Regarding employee theft, there is a widely held rule of thumb among professional auditors, accountants, and most everyone else involved in the detection and/or apprehension of dishonest employees called the 10-10-80 rule: 10 percent of employees will steal no matter what measures employers take; 10 percent will never steal regardless of the circumstances; and 80 percent will steal if all the right conditions are met.

The employer’s goal then, is to reduce the likelihood that the 80 percent will steal by reducing the opportunity that an employee will be able to steal and get away with it.

This is accomplished through a number of sound personnel practices such as separation of duties so that one employee doesn’t have responsibility for all tasks in a given operation (such as receiving or accounting), adequate supervision and review of bank reconciliation and payroll and vendor checks, and conduct unannounced audits of all operations front to back.

But every business will eventually become victim to some form of employee theft and loss of assets such as cash, merchandise, supplies, or intellectual property.

When internal theft is suspected, the next step is an employee theft investigation conducted by a loss prevention or corporate fraud investigator.  A business owner has expertise in operating his business, but often trusts others to handle the back office and routine tasks.  Once a dishonest employee discovers that he has free reign to steal it can take months and years to discover the thefts.

A loss prevention or corporate fraud investigator can help determine the depth and scope of the employee theft.  Often, the perceived involvement of one employee is only the proverbial tip of the iceberg, as there are collaborators or witnesses that should also be developed.

The advantages of using an experienced fraud investigator in an employee theft investigation situation are many.  Among them are experienced in interviewing suspects and witnesses and developing evidence; familiarity with legal issues and employment law that affect employees; exposure to many types of internal theft; and working for the welfare of the business alone.

Reduce or eliminate employee theft through careful planning and a swift reaction to any suspicion of internal theft.

For more information on employee theft , employee theft investigation , internal theft , or corporate fraud investigation contact us or call 1.770.426.0547 – Atlanta Georgia

It’s true. Employee theft investigation can lead to better profits.

Working as a corporate fraud investigator for a specialty retailer with 20 stores, I had my first real observation of just how an employee theft investigation impacts profits. Recently the company had inventory in 10 stores. 8 of these stores did pretty good, some better than expected. However, for two stores, it was clear they had an internal theft problem. One store had shrink as high as 12%. Merchandise was disappearing before it even made it to the floor. My partner and I launched a corporate fraud investigation in each store. During the course of the investigation, we looked at all avenues of employee theft including, POS systems (Registers, checkstands), backroom areas including trash, conducted general interviews of all employees to get a feel of what was happening. As we dug, we uncovered a wealth of information and evidence to prove the high shrink numbers were a direct result of employee theft.

It is pretty well known throughout the retail industry that internal theft is more than 70% of the average retailer’s losses. In some cases, it’s much more. Controlling the effects of internal theft can be difficult if you don’t know what you’re looking for or at. In many cases it takes the help of an outside corporate fraud investigator to really get a good look.

As we continued our corporate fraud investigation, we narrowed our suspects down to 3 main culprits in the first store and 5 in the second. To us, it was clear internal theft caused hundreds of thousands of dollars in loss to this company. We did interviews of the employees and gained confessions from each. Many of the employees admitted to being involved because they were unhappy with the company, the store, the manager or fell on hard times in their personal life.

Employee theft investigation is a must when there are suspicions of employee theft. When I speak to my stores, I constantly share with the management the negative impacts of employee theft and inform the employees of the damages of internal theft.

For more information on employee theft , employee theft investigation , internal theft , corporate fraud investigation or corporate fraud investigator contact us or call 1.770.426.0547 – Atlanta Georgia

How big is the problem of employee theft?

 The U.S. Chamber of Commerce estimates that over 30% of all corporate bankruptcies are caused by employee theft.  The U.S. Small Business Administration says that 60% of small business failures are attributed to internal theft.

 My estimate is that with many businesses struggling to survive in the current economy that the figures can only go higher.

 What can a business owner do to avoid becoming a statistic?

 The first thing to do is to try to prevent employee theft from becoming a problem in the first place.  When formulating policies and procedures, think like a corporate fraud investigator.  Identify any vulnerability in the systems and eliminate them through a system of chain of command, supervision, and delegation of duties.

 One of the most common scenarios in corporate fraud investigation concerning the theft of money occurs when one employee (usually the accountant or the bookkeeper, unfortunately) has the responsibility for receiving the money, depositing the money, and disbursing the money in cash or by check.  And there are so many ways to steal and get away with it for years:  payroll, vendor payments, petty cash disbursements, expense checks can all be falsified if there is no oversight.  If the same employee has access to the company credit card, look out.

 That’s just the cash end.  There is also merchandise or product to consider if you are a retailer or manufacturer, raw materials used in production, and samples are all company assets.  A corporate fraud investigator look at all the ways company assets like these can be removed from the premises, and devises methods to prevent employee theft from becoming a fact.  Business owners and managers should learn to think in this mindset.

 Then there is company property like office supplies, tools, vehicle supplies, computers, peripherals and software that is subject to internal theft and fraud.

 Finally there is time theft that can become a problem through falsified time records and employees working on personal projects while being paid by the company, which is fraud that can be corrected through a corporate fraud investigation.

 When considering ways to eliminate employee theft, there is no need to reinvent the wheel, only to adapt it to your own use, if you are a business owner or a concerned manager.  An experienced corporate fraud investigator can be a huge benefit in ways other than looking into isolated instances of internal theft after the fact and conducting an employee theft investigation.  There is no reason to wait until workplace theft becomes such an issue that it puts the business in jeopardy.  He or she can take an overview of your business and recommend steps to be taken to correct deficiencies and vulnerabilities in the operations of almost any category of business, small or large.

 If an employee theft investigation is warranted to a specific incident or just a suspicion, the corporate fraud investigator has the experience and knowledge to bring the situation to a successful conclusion and how to obtain restitution in full.

 For more information on employee theft , employee theft investigation , internal theft , corporate fraud investigation or corporate fraud investigator contact us or call 1.770.426.0547 – Atlanta Georgia