Embezzlement Awareness

The intentional taking or diverting of funds or goods from the business for personal use is far worse than spending too much time at the water cooler.  Although these incidents happen less frequently, they can quickly become very costly for your business.

Entering into the realm of traditionally understood employee theft, embezzlement is a serious crime.  Under the statute, even a minor siphoning of funds or goods can be charged as embezzlement.  Many times embezzlement doesn’t get caught until the company hits a real snag in some other area, like bouncing a check.  This is too often because there is one person that “does the books” and no one is double checking those books.  A good supervisor has an obligation to understand at least enough of what is going on under him or her to conduct a monthly review.  Another option is to have an external audit of your books, or at least random aspects, at a regular interval.  This will put employees that would consider stealing on notice that the risk of getting caught is high, and decrease the time frame a person stealing from your company will have to act before they get caught.  This ultimately reduces the potential for loss, and provides a return on your investment in the auditing.

Once a business has identified a loss through whatever means, it is important to follow the proper steps to minimize your loss and maximize your ability to prosecute the person who has betrayed your trust.  The first thing to do is restrict access of the suspect employee to the accounts and financial information, or even the company as a whole.  With online access so prevalent, make sure the employee cannot access important information from home.  All systems (whether financial, information technology, internet, or anything else) should be set up so more than one person has access to the administrator aspects.  If you are the owner of the company, you are entitled to every bit of information about the company.  Appointing a chief assistant to have access will most often suffice.  Next, contact your financial institution to obtain accurate records, and prepare a package of information for the police. 

Sometimes an employer feels embarrassed at having been the victim of embezzlement, and does not seek prosecution.  But while letting a person go quietly may get rid of one part of your problem, there are others left behind.  First, the court system can help you get your money back if you are the victim of a crime, and if the person gets convicted.  Second, that thief may get a job somewhere else and get another opportunity to steal.  Odds are someone already let them go quietly, and that’s why they were able to steal from you. 

Regardless of the offense, the loss you’ve suffered, or whether you contact law enforcement, documentation is critical.  Keep a running log in a notebook with small infractions that problem employees commit.  Use these notes when completing annual evaluations.  Keep track of dates, times and conversations, especially if your incident may get forwarded to the police.  When dealing with a series of small acts over a long period of time, I cannot stress enough the importance of preserving the case.  Police will need to be able to understand how your system was supposed to work, and how the suspect subverted it, in order to bring charges to court.  Having a written policy, and a signed acknowledgement or receipt and reading of the policy will also help support your actions.  It’s your business, stay in it.