hills of Maryland and Pennsylvania. She started Money Drain as a project to encourage people interested in fixing their financial situation to share their stories and learn from the stories of others. We all make mistakes, but in order to change we have to make changes.

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2 Responses to Money Drain: My Boss Went Out of Business Buying His Mansion with Company Money

  1. Man that’s some serious irresponsibility! I wonder how often that happens, I used to work for an event management company that did really good for years, the boss bought a whole bunch of stuff for himself, he rented a huge house as an office, but as soon as recession hit he fired everyone because he didn’t have any money to pay for payroll..Too sad..thanks for the article!

  2. Pingback: Money Drain End of Month Report: March 2012 | The Money Drain

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