Live by the sword, die by the sword

In normal circumstances, where there is clear evidence of theft the first thing the employer would do is call the police. Charges would be laid and the employer would ask the Crown to seek an order from the judge that the employee pay back the money. If it works, the employer gets their money back without having to hire a lawyer to sue their employee.

In a criminal proceeding, however, there has to be proof beyond a reasonable doubt. In the absence of fairly clear evidence the police will not charge the individual and the Crown will not proceed with the charge. If that happens the employer’s only option is to sue the employee before the Civil Courts. In that lawsuit the employer must satisfy the court, on a balance of probabilities, that it should draw the inference that the employee took the money. There is a lower threshold of proof that needs to be provided. Proceeding through the Civil Courts, however, involves the employer hiring their own lawyer and investing time and money in a lawsuit. 

Harry’s employer decided to go that route. Harry worked for a company that provided online hosting services for cryptocurrency miners. Miners are the people who, using computers, try to solve a very complex math problem. If they solve the problem they get some cryptocurrency. The problems change by the minute based on transactions that have already taken place and often these miners work in teams to increase their chances of success. If these teams work through Harry’s employer’s site, the employer would receive the cryptocurrency then distribute it to the members of the team. The whole system is based on strict anonymity. Nobody knows who anybody is or who is getting paid. 

Harry was involved in managing the company and selling the service. He received commission on his services. A dispute arose over commission owed to Harry. Harry eventually left the company and a few months later the employer discovered that $84,000.00 in cryptocurrency was missing. The employer claimed that when Harry left he refused to hand over the appropriate passwords to get at the money and it took months to discover the theft. Harry claimed that he never refused to provide the appropriate passwords and that other employees already had the information necessary to access the accounts. It would appear that the judge had to listen to days of baffling evidence but at the end of the day the judge decided that the employer had not proven on a balance of probabilities that Harry was the only one with access to the cryptocurrency. It was true that Harry’s dispute over commissions owed to him was a possible motivation for the theft but other employees could have been having the same problem and other employees could have accessed the money. The employer’s action was dismissed with costs. 

I don’t know if Harry took the money but I have to say that to the extent that cryptocurrency can be a means of hiding dirty money and avoiding the tax burden that the rest of us pay, I am not feeling too badly for the employer. In a normal operation, tracing this money would have been easy. When your business is based on helping people hide their identities and transactions, it does not garner much empathy. Clearly Harry’s employer truly believed he took the money and that is why they invested in the lawsuit. If he got away with something, I do not applaud it. I only note that if you live by the sword you tend to die by the sword.