When an employee needs to supplement their income between paychecks years ago, they would often float or kite a check. They didn’t really think of it as a form of internal theft because these employees viewed it as a loan of sorts.
Here’s how it worked.
An employee would write a check and get cash. They would not have enough money in their bank account to cover the dollar amount of the check. So the cash they got from the check would get deposited into their account.
Deposits would post faster than it would take the check to clear, however, they still needed to cover the bad check they had written.
They would write a second check and get cash. Then they would deposit that cash into their accounts. This cash would be enough to cover the first check, but not the second. So they would have to do it again, and again…
This would be a way to supplement their account in between paychecks. Once they had their paycheck deposited, the paycheck would cover the bad checks that had been written.
It is rare that we see employee theft investigations for bad checks these days.
What we do see is the same process with deposits. Cash is taken out of a deposit and cash from the next day’s deposit covers it up. They will take the money out of each deposit until they can make up the difference with their paychecks.
Generally we figure out the internal theft because something happens to break the cycle. If an employee falls ill or quits, the money to cover the previous day’s loan is not there and the money shows up missing.
For more information on employee theft, employee theft investigation or internal theft contact us or call 1.770.426.0547 – Atlanta Georgia
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