FMLA Fraud in Energy Operations: The Hidden Crisis Draining Your Budget and Compromising Safety

by Brittany Simpson | Jul 24, 2025 | Corporate Investigations, Energy Industry, FMLA Investigations, Workplace Investigations

The statistics reveal a troubling reality: 66% of HR professionals acknowledge widespread FMLA abuse in their organizations. In energy operations, this fraud creates problems that extend far beyond lost productivity. When safety-critical positions sit empty due to fraudulent medical claims, operational integrity suffers and people can get hurt.

Energy companies face a unique vulnerability to FMLA fraud. The physical demands of energy work provide ready-made excuses for injury claims, while specialized skill requirements make it incredibly expensive when key personnel disappear during critical operations.

The Perfect Storm: Why Energy Operations Are Prime Targets

Energy facilities create ideal conditions for FMLA exploitation. The demanding physical environment offers built-in justification for injury claims. High-stress operations provide cover for mental health leave requests. Most importantly, the specialized nature of energy work means finding qualified replacements is both difficult and expensive.

Consider the impact during a refinery turnaround or major pipeline project. Certified welders, experienced operators, and specialized technicians who understand complex systems become irreplaceable. When these critical employees develop mysterious medical conditions at crucial moments, operations face disruption that costs far more than simple wage replacement.

The fraudsters understand this leverage. They recognize that strategic timing creates maximum operational pressure, reducing the likelihood of thorough investigation. Management teams focused on maintaining production schedules and meeting regulatory requirements often accept questionable medical documentation rather than risk project delays.

Union environments can compound the problem. Protective workplace cultures sometimes discourage reporting of suspicious behavior, while shop stewards may interpret any investigation of medical leave as harassment. This environment gives dishonest employees confidence that their schemes will go unchallenged.

Seasonal patterns reveal the fraud clearly. Refineries experience injury spikes before maintenance seasons. Wind farms see medical emergencies during storm response periods. Solar installations face chronic conditions during summer installation pushes. The timing correlation is so consistent it suggests coordination rather than coincidence.

The True Cost: Beyond Fraudulent Wage Payments

FMLA fraud in energy operations creates cascading financial impacts that multiply the initial deception:

When a certified electrical supervisor takes fraudulent medical leave during a planned outage, replacement costs explode. Contractor rates of $180 per hour replace normal supervisory wages of $45 per hour. Add travel expenses and the inefficiency of unfamiliar personnel, and costs triple or quadruple.

Remaining crew members work massive overtime to cover absent positions. Exhausted workers make mistakes. Safety protocols get overlooked. Shortcuts become tempting. The fraudulent back injury that started the problem might ultimately cause a real accident costing millions in damages and regulatory penalties.

Equipment downtime multiplies when specialized operators aren’t available. A single technician’s fraudulent leave can shut down entire production units. Lost production days represent permanent revenue that can never be recovered, often worth far more than the wages paid during fraudulent leave.

Regulatory compliance becomes problematic when energy facilities must maintain specific staffing ratios for safety reasons. Fraudulent medical leave forces impossible choices between shutting down operations or violating federal safety requirements.

Emergency response capabilities suffer dangerous gaps when critical personnel claim fraudulent injuries. Energy facilities require 24/7 emergency response teams, and fraudulent leave can create coverage gaps that endanger both workers and surrounding communities.

Recognizing the Patterns: Red Flags That Demand Investigation

Energy sector FMLA fraud follows predictable patterns that become obvious once you understand what to look for:

Strategic Timing: Multiple employees in the same department developing unrelated medical problems before busy periods. One refinery experienced six welders claiming back injuries in the two weeks preceding their biggest maintenance shutdown.

Selective Capabilities: Workers claiming inability to lift 15 pounds while completing major home renovation projects during medical leave. Operators who cannot handle shift work due to stress but coach youth sports multiple nights weekly.

Medical Provider Shopping: Employees visiting multiple healthcare providers until finding one willing to approve leave requests. They present different symptoms to different doctors, building medical documentation that supports their desired condition.

Convenient Emergencies: Medical situations that consistently occur before performance reviews, safety training requirements, or disciplinary meetings. Pattern analysis often reveals timing that defies statistical probability.

Digital Evidence: Social media posts that contradict claimed limitations. The crane operator with chronic fatigue posting beach vacation photos. The maintenance worker with severe back injury uploading furniture-moving videos.

Miraculous Recovery: Medical conditions that resolve immediately after holidays, vacations, or other desired time off. Recovery timing that surpasses professional athletic rehabilitation.

Why Internal Investigation Falls Short

Human resources departments lack the specialized capabilities required for complex fraud investigation. Most HR professionals need HR investigation services that provide surveillance capabilities, medical record analysis, and digital investigation techniques beyond typical HR expertise.

Legal liability concerns create decision paralysis. FMLA law includes severe penalties for employers who violate employee rights during investigations. HR teams often avoid actions that might be perceived as retaliation, allowing obvious fraud to continue unchallenged.

Information security becomes impossible when HR begins questioning suspicious medical leave. Word spreads through facilities rapidly, allowing fraudulent employees to delete compromising evidence and coach family members on responses to potential inquiries.

Resource limitations prevent thorough investigation. HR departments managing daily operations cannot dedicate months to intensive fraud investigation while maintaining recruiting, benefits administration, and other essential functions.

Relationship dynamics complicate objective investigation. HR staff working daily with suspected employees find it difficult to maintain investigative objectivity, especially when suspects are well-regarded by coworkers.

Professional Investigation: Capabilities That Deliver Results

Professional investigators provide specialized capabilities unavailable within most organizations:

Legal Surveillance: Licensed investigators can legally observe employees during medical leave, documenting activities that contradict claimed limitations. This surveillance must meet strict legal standards for admissibility in employment proceedings and potential criminal cases.

Digital Forensics: Systematic monitoring of social media activity, online behavior, and digital communications identifies evidence contradicting FMLA claims. Professional investigators understand legal requirements for preserving and using digital evidence.

Medical Analysis: Expert review of healthcare provider certifications identifies inconsistencies, questionable medical opinions, and patterns suggesting fraud. Investigators collaborate with medical consultants when complex medical issues require specialized understanding.

Comprehensive Background Research: Professional investigators examine financial pressures, employment history, and personal circumstances that might motivate FMLA fraud, building complete profiles through detailed background investigations.

Strategic Interviewing: Trained investigators conduct interviews with witnesses, family members, and others using techniques that produce useful information while maintaining legal compliance. They understand how to reveal inconsistencies without violating privacy rights.

Admissible Evidence: Professional investigators understand legal requirements for evidence handling and documentation. They preserve evidence properly, maintain chain of custody, and document findings to support both employment decisions and potential criminal prosecution.

Investigation Methodology: Systematic Evidence Development

Professional FMLA fraud investigations follow structured processes designed to gather solid evidence while protecting both employer and employee rights:

Case Evaluation: Investigators analyze FMLA history, medical documentation, workplace behavior, and timing patterns to determine investigation merit and appropriate methodologies.

Surveillance Operations: Covert observation is planned and executed to document actual physical capabilities and daily activities during claimed medical leave, using legally compliant techniques that produce admissible evidence.

Digital Intelligence Gathering: Systematic monitoring of social media, online activity, and public records reveals activities contradicting FMLA claims, with proper documentation preserving evidence for legal proceedings.

Medical Documentation Analysis: Expert examination of healthcare provider certifications identifies inconsistencies, gaps, or questionable medical opinions supporting leave requests.

Witness Development: Strategic interviews with coworkers, neighbors, and others who observed employee behavior during medical leave, conducted to protect both investigation integrity and witness privacy.

Comprehensive Documentation: Complete case documentation in formats suitable for employment actions, insurance claims, and potential criminal prosecution, with clear recommendations for resolution.

Legal Compliance: Navigating Complex Requirements

FMLA investigations carry significant legal risks requiring professional expertise. Employees enjoy protection from retaliation for using FMLA leave, so investigations must be structured to avoid any appearance of retaliatory action.

Privacy laws governing medical information and surveillance activities vary by state, with violations carrying both civil and criminal penalties. Professional investigators understand these requirements and conduct investigations within legal boundaries.

Evidence must be gathered using legally acceptable methods to be useful in employment proceedings and criminal cases. Documentation standards for FMLA fraud cases are strict, and improper evidence collection can destroy otherwise solid cases.

Due process rights require fair treatment throughout disciplinary proceedings. Employees accused of FMLA fraud have rights that must be respected during investigation and resolution processes.

Federal law enforcement coordination becomes necessary when fraud reaches criminal levels. FMLA fraud constitutes a federal crime, and professional investigators understand when and how to work with federal agencies for prosecution.

Financial Analysis: Investment vs. Ongoing Loss

Professional FMLA fraud investigations typically cost $8,000 to $20,000 depending on complexity and duration. This investment must be weighed against ongoing fraud costs:

Individual fraudulent FMLA cases cost energy companies $75,000 to $300,000 in direct expenses including wage replacement, overtime coverage, contractor costs, and productivity losses. Adding equipment downtime, safety incidents, and regulatory complications, total costs often exceed $500,000.

Successful investigations typically recover costs through stopped fraudulent payments, insurance recovery, and civil restitution. However, the primary value lies in preventing future abuse and protecting operations from disruption.

Professional investigations provide legal protection against wrongful termination lawsuits. Thorough documentation of fraudulent activity supports employment decisions and reduces liability exposure when dishonest employees pursue legal action.

Strategic Response: Protecting Operations and Workers

FMLA fraud in energy operations creates safety risks extending beyond fraudulent wage payments. When critical positions remain empty due to fake medical conditions, operations suffer and workers face increased dangers. This employee misconduct creates risks that demand professional resolution.

Energy companies cannot afford to ignore obvious FMLA abuse, but they cannot afford to mishandle fraud investigations either. Professional FMLA fraud investigation provides expertise necessary to document workplace misconduct while protecting legitimate employee rights.

Facilities experiencing suspicious FMLA patterns, timing coincidences, or questionable medical claims should consider professional corporate investigation as the optimal approach for resolution and prevention of future abuse.

Delayed action increases both expense and disruption. Each day of continued fraudulent leave costs money and creates preventable safety risks.

Concerned about suspicious FMLA activity at your facility? Schedule a confidential consultation with Kyle Robison, Deputy Director of Investigations at Lauth Investigations International. Kyle specializes in FMLA fraud cases in the energy sector and can help determine whether investigation is warranted and how to proceed safely.

Schedule your consultation today to discuss your specific situation and learn how professional investigation can protect your operations from FMLA fraud.

Lauth Investigations International has conducted hundreds of FMLA fraud investigations for energy sector clients nationwide. Our team understands the operational challenges of energy companies and specializes in investigations that protect both employer rights and employee protections under federal law.

The Person Stealing From Your Bank Sits Three Cubicles Down From HR

by Brittany Simpson | Jul 23, 2025 | Corporate Theft, Fraud

Last Tuesday, a regional bank president called our team. “We just discovered our head teller has been stealing from us for four years… how did we miss this?”

Said bank had spent $2.3 million on cybersecurity upgrades in the past two years. State-of-the-art firewalls. AI-powered fraud detection. The works. Meanwhile, the head teller was skimming $300 a week from dormant accounts, and nobody noticed because she was careful, she was patient, and she knew exactly how their systems worked.

The teller walked away with $62,400 before they caught her. The bank’s going to lose about $1.2 million by the time this mess gets cleaned up.

The frustrating part? The suspected employee wasn’t some criminal mastermind. She was just paying for her mom’s nursing home care and figured nobody would miss money from accounts that hadn’t been touched in years. She was wrong about the “nobody would miss it” part, but she was absolutely right about how easy it would be.

Here’s What Nobody Wants to Talk About

Internal fraud accounts for roughly 70% of all banking losses. Not cyberattacks. Not check fraud. Not even armed robberies. Your own people.

The numbers from this year are brutal. According to the latest industry report, 57% of financial institutions lost over $500,000 to fraud in 2024. A quarter of them lost over a million. That’s not “some banks.” That’s most banks.

The fraud examiners association puts the total at 5% of revenue lost to fraud annually. Take your bank’s revenue, multiply by 0.05, and try not to throw up.

But here’s what really gets complicated: these numbers only represent the fraud we actually catch. For every suspected teller who gets discovered, how many others are out there right now, slowly bleeding banks dry?

Your Security Strategy Has a Teller-Sized Hole in It

Most banks approach security like they’re building Fort Knox. Massive perimeter defenses. Sophisticated detection systems. Armed guards. Electronic monitoring. It’s all very impressive.

But Fort Knox doesn’t help you when the threat is already inside, wearing a company ID badge and asking about your weekend plans.

Your firewall doesn’t know that Steve from commercial lending is using customer information to make stock trades. Your fraud detection system won’t flag Sarah from operations when she approves fake expense reports for her boyfriend’s contracting company. And all those automated alerts? Completely useless when someone knows exactly how to fly under the radar.

Last year’s case involved three employees who figured out how to create phantom loan accounts. Not sophisticated stuff—just basic knowledge of how the approval process worked and where the gaps were. Over eighteen months, they “approved” $340,000 in loans to fake borrowers, then split the proceeds. The beauty of their scheme? Each step looked completely legitimate to anyone checking.

Another case involved a compliance officer—the person whose job was literally to prevent fraud—who figured out how to hide unauthorized wire transfers in routine regulatory reports. She stole $180,000 over two years, and the only reason they caught her was because she got greedy and started moving larger amounts.

These weren’t criminal masterminds. They were regular employees who understood their bank’s blind spots better than the security team did.

The Real Cost Makes the Teller Case Look Like Pocket Change

Direct theft is just the appetizer. The main course is everything that comes after.

When regulators find out you’ve had internal fraud, they don’t just slap your wrist. Banking regulators issued $4.3 billion in penalties last year, with banks taking $3.52 billion of that hit. The fines often exceed the original theft by 5x or 10x.

Then there’s the reputation damage. Banking is built on trust. When customers find out your employees have been stealing, they start wondering what else you’re not telling them. Accounts close. New customers go elsewhere. Community banks have lost 15% of their deposit base after internal fraud becomes public knowledge.

The operational chaos is devastating too. Good employees get pulled off important projects to deal with the investigation. New procedures have to be implemented overnight. Staff morale craters because everyone’s now under suspicion. Some banks never fully recover from the disruption.

And then the lawyers show up. Customers sue. Shareholders file lawsuits. Insurance companies fight claims. Legal bills pile up faster than snow in January.

The bank president mentioned earlier? By the time the teller’s case was resolved, the total cost was $1.2 million. For $62,400 in actual theft.

The Trusted Employee Problem

The worst cases always involve people you’d never suspect. Not the sketchy new hire who shows up late and leaves early. It’s the 20-year veteran who coaches Little League. The manager who organized the office Christmas party. The compliance officer who never missed a continuing education seminar.

These folks don’t wake up one day and decide to become criminals. It starts small—borrowing from petty cash with every intention of paying it back. Taking a small amount from an inactive account “just this once.” Using customer information for a “sure thing” stock tip.

But here’s what becomes clear after investigating hundreds of these cases: once someone crosses that line the first time, it gets easier every time after that.

And the longer they’ve been with your institution, the more dangerous they become. They know which accounts get reviewed and which don’t. They understand your approval processes inside and out. They’ve built relationships with colleagues who trust them implicitly. They know exactly how much they can steal without triggering alerts.

Most importantly, they know how to make their theft look like system errors, processing delays, or customer mistakes.

Why Your Internal Team Can’t Handle This

Your internal audit department is good at checking boxes and following procedures. They’re not trained to think like criminals. Your IT security team knows technology but doesn’t understand criminal behavior. Your HR department can handle policy violations but can’t conduct covert surveillance or digital forensics.

Here’s what happens when you try to investigate internal fraud with internal resources: word gets out immediately. The suspected employee either covers their tracks or disappears. Evidence gets deleted or destroyed. Witnesses get nervous and stop cooperating. The investigation becomes a circus, and the fraudster usually walks away clean.

Professional investigators bring capabilities that don’t exist in most banks:

Covert observation: Professional teams can watch suspected employees without them knowing an investigation exists. No office gossip, no warning signs, no opportunity to destroy evidence.

Digital forensics: Deleted emails, cleared browser histories, encrypted communications—specialized tools and expertise can recover digital evidence your IT department can’t access.

Social media investigation: Many internal fraudsters post about their newfound wealth on social media. Expensive dinners, luxury vacations, designer purchases—all funded by stolen money and documented online.

Interview techniques: Getting the truth from employees requires specialized training. Professional investigators know how to conduct interviews that actually produce useful information, not just denials and deflections.

Legal evidence handling: Finding evidence is one thing. Making sure it holds up in court is another. Professional investigators know how to preserve evidence, maintain chain of custody, and document everything properly for prosecution.

Red Flags That Should Scare You

Some warning signs are obvious: employees living beyond their means, reluctance to take vacation time, defensive behavior about routine questions. Others are more subtle.

Watch for employees who seem to know too much about other people’s financial situations. Staff members who volunteer for overtime constantly, especially on weekends when fewer people are around. Anyone who gets unusually anxious when others handle their responsibilities.

Pay attention to customer complaints about account discrepancies, even minor ones. Notice employees who have unusually close relationships with vendors or specific customers. Be concerned about resistance to new procedures or system changes.

Anonymous tips should always be taken seriously, even if they seem vindictive or far-fetched. Most anonymous tipsters are fellow employees who’ve seen something suspicious but are afraid to speak up directly.

Here’s the thing about gut instincts: they’re usually right. If something feels off, it probably is.

The Math Works (When You Do It Right)

Yes, hiring professional investigators costs money. But consider the alternative.

The average internal fraud case costs financial institutions $1.4 million in direct and indirect losses. That includes the stolen money, regulatory fines, legal costs, reputation damage, and operational disruption. Some cases cost much more.

A comprehensive fraud investigation typically runs $15,000 to $50,000, depending on complexity. Even expensive investigations cost a fraction of what you’ll lose if fraud continues undetected.

Plus, professional investigators often uncover additional fraudulent activity that internal investigations miss. More complete investigations lead to better recovery through insurance claims, civil lawsuits, and asset seizure.

And here’s something most bank executives don’t consider: the deterrent effect. When employees know management takes fraud seriously and has professional resources to investigate suspicious activity, they’re much less likely to try anything stupid.

Don’t Wait for Your Next Audit to Discover the Problem

Internal fraud isn’t theoretical. It’s happening right now, at banks just like yours, committed by employees who seem just as trustworthy as yours.

The longer fraudulent activity continues, the more sophisticated it becomes and the more expensive it gets to resolve. Early detection saves money, protects reputation, and minimizes disruption.

If you’re seeing red flags, experiencing unexplained losses, or just want an honest assessment of your vulnerability, don’t wait. The cost of acting too late is always higher than the cost of acting early.

Ready to discuss your institution’s fraud prevention and detection capabilities? Schedule a confidential consultation with Kyle Robison, our Deputy Director of Investigations at Lauth Investigations International. Kyle brings extensive experience helping financial institutions identify, investigate, and resolve complex internal fraud cases.

Schedule your consultation today to discuss how professional investigative services can protect your institution’s assets and reputation. You can also text us directly at 317-759-1004— really, text us.

Lauth Investigations has been helping financial institutions deal with internal threats for over twenty years. We know banking, we understand fraud, and we know how to investigate these cases without destroying your institution’s reputation in the process.

5 Things to Do If You Suspect Someone Is Lying to You

by admin_lauth | Jul 23, 2017 | Private Investigations News

When your team or yourself have the feeling that someone is not being honest with you it can be unsettling. Corporate theft is a serious issue, costing American companies billions of dollars every year. About a third of a time, these cases of theft are from high level managers. No matter the details of the situation, it is stressful and confusing.

You don’t want to wrongly accuse them, but you also want to get down to the bottom of the situation as soon as possible. If you are in a professional setting, there are also policies and laws to consider before you can take any action. No matter what the situation, the most important thing is to sort out the truth without doing any permanent damage.

So what should somebody do if they think they are being lied to? Here are five tips from the perspective of a private investigator.

Gather the facts- It’s a lot harder for someone to lie to you if you are well informed of the facts. In the case of possible employee theft, go over your books immediately. If you suspect your spouse is cheating on you, go over the credit card transactions for days you suspect he or she was lying to you. Further, if you suspect a new employee might be lying about their past experience, invest in a thorough background check that you can obtain police reports, court documents, protective orders, bankruptcies or other debt. In the investigations stages, knowledge is power, and if you don’t have all the information, you will not be able to hone in on misdeed or specific mistruths. (Of course, do not tell the person in question that you are gathering this information.)
Look for hints- It’s a myth that you can detect a lie by the direction in which the person looks when asked a question, or by how they hold their arms, or any of those easy options. However, it’s completely true that analyzing someone’s behavior and body language can reveal when they are uncomfortable or stressed. Try sprinkling information into normal conversations to see if you can see a reaction in your suspect. For example, if you have a hunch that your friend is stealing your prescription drugs, try mentioning the drugs in a story when she is not looking at you and see if she pauses, looks up, or hesitates. While this is not a 100% effective strategy for discovering a lie, it can help you find something revealing.
Learn the policies- As mentioned above, if the potential lie is taking place in a professional environment, it is important to get familiar with the laws and policies surrounding investigating, firing, and pressing charges against an employee. Whether the employee is a superior or entry level, you need to make sure that his or her rights and privacy are respected, otherwise you may end up with bigger problems. Similarly, if you suspect lying taking place in your private life, you need to make sure you don’t cross any boundaries of privacy. Logging onto someone’s social media or reading their private messages can be considered trespassing in some instances.
Call an Investigator- No matter how thorough and careful you are during your investigation, if the situation is of serious importance, it’s always better to hire an outside professional to help you understand the situation. Though it might seem like a big step to hire a private investigator, it can save you a lot of stress and worry by getting you reliable answers quickly. With issues such as theft or fraud where you risk losing money, the investment in a P.I. (which usually ends up somewhere around $2,500) will seem like nothing compared to the money you save by presenting a solid case of evidence in court. Sometimes in personal situations, people have a hard time deciding to call a private investigator because they feel like it is putting the nail in the coffin of a relationship. But this does not have to be the case. Private investigators are experts at being discreet and if they don’t find anything, your partner may not even ever find out that you hired an investigator. Private investigators are not for everyone and not applicable to every situation, but it’s important to know your options if you are in trouble.
Wait to confront- Whether you just suspect someone is lying to you or you have officially confirmed it, it’s best to wait to confront the person until you have spoken to professionals (police, detective, lawyer) and have a solid plan of action in place. Confrontations can be difficult, dangerous, and emotional, so it is best to make absolutely sure that you know what you want to do next (Fire them? Get a divorce? Press charges?) before the confrontation occurs. If you can, let the professionals support you during the confrontation process so that you have an objective third party present.

If you suspect someone is lying to you, you may be right, but always keep in mind that you may be wrong as well. Never jump to conclusions, it could lead you to betraying the trust of someone you care about. Instead, take the time to smartly and respectfully gather more information and get the right help.

How to Prevent Employee Theft at Car Dealerships

by admin_lauth | Jun 21, 2017 | blog

Neighborhood car dealerships are often a victim of theft in many formats. For Lauth Investigations investigators there appears to be an uptick in handling these cases. Employee theft is common in general, with 50 billion dollars lost annually to employee theft in the U.S., but it is especially common with auto dealers due to the access employees have to vehicles and the high value of the product.

Employee theft is something dealers need to be constantly vigilant about. With merchandise going on and off site on a regular basis and with keys switching hands frequently, actual physical theft of a vehicle is common. If it’s not an issue of physically stealing the car, it’s a question of an employee tampering with invoices and checks. Whatever the strategy, car dealerships are losing big time to employee theft, which is a compounding problem since outside theft is already such a big issue for dealerships in the first place.

This week’s blog offers tips for dealers looking to prevent inside theft from their dealerships, with tips on how to handle it if you suspect something.

You need to have a good security system- This is a non-negotiable. Video surveillance at your dealership should be one of your top investments. There are a lot of good options out there including high quality video that focuses on internal processes and is meant to be used in the case of an investigation. Basically, you want a security system that is going to not just scare your employees into behaving, but that is also advanced and clear enough video to act as official evidence if you need it. Security goes beyond video as well. Whether you decide to invest in physical guards, or rely on keeping your facilities locked and changing codes frequently, make sure your security is as personalized as it gets. If you have guards, make sure they know all of your employees by name. If you have smart technology locks, make sure they have voice recognition or thumbprint recognition so that your employees are always identified. Of course money is an issue when investing in security and these options are not always possible, so we suggest at the very least making security a part of the company culture and conversation so that your employees know that they are being watched.

Nobody should have too much control- One of the most common ways that employee theft occurs is that somebody you trust is given too much freedom and control. We see this over and over again, and it feels like the same situation every time. Just because someone has been working for you for years does not mean that they are incapable of betraying your trust, on the contrary, these are the most common cases of employee theft because the employee feels comfortable enough in the environment to begin stealing. Everyone should have some form of check and everyone who handles money should have their books randomly reviewed at different points in the year. Many cases of insider theft are discovered once an employee goes on vacation and a new employee discovers a discrepancy that leads to an investigation.

Take discrepancies seriously- When anything in your bookkeeping doesn’t match up, it needs to be investigated immediately. If you have the least bit of suspicion that something might be going on, invest the time and energy into getting to the bottom of it. We see too many cases where proof of theft appeared early on but it was written off as mistakes in bookkeeping. Hiring a private investigator to research such discrepancies will set you back a couple of thousand. Being victim to employee fraud for a few months can cost you tens or hundreds of thousands. Don’t feel paranoid or ridiculous by choosing to play it safe.

Change patterns frequently- The key to avoiding theft, whether it’s inside or outside, is never letting anyone get to comfortable with the way things work. Make sure that the procedure for locking up, exchanging keys, and moving cars stays air tight, but also changes every few months. This will keep both employees, and outside observers, unable to take months strategizing how to steal from you.

Conduct thorough background checks- This seems like a no-brainer, but a surprising amount of dealerships do not conduct thorough background checks of potential employees. Just because someone makes a good impression or is a friend of a friend does not mean you don’t need to check into their past before you hire them. Many cases of employee fraud could be prevented by simply being thorough ahead of time.

Now if you are reading this and thinking, “All of this checking and suspicion is horrible for office morale,” you’re not alone. Many business managers need to learn to weigh protecting themselves from theft with creating an environment of culture and trust at the workplace. If you think that it is bad for company morale to have your employee’s feel like they are always being checked on, then frame the checks as a way to protect against accounting mistakes, instead of making references to theft. Also, be as transparent as possible with all other aspects of employee life such as salary, promotions, and rewarding hard work.

No employee can fault you for wanting to protect against theft as long as they are being treated with respect. Implementing these habits into your management will lead to a healthier and more efficient environment for both yourself and your employees.