Ex-employee caught diverting UAE company funds to her own account

Picture for illustrative purposes only. ARCHIVE

Dubai-based lawyer Barney Almazar answers the most common questions regarding your legal options in various cases related to living and working in the UAE.

A reader asks: After an employee resigned and returned her company phone, we discovered a message instructing a client to deposit payment into another bank account, which turned out to be her own company. When confronted, she denied it, but our investigation revealed she had been diverting funds for several months before leaving. Please advise.

Atty. Barney says: If an employee received money on behalf of the company but redirected it for personal benefit, this could constitute breach of trust and fraud under the UAE Penal Code. These are serious criminal offenses and, if proven, may result in imprisonment, fines, and possible deportation for expatriates.

The usual course is to file a complaint with the police station that has jurisdiction over your workplace or where the offense occurred. The police will register the complaint, take statements, and carry out preliminary verification. If there is sufficient evidence, the matter is then referred to the Public Prosecution for formal investigation.

Evidence will be critical. The most persuasive would include messages instructing clients to transfer payments to unauthorized accounts, screenshots of relevant communications, bank transfer confirmations, accounting discrepancies, internal financial records, and written statements from affected clients. A forensic accounting review can also help establish intent, trace the diverted funds, and quantify losses, which can strengthen the case significantly.

If the case proceeds to prosecution, the former employee may be summoned for questioning and could face travel restrictions while the investigation is ongoing.

Separately, you may also consider pursuing civil recovery to claim the diverted funds and seek compensation for any business or reputational losses resulting from the misconduct.

This column also appears in the Expat Media Special Edition magazine. Do you have a question for Attorney Barney? Contact him at barney@gulflaw.info or know more about him here. Barney Almazar is a director at Gulf Law in the UAE, Philippines, UK and Portugal. He is a member of the Philippine Bar and holds a UAE legal consultancy license. He is listed by Thomsom Reuters as one of the Super 50 lawyers in the Middle East and North Africa. Asian Legal Business has ranked him as top lawyer in the Philippines, Southeast Asia and Middle East.