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In this case, we all know the kind of people our family is and those among them we can trust with money, For example, I have an elder sis that helps me to manage stuff like this, in fact she is my face offline and she is doing well and i also have a brother that i know i cant trust with money because he will definitely want to take more than expected regardless of that, I still love him just cant trust him with my business or and financial aspect... Your friend should have know his family and if this is new to him, he can take the loss and figure out another way to grow a business without involving them.
My friend learned the hard way and this can happen to anyone, this shows that we can't trust anybody.