Employee theft is a growing problem for businesses across industries. Cases of internal fraud, embezzlement, and theft follow rising economic stresses. The Association of Certified Fraud Examiners (ACFE) estimates that fraud costs companies 5% of their annual income; small enterprises are the most vulnerable. Correct preventive measures will help businesses reduce their risks and safeguard their financial situation. This article investigates the reasons behind employee theft, actual incidents, and practical strategies companies may apply to stop and identify internal fraud.
Understanding Why Employee Theft Is Increasing
Although theft in the workplace has always been a problem, inflation and recession can drive workers into moral lapses. One of the main causes is financial stress, especially in cases when living expenses rise, but salaries stay the same. Some workers excuse their theft from their companies by thinking they are underpaid or undervalued. Others can steal out of entitlement, personal debt, or addiction. Increasing theft possibilities also depends much on the availability of firm resources—cash, inventory, or secret data of all kinds. Without appropriate security systems, companies could unintentionally let dishonest staff members take advantage of weaknesses in control.
Strengthening Internal Controls to Prevent Fraud
Companies without internal controls run more of a chance of theft. Policies that are weak or nonexistent let staff members falsify financial records, siphon cash, or pilfer goods without anybody noticing right away. Reducing employee theft starts with putting robust internal controls into use. These include implementing automated accounting systems tracking odd activity, dual authorization for significant payments, and division of tasks so that no one staff member has total authority over financial operations. Frequent audits should go over inventory, spending reports, and transaction data for disparities. Making sure staff members are aware of these controls helps to discourage theft as well.
Implementing Surveillance and Monitoring Systems
Stopping and identifying employee theft depends critically on surveillance. Putting security cameras in strategic places—like warehouses, cash registers, and stockrooms—helps track suspicious activity. Digital monitoring systems should also be used by businesses to check access records, emails, and corporate equipment for possible fraud. Unauthorized file transfers, odd logins, or too much access to bank records can all be flagged by monitoring software. Implementing surveillance calls for openness; staff members should be informed that security policies are in place, therefore deterring dishonest behavior. Apart from discouraging theft, surveillance systems offer proof should an inquiry be called for.
Encouraging Whistleblowing and Anonymous Reporting
Employee tips are among the best tools available to find internal theft. Many workers know of dishonest behavior occurring in their company, but they worry about reprisals should they disclose misbehavior. Establishing a safe workplace for reporters will help greatly minimize theft. Companies should set up anonymous hotlines or encrypted email channels where staff members may document questionable behavior free from concern about consequences. Providing cash incentives for confirmed fraud reports helps staff members to come forward as well. Studies of organizations with whistleblower policies have found that they recoup financial losses faster and spot fraud more immediately.
Real-Life Case: Employee Theft in 2024
A well-known incident of employee theft in 2024 concerned a Florida mid-sized company’s finance manager who manipulated payroll records to embezzlement of over $1.2 million. The manager established fictitious staff members and directed pay into personal accounts. Because payroll approvals lacked supervision, the theft stayed unreported for more than two years. Discrepancies in pay distribution were discovered during an external audit at last, which set off an investigation. The case emphasizes the need to routinely review finances, outside audits, and background checks for staff members in critical roles.
Conducting Regular and Unannounced Audits
One useful weapon in spotting theft is unannounced audits. Random financial reviews let staff members know they are under observation, therefore lowering the possibility of dishonest activity. These audits ought to address financial activities, inventory levels, petty cash handling, and expense reporting. To conduct objective reviews, one can engage an outside forensic accounting company to carry out independent audits. Surprise cash counts also help to find skimming or illegal withdrawals. Apart from revealing theft, regular audits help to emphasize the need for responsibility inside a company.
Lauth’s Investigative Methods for Detecting Employee Theft
Lauth Investigations focuses on revealing employee embezzlement and internal fraud. Among their approaches include surveillance, undercover investigations, and forensic accounting. Examining financial records and tracking staff behavior helps investigators identify fraudulent activity and compile proof. Under circumstances when companies believe there is long-term theft, covert monitoring helps to monitor dubious staff members and their actions. Before recruiting staff, background searches and integrity tests also enable companies to spot any hazards. Lauth’s knowledge of white-collar crime investigations gives businesses the tools they need to properly spot and stop theft.
Creating a Strong, Ethical Workplace Culture
A strong corporate culture opposes immoral behavior. Employees who feel appreciated and believe in the objective of the business are less prone to steal. Businesses could encourage ethics by means of reinforcement of corporate principles, communication, and leadership. Frequent training courses on ethical decision-making and fraud prevention help to keep the issue fresh in staff members’ consciousness. By means of employee recognition programs, rewarding honesty and integrity helps to lower the temptation to steal as well. Employees are less prone to participate in dishonest behavior when they feel that misbehavior will not be accepted.
Legal Consequences and Employee Accountability
Employees must be made aware of the consequences of theft. Clear regulations defining disciplinary actions for dishonesty guarantees staff members that theft will result in termination and maybe legal action. Zero-tolerance rules should be followed by companies to guarantee fair investigations grounded on facts. Pursuing legal action against the guilty party not only helps to recoup money losses but also discourages others from trying like-crimes upon detection of theft. Publicly handling instances of corporate fraud helps to underline the fact that theft will not be overlooked.
Conclusion
Employee theft is a rising issue especially in uncertain economic times. Businesses run enormous financial losses without appropriate controls. Important ways to stop fraud are strengthening internal controls, running frequent audits, using surveillance, and pushing whistleblowing. Actual events such as the payroll fraud episode in 2024 highlight the need for early surveillance. Investigative companies like Lauth Investigations give companies the knowledge required to find and address internal theft. Strict responsibility policies and an ethical workplace culture help companies guard against financial damage and guarantee long-term success.
In today’s world, companies face many risks. One of the biggest risks comes from within the company itself. These are called insider threats, and when employees or other trusted people inside a company do things that harm the business. These actions can be stealing secrets, damaging property, or even leaking important information. This blog will explain how companies can use corporate investigations to protect themselves from insider threats.
What Are Insider Threats?
Insider threats are actions taken by people inside a company that can harm the business. These people can be employees, contractors, or even business partners. Sometimes, they do these harmful things on purpose. Other times, they do it by accident, but the results can be just as damaging.
For example, a worker might accidentally share a company’s secret information with the wrong person. In another case, an employee might purposely steal customer data to sell it to someone else. Both of these are insider threats, even though one was an accident and the other was on purpose.
Why Are Insider Threats Dangerous?
Insider threats are dangerous because the people inside a company already have access to important information. They know the company’s secrets, systems, and weaknesses. Because of this, they can cause more harm than someone from the outside.
Imagine if a worker who knows all the passwords to the company’s computer system decided to share them with someone else. This could allow a hacker to get into the company’s system and steal important data. Because the worker had inside access, the hacker’s job becomes much easier.
Common Types of Insider Threats
There are different types of insider threats, and it’s important to understand each one so companies can protect themselves.
Malicious Insiders: These are people who intentionally want to harm the company. They might be upset with their job, want revenge, or want to make money by selling company secrets. These insiders are very dangerous because they know the company well and can plan their attacks carefully.
Careless Insiders: Sometimes, insiders do not mean to cause harm, but they do so by being careless. For example, an employee might accidentally click on a phishing email that gives hackers access to the company’s data. Even though the employee did not mean to do harm, the results can be just as bad as if they did.
Third-Party Insiders: These are people who work with the company but are not direct employees. For example, a contractor might have access to the company’s systems and accidentally leak important information. Because they are not full-time employees, they might not follow the same security rules, making them a potential threat.
How Corporate Investigations Help?
Corporate investigations are a way for companies to protect themselves from insider threats. These investigations involve looking closely at what is happening inside the company to find any problems or risks.
Investigators might look at things like emails, computer files, and even security camera footage. They do this to find out if anyone is doing something that could harm the company. If they find a problem, they can work to fix it before it gets worse.
Steps in a Corporate Investigation
There are several steps involved in a corporate investigation. These steps help ensure that the investigation is thorough and finds any potential insider threats.
Identifying the Problem: The first step is to figure out what the problem is. This could be a missing file, strange behavior from an employee, or a security breach. Identifying the problem early is important because it allows the investigation to focus on the right areas.
Gathering Evidence: After identifying the problem, the next step is to gather evidence. This could include looking at emails, checking computer logs, and interviewing employees. The goal is to find proof of what is happening so that the company can take action.
Analyzing the Evidence: Once the evidence is gathered, it needs to be analyzed. This means looking closely at the data to find patterns or signs of wrongdoing. For example, if an employee is sending a lot of emails to a competitor, this could be a sign that they are leaking information.
Taking Action: After the evidence has been analyzed, the company can take action. This might mean firing an employee, changing security protocols, or even involving law enforcement if the situation is serious. The goal is to stop the insider threat before it can cause more harm.
Preventing Future Threats: The final step is to put measures in place to prevent future insider threats. This could include better training for employees, stronger security systems, or regular checks to ensure everything is running smoothly.
The Role of Technology in Corporate Investigations
Technology plays a big role in corporate investigations. With the help of advanced tools, companies can monitor their systems more closely and detect insider threats more quickly.
For example, many companies use software that can track employee activity on company computers. This software can alert the company if an employee is doing something suspicious, like trying to access files they shouldn’t. This early warning system can help prevent insider threats before they cause any damage.
Case Studies: Real-Life Examples of Insider Threats
To understand how serious insider threats can be, let’s look at some real-life examples.
The Edward Snowden Case: Edward Snowden was a contractor for the U.S. government who leaked classified information. He had access to important files and used that access to share secrets with the public. This case shows how dangerous insider threats can be when someone with inside knowledge decides to act against the organization.
The Coca-Cola Recipe Theft Attempt: In 2006, an employee at Coca-Cola tried to steal the secret recipe for Coca-Cola and sell it to Pepsi. Pepsi reported the attempt to Coca-Cola, and the employee was caught. This case highlights how insider threats can be driven by greed and how they can be stopped with the right measures in place.
Target Data Breach: In 2013, hackers stole credit card information from millions of Target customers. The hackers gained access to Target’s systems through a third-party contractor. This case shows how third-party insiders can pose a threat, even if they do not work directly for the company.
Best Practices for Preventing Insider Threats
Preventing insider threats requires a proactive approach. Here are some best practices that companies can follow to protect themselves:
Conduct Regular Employee Training: Employees should be trained on how to recognize and avoid insider threats. This includes being aware of phishing emails, securing their workstations, and following company security policies.
Implement Strong Access Controls: Not everyone in the company needs access to all information. By limiting access to only those who need it, companies can reduce the risk of insider threats.
Monitor Employee Activity: Regularly monitoring employee activity can help catch suspicious behavior early. This could include checking email usage, reviewing access logs, and keeping an eye on file transfers.
Use Technology Wisely: Implementing the right technology can help companies detect and prevent insider threats. This could include security software, encryption tools, and regular system audits.
Foster a Positive Work Environment: A happy and engaged workforce is less likely to become a source of insider threats. Companies should work to create a positive work environment where employees feel valued and heard.
Insider threats are a serious risk for any company. Because these threats come from within, they can be more difficult to detect and prevent. However, with the right strategies, including corporate investigations, companies can protect themselves. By being proactive, using technology, and following best practices, businesses can reduce the risk of insider threats and keep their operations safe.If you suspect an insider threat or need help with a corporate investigation, contact Lauth Investigations International today.
Research suggests that 75% of employees have stolen from their place of work in the past, making corporate theft a priority issue for any business owner or CEO with self-preservation high on their agenda.
Every employer likes to imagine that they’ve hired a trustworthy team rather than created a den of thieves. However, unfortunately, as many as 95% of U.S. companies get caught out at least once by an enemy lurking within.
Meanwhile, workplace theft runs up an annual bill of $50 billion annually for American businesses. Fortunately, a strategic corporate theft investigation can stop employee theft in its tracks and make it less likely to happen in the future.
Preventing Employee Theft by Strengthening Corporate Culture
When we think about theft prevention, it is easy to focus solely on locking down assets and ramping up security protocols, but there is another area of concern that shouldn’t be overlooked. Research shows that unhappy employees are more likely to behave unethically towards their employer. Employees that feel valued and grateful are less likely to be dishonest.
This provides yet another reason to add to your list of why corporate culture is worth investing in. A great place to start when it comes to building a stronger workplace culture is with a corporate culture audit, providing clear oversight of the current status quo and a clear path to improve and enhance culture for the better.
Of course, not all would-be thieves will be deterred by a place within a happy workplace. This makes comprehensive corporate background checks an essential addition to the employer’s toolkit. It also makes vigilance among leadership essential, and swift action a smart move when the need to launch a corporate theft investigation arises.
Workplace theft can vary dramatically in scope and scale, ranging from minor losses of things like stationery from a few slippery-fingered team members through to widespread and coordinated theft of expensive equipment, retail stock, sensitive data, financial assets, and more. While the proportion of the issue will certainly shape the urgency of the response, all employee theft should be taken seriously before it contributes to a negative shift in corporate culture.
A corporate theft investigation should focus on the achievement of four main objectives. The first is to identify the perpetrators, the second is to secure evidence of their activities. The third is to recover lost assets where possible, and the fourth is to respond appropriately, ranging from disciplinary action through to prosecution of those involved. If you are concerned about employee theft in your place of business and are unsure how to proceed, our dedicated team of corporate investigators here at Lauth Investigations is ready to assist. We will guide you through every step of the investigatory process, from conducting undercover operations to interviewing witnesses and compiling evidence for legal proceedings. Discover more about how we investigate workplace theft or contact our team today.
It’s every company’s worst nightmare. The very individual trusted to balance the books and safeguard assets has decided to try their hand at embezzlement. If your accountant or another trusted individual with financial oversight has done your enterprise dirty, what can you do? Rather than panic, it’s time to roll out a four-part plan to seek justice and get back on your feet.
Embezzlement is one of the nastiest kinds of white collar crime because its very nature implies a vicious abuse of trust. When someone intentionally misappropriates the assets that were entrusted to them, the sense of betrayal can be just as brutal as the hole in your balance sheets—which may be modest or may run into millions of dollars.
Shockingly, white collar crime costs American businesses billions if not trillions of dollars each year. Starkly, this means that, yes, it really can happen to you. More optimistically, it means that victims are not alone, and corporate experts such as those here at Lauth Investigations International are seasoned in providing the critical support you need to weather the storm ahead.
Detecting Embezzlement Doesn’t Have to Be the Start of a Nightmare
When an accountant or bookkeeper engages in white collar crime, detecting their actions can be difficult—after all, they are the experts in making the numbers add up. However, this fact alone demonstrates why additional oversight, background checks, and security protocols are so vital in white collar crime prevention.
Once you discover that gaping hole in your company’s finances, there isn’t a moment to lose. Any delay at this juncture can provide opportunity for the thief in your coop to take their final spoils and deftly cover their tracks—so don’t provide them with the satisfaction. Instead, contact an expert corporate investigations company so that they can immediately jump on evidence gathering and guide you through self-protective next steps.
Step 1: Rapid Corporate Investigations
Before you begin the process of recovering the health of your business, it is critical not only to understand the scale and nature of the crime but also to gather the concrete proof that will be required to out-maneuverer its perpetrator.
Within the realm of workplace investigations, this calls for a specific skillset. The corporate investigator may need to deep-dive into forensic accounting, look at CCTV footage, interview employees, conduct background investigations on suspects, and much more. Urgency is key for ensuring that the trail doesn’t go cold.
Step 2: Pursuing Asset Recovery
Depending on the nature of the crime and of your enterprise, asset recovery may be a timely process that runs through the courts or it may take place behind closed doors. Either way, the caliber of your evidence and the integrity of the investigations that generated it will be your ultimate assets. For example, our seasoned corporate investigations team is ever-ready to build and document an air-tight case, advise on legal obligations, and even provide expert testimony should the need arise.
Step 3: Planning For Financial Shortfalls
It can be brutally unfair, but following white collar crime, asset recovery can take time and is often only partial. This makes planning to plug any financial shortfalls key. This might make cash crisis management, restructuring, or debt restructuring strategically important as you keep your organization’s head above water.
Step 4: Safeguarding Against Future White Collar Crime
No matter the scale of losses following a white collar crime, no business will want to repeat the experience. Now that you know who to turn to for effective corporate investigations support, you have gained more than the capability to react to a rogue accountant. If you partner with Lauth Investigations International, you also have an essential toolkit for criminality prevention.
We can assist with critical violence and threat assessments—examining both on-site and virtual security measures. We can help you ensure that no other snake manages to slide into your team with comprehensive background checks, drawing on many of the same databases used by law enforcement. Finally, we can help you build a strong and united corporate culture that is hostile to those who would do you harm. A corporate culture audit can weed out and prevent risk of white collar crime, employee theft, workplace violence, and more—all while forging a more synergistic and productive environment that nurtures success. Learn about this and more by contacting our team today. From crisis-fueled corporate investigations to effective crime prevention, we’ve got you and your assets covered.
No matter how much money you throw at the latest security hardware, CCTV software, or highly-trained security guards, your company may still experience employee theft. For the vast majority of businesses, sadly, the greatest threats when it comes to losing assets are individuals working under the very same roof. So much so that 90% of thefts from workplaces come at the hands of the employees themselves. This makes preventing corporate theft a priority, so how can a corporate private investigator assist?
To prevent corporate theft effectively, it helps to keep in mind that it comes in many forms. A bad actor or two among your seemingly dedicated team may make off with money or inventory, certainly. But the thing they steal could just as equally be sensitive customer data, intellectual property, or even time itself. Whichever risk looms largest at your place of business, a corporate private investigator can assist with both prevention and damage mitigation. Read on to discover how.
Proactively Preventing Corporate Theft
The price tags that come with various tactics to prevent corporate theft may seem prohibitive but studies suggest that they are well worth the investment. To look at the example of employee fraud, researchers found that companies that invest in fraud prevention tend to spend 42% less on fraud responses such as litigation, fines, and penalties. A private corporate investigator is an ideal ally to minimize the possibility of future thefts.
Preventing those bad actors from entering your place of employment in the first place is inevitably rewarding when it comes to reducing employee theft risk. A private corporate investigator is uniquely poised to perform comprehensive background checks because their licensure grants them access to many of the same databases used by law enforcement.
Another excellent strategy for preventing corporate theft is ensuring that corporate culture is strong and thriving. Unhappy employees soon become disgruntled ones who may justify to themselves decisions such as bolstering their pay through embezzlement or simply turning a blind eye to a colleague engaged in inventory theft. To get a clear sense of your current corporate culture standing, speak to a Lauth private corporate investigator about the investigatory and remedial elements within a Corporate Culture Audit.
Damage Control From a Corporate Private Investigator
When a theft has already occurred—or even a pattern of employee theft emerged—a corporate private investigator will make quick work of illuminating the facts and nipping ongoing thievery in the bud. They alone can conduct an expert investigation that is entirely free from the legal risk of bias that comes with colleagues investigating each other.
Not only can showcasing zero-tolerance by enacting a swift assisted corporate theft investigation address the issue at hand, but it can also help to shift culture and safety in the workplace for the better. Nearly 60% of companies that conduct a diligent investigation end up in a better place in the long run, and those that combine all of the tactics above will be able to enjoy not only reduced threat risk and a more secure working environment but also an associated boost to productivity, team cohesion, and bottom line. Are you ready to learn more about how a corporate private investigator can assist in preventing corporate theft? Reach out to the specialist team here at Lauth Investigations International for a no-obligation consultation on the tailored solutions that we can place at your disposal.
When it comes to workplace theft, few forms of criminality represent such a hefty potential drain on company resources than a steady flow of inventory disappearing from your warehouse. It might start out with a few small losses here and there, raising mild alarm but getting swept aside as running the business is prioritized. However, this kind of industrial theft can escalate quickly—especially when the perpetrators think getting away with the loot is an easy mark. Employees steal $50 billion from U.S. businesses every year, and if your numbers aren’t adding up, then you’ve just become part of that statistic.
For the HR team or CFO of any enterprise blighted by warehouse losses, it can soon seem as if the problem is out of hand with no solution in sight. Catching thieves red handed can be challenging for those whose role is already demanding enough. In these instances, an industrial theft investigator offers a port in the storm. But how exactly does this specialist private investigator tackle occurrences of industrial theft? Today, let’s look at red flags associated with this problem and how a PI can help restore honesty to your back end team.
Raising the Alarm on Warehouse Theft
Long before you decide to put that industrial theft investigator on speed dial, you likely went through the experience of beginning to smell a rat, before becoming confident that something untoward was afoot. Perhaps you’re still in the middle of that transition—and if so, what are the red flags that you might look out for?
Of course, the most textbook issue arising is an awareness that your stock level inventories don’t match your sales records. But, there are more nuanced signals, too.
You might spot that sales seem to drop off on days when certain members of your team are on duty or that invoices are missing. Maybe you keep finding stock sitting near loading bays or outside exits, while rumors begin to swirl or morale takes a tumble. You might notice that certain team members are reluctant to take their accrued leave, while showcasing increasing purchasing power or nipping off for clandestine meetings during working hours. All of these indicators should raise the hairs on the back of your neck, but without proof, what can you do?
How an Industrial Theft Investigator Closes the Door On Warehouse Theft
So, the warning signs are there and you know you have to act quickly. It’s time to bring in a professional to nip this issue in the bud, and it’s a specialist industrial theft investigator that you need. There are a number of ways that this type of PI can help you—and sometimes, the mere presence of an industrial theft investigator may lead perpetrators to stop dead in their tracks. But, the goal here is to ensure that this doesn’t happen again.
An industrial theft investigator will combine a number of strategies. They will begin a careful investigation of the thefts that have already occurred to illuminate the facts. This may include tactics such as surveillance, interviews, investigating individuals, and conducting digital forensics. Simultaneously, they will be able to introduce background checks and employee screening to ensure you don’t have any more nefarious actors entering your workforce. Finally, they will be able to conduct a thorough physical and procedural risk assessment of your warehouse, providing you with the opportunity to make key updates to your infrastructure, company policy, security protocols, and more. Are disappearances from your warehouse taking chunks out of your bottom line? An industrial theft investigator can put a stop to stock hemorrhaging today—so why not reach out for a no-obligation consultation and discuss the support you need. The industrial theft investigations team at Lauth Investigations International is always only a phone call or a message away.
