Understandably, embezzlement is something of a specter—a ghost haunting the dreams of business owners across America. Why? Because embezzlers often go undetected for years, are usually in a long-standing position of trust, can leave a gaping financial hole that is discovered all too late.
Alarmingly, the average company loss through embezzlement is a whopping $357,650, and over half of businesses recover less than one-third of what was lost. If you know that a crisis on that scale could cripple your enterprise, a timely embezzlement investigation is a proactive way to place yourself on the happier side of those numbers. In fact, many don’t realize that an embezzlement investigation can be both reactive or cautionary, depending on their sense of vulnerability. So, is it time to call in a corporate investigator to make sure you haven’t got a capital drain in free-flow right under your nose?
Knowing the Common Types of Embezzlement
When we talk about launching an embezzlement investigation, what kind of crimes might we be looking at? Well, embezzlement is an umbrella term for any type of fraud or capital theft engaged in by an employee and afforded by their position of trust.
Common forms of embezzlement include chronic undercharging of friends and family in a customer-facing setting, or creating a phony ghost supplier to charge your company for transactions that never really existed. The embezzler may fabricate fake refunds or fictitious bad debt. Another common type is payroll fraud—although there are many ways in which an embezzler may cook the books so that their thefts go undetected.
Red Flags of an Embezzler In Your Midst
If the perpetrator covers their tracks well, even your CFO may not notice that a sinkhole is growing in the company’s financials. However, there are other factors to become attuned to that may indirectly let you know an embezzlement investigation is called for.
For example, someone neck-deep in a complex embezzlement scheme may be very reluctant to take their accrued vacation days while exhibiting enthusiasm to work overtime. As you can imagine, moments when honest employees and management are off the clock create a far easier setting for them to conduct their nefarious activities undisturbed.
An employee overseeing an unmeasured expense such as office supplies or with access to petty cash that they can skim from should always be subject to scrutiny. So too should employees who start spending in a way that doesn’t reflect their salary, or those who dedicate a lot of time to whispered meetings with co-workers or vendors. Keep in mind that 79% of embezzlement cases involve more than one person collaborating to rip off their employer.
Launching an Embezzlement Investigation and Preventing Future Problems
As grim as these statistics might be, employers can reclaim their confidence by uncovering and stopping embezzlement in its tracks and taking steps to prevent it from happening again. Because of the complex nature of embezzlement crimes, a specialist corporate investigator is the ideal ally for tackling this challenge. They will be able to roll out digital forensics, surveillance, background checks, and even undercover investigations to bring the perpetrators and their methods to light.
A corporate investigator from Lauth Investigations International can also help you safeguard your future endeavors with comprehensive employee screening, risk assessments, procedural overhauls, and corporate culture assessments. A rise in employee misconduct often indicates a larger problem and a culture audit is a swift way to address the cause rather than only the symptoms. Would you like to know more about how we can help your business navigate an embezzlement investigation? Then connect with us today for a no-obligation consultation.