Written By: Kym Pasqualini, Feature Crime Writer for Lauth Investigations

When we think of a spy, given the national news cycle, it may conjure up thoughts of Russians or the Chinese who have been long known for hacking and espionage. However, even more common, but much less talked about, is the business mole, and almost every business in America is susceptible.

Every business sector is vulnerable to Corporate Espionage and cost American businesses billions of dollars per year.

Every business sector is vulnerable to Corporate Espionage costing businesses billions of dollars per year.

April 10, 2011, Joseph Muto was hired to work for the top-rated “O’Reilly Factor” but within 3 days, he was discovered by Fox employees to be anonymously writing for Gawker. In the span of 72 hours, Muto wrote a series of articles detailing the internal workings of the network, along with stealing and selling raw video clips. In 2013, he pled guilty to two misdemeanor charges and was dubbed the “Fox Mole.” He was fined $1000 and sentenced to over 200 hours community service. At sentencing, he said he wished he had never betrayed his former employer.

United States industries spend more on research and development of unique products and processes than any other country in the world. The key to success is having an “edge” in the business world. Whether a media company, software developing company or bakery, keeping an edge is key.

When someone steals those “trade secrets”, it is called economic espionage and costs American businesses billions annually. Damages can severely destabilize the victim company to include lost revenue, lost employment, lost investments, interruption in production, damaged reputation, and can even result in a company going out of business.

Corporate espionage conducted by spies or moles believe computers are irrelevant. It is about what data they want, what form they take, and how they can steal it.

The Company Man

The Federal Bureau of Investigation (FBI) states no business, large or small, is immune to the threat of moles and/or spies. Any proprietary process, product, or idea can be a target.

To raise awareness, the FBI in collaboration with the National Counterintelligence and Security Center has launched a nationwide campaign and released a short film called “The Company Man: Protecting America’s Secrets,” based on a true story. Mr. Moore is both unappreciated and unhappy with his career as an engineer at a glass insulation and fire-retardant firm. He is targeted on LinkedIn by a competitor who offers him a position in a rival firm. At first, Moore declines because he signed a non-compete. He is then offered $200,000 to obtain plans for equipment and formula for the glass insulation produced at his firm, RIS.

The FBI states many things drive a person to betray the company where they work.

The FBI states many things drive a person to betray the company where they work.

Moore makes the decision to go to his current boss who then contacts the FBI who initiates a sting. A true story, there was an arrest in the case. However, this may not be the decision every employee would make – which makes every employee a liability in a 400 billion, in the dark. underbelly of America’s global economy.

Spotting Insider Threats

What drives a mole? The FBI states company moles are often “overwhelmed by life-crisis or career disappointment” driving them to leak information.

With email, cell phones, and jump drives, stealing information is far easier than in the past. Greed and financial need, unhappiness at work, the promise of a better job, drug or alcohol abuse, and/or vulnerability to blackmail, can all be contributors, says the FBI.


The FBI says employees who leak trade secrets, such as plans, customer databases, etc. will exhibit behaviors other employees can often identify to help prevent breaches.

Your employees may be the first line of protection when combatting the insider threat.



Potential Indicators:

  • Drastic changes in behavior, demeanor, or work habits.
  • Unexplained affluence.
  • Financial hardship.
  • Substance abuse.
  • Attempts to circumvent security procedures.
  • Long hours at the office without authorization.
  • Taking home proprietary information.
  • Unnecessarily copying materials.
  • Using an unauthorized USB drive.
  • Unusual use of cell phone during business hours.
  • Asking inappropriate questions.
  • Suspicious relationships with competitors.
  • Leaving traps to detect searches of their office.

Based on FBI’s studies, additionally, there are more subtle things to look for:

  • Someone hired to steal company information will be experienced in the operation of a business and will be able to identify the value of your company’s trade secrets.
  • Corporate spies are everyone’s friend. To gain access to a company in order to steal information, a mole will be socially adept with the ability to manipulate people to gain their trust.
  • Individuals who are frequently wandering or talking in locations they do not need to be to complete their job. Someone who reflects a pattern will always have a reasonable excuse as to why they are not in the correct area or talking to specific employees.
  • Employees who keep trying to re-open decisions already settled and question advisability of decisions.
  • They act envious.

Vulnerabilities – Getting Access

Once inside, a mole has a lot of ways to access sensitive information. Spies can even work in pairs, possibly one as a consultant and the other an employee. When you have valuable information, never underestimate the methods others will use to gain access to it.

Spying can be as easy as photocopying papers found on unattended desks or at printers. Walking into an empty meeting room with a laptop and pulling data off the network.

A common ploy is pretending to be an employee. Another ploy often used, posing as IT personnel because it enables the individual to look legitimate while accessing network access points and sitting at someone’s computer. In other cases, spies have posed as cleaning staff, gaining access after-hours.

Criminals capitalize on the common assumption if you are in the building, you must be okay. Investing in your company’s staff to raise awareness is the best investment a company can make.

According to InfoWorld, Peter Wood, Chief of Operations at First Base Technologies, a U.K. based consultant firm performing ethical hacking services, “Spies are interested in anything from financial data to intellectual property and customer data. They might steal information for blackmail purposes, but the most common motive for physical intrusion is industrial espionage.”

Wood says the most common way to intrude upon a company is posing as an employee or a visitor, even creating convincing costumes to pose as a legitimate visitor such as telephone, electrical or maintenance person, a burglar alarm inspector, even someone from the fire department.

Protecting Your Trade Secrets

The FBI lists several ways to protect your workplace from insider threats.

  • Recognize the threat.
  • Identify and value trade secrets.
  • Implement a definable plan for safeguarding trade secrets.
  • Secure physical trade secrets and limit access to trade secrets.
  • Provide ongoing security training to employees.
  • Use protective tools such as screensavers with password controls.
  • Classify information and store accordingly.
  • Secure the workplace so visitors do not have access without security screening.
  • Encrypt data and require strong passwords for employees with liberal access rights.
  • Develop an insider threat program.
  • Proactively report suspicious incidents to the FBI before your proprietary information is irreversibly compromised.
  • Ask the FBI or other security professionals for additional awareness training.

At times, companies are hesitant to report such activity for fear they will risk their trade secrets being disclosed in court or compromised in any way. The FBI will do all it can to minimize business disruption, safeguard data and privacy, and will seek protective orders to preserve business confidentiality and sensitive information. The Department of Justice also has a variety of protections in place to ensure information is protected during a criminal prosecution.


Gangs in the Workplace: Corporate Investigations

Gangs in the Workplace: Corporate Investigations

By: Kym Pasqualini, Feature Crime Writer for Lauth Investigations

The days of red and blue handkerchiefs, baggy pants, graffiti, rap-music, and drive-by shootings are no longer such a popular sub-culture. Believe it or not, the new kind of gangsters hold college degrees, work and hold jobs in offices, warehouses, even government positions and police departments. They are a more sophisticated criminal and have infiltrated corporate America.

corporate gang

No more baggy pants. Today, you are more apt to find a gang member wearing black patent leather shoes.

If you think this is not a possibility in your own company, think again. No industry or company is exempt. A University of Chicago study found gangs have increasingly adopted a clean-cut appearance while replicating techniques used by organized crime.

Described as “very sophisticated and well organized” by the Federal Bureau of Investigation (FBI), they estimate there are 33,000 violent street gangs with 1.4 million members nationwide. You can safely double that number if you count affiliates and wannabes. The number has risen steeply, up from 1996 where an estimated 400,000 gang members were accounted for in the University of Chicago study.If you think this is not a possibility in your own company, think again. No industry or company is exempt. A University of Chicago study found gangs have increasingly adopted a clean-cut appearance while replicating techniques used by organized crime.

Well-known companies, Chicago Police Department, the United States Post Office, major pharmaceutical companies, and even the Social Security Administration have found gang members within their ranks carrying out complex illegal operations netting millions annually.

According to the FBI 2015, National Gang Report (NGR), gangs have gained employment in the U.S. Military, law enforcement, corrections, and even judiciary.

From the Streets to a Global Crime Empire

Typically, gangs are known for drug trafficking, robbery, gun trafficking, intimidation rackets, prostitution, human trafficking, fraud and other crimes you may think would not infiltrate a common company. Now, they are. However gangs are concentrating their efforts on white-collar crime due to weaker sentencing guidelines and ease of making money.

The term “gang activity” involves identity theft, credit card fraud, prescription drug fraud, trafficking stolen goods, money laundering, mortgage fraud, Social Security Administration fraud, tax fraud, counterfeiting, and securities marketing manipulation. Where there is access, there will be individuals willing to participate in capitalizing and even selling their access to those interested in exploiting the system.

credit card
In New Jersey, the 111 Neighborhood Crips used a machine to make gift cards they distributed to grocery stores, pharmacies and other stores. Grand larceny accounts for 40% of all crime in the United States during 2014.

In 2015, the Outlaw Gangsta Crips in NYC made approximately $500,000 in a paycheck fraud scheme by obtaining a legitimate paycheck from an employee and using the information to create and cash counterfeit checks.

From 2004 through 2009, fraud investigations alone increased 33%, bringing losses associated with those schemes into the billions of dollars.

According to Fox Business, Gangs such as the Bloods, Crips and La Nuestra Familia are undertaking white-collar crime. They are recruiting members that possess the necessary skill-sets, according to the FBI.

When you think gangster, images of Joe Pesci and Robert De Niro, maybe even Snoop Dog, may come to mind, not the impeccably dressed executive working in a high finance position. Or, the nicely dressed woman at the bank who knows how much you deposit weekly or the amount of your company’s payroll.

In a Workforce Magazine article, “Have Gangs Invaded Your Workplace,” during 1995, California, Silicon Valley firms alone were hit with more than 50 armed robberies of microchips and electronic components with the average heist netting the robbers $400,000. “There’s a growing level of sophistication and opportunism,” says Keith Lowry, a detective in the High-Tech Crime Unit of the San Jose Police Department.

Gang members are becoming harder to weed out in the hiring process, much of the time because we commonly think of “gang members” as looking like street thugs, and these old stereotypes are costing companies billions annually.

guy in suit

Weeding out white-collar gang members has become increasingly difficult.

Any company can become a target or an opportunity to engage in illegal activities, like dealing drugs, theft of property or personal information, extortion. Gangs have learned they can make a lot more money by being well-dressed, educated, and articulate.

For instance, electronics firms are easy targets. A microchip or computer processor weighing less than an ounce can score several hundred dollars on the street. The sentence for being charged with a stolen microchip much less than selling an ounce of drugs.

Some gangs plant members within a company in specific department such as infiltrating dispatching, shipping or the financial departments. They can also pose as temporary workers or work for outside vendors to gain access to numerous companies.

In addition, the growing trend toward outsourcing can often lead to less control over merchandise, files, and information.

According to a Fox Business article “From the Streets to Cyberspace: U.S. Gangs Turn to White Collar Crime,” the FBI says, “Gangs are more adaptable, organized, sophisticated, and opportunistic, exploiting new and advanced technology as a means to recruit, communicate discreetly, target their rivals and perpetuate their criminal activity.”

Facebook has become the preferred method for gang members to communicate according to the FBI. “The proliferation of social networking websites has made gang activity more prevalent and lethal – moving gangs from the streets to cyberspace,” says the FBI.

Arming Your Human Resources Department

Much of the solution lies in ensuring Human Resources procedures are effective. Of course, background checks and screening procedures are vital but is there more to be done to detect a potential criminal trying to infiltrate your workforce? The first thing to keep in mind – you get what you pay for and being lax can cost you.

Local criminal checks are almost worthless; however, a full criminal screening can pay off. In addition, many applicants may have earned their GED in prison, with some digging, their history can be discovered.

Many companies cut corners and haphazardly follow procedures when screening applicants not realizing dealing with the aftermath can result in costing more when you compare it to properly vetting applicants the first time around.

Additionally, letting your applicants know you will be conducting a thorough background, previous employment, driving records, verifying degrees, criminal record check, and reference checks can also discourage many applicants from pursuing the position in the first place, which ultimately saves your company time and costs associated with the screening process.

What is important to consider is applying an effective screening procedure to contractors, consultants and temporary employees depending upon how much access they may be granted, as well as, the time they will be spending at your company.

Trusting a “temp agency” is conducting the appropriate background checks is a potential liability for your company.

Educating your employees on how to spot gang activity and how to handle it is crucial. Some companies have found having training sessions and employee meetings add to their success combatting gangs in the workplace.

Experts agree loyalty to gangs overrides loyalty to an employer. Even though they may try hard to blend in they may still slip occasionally and there are some recommendations or even subtle things to monitor.

  1. Does your employee reside in a known gang area?
  2. Is your employee responsible? Too much time on the phone or arrive late?
  3. Does your employee go by a nickname and have nicknames for friends?
  4. Do the clothes, colors or insignias stay consistent?
  5. Does your employee have visitors at work, friend or family?
  6. Have you noticed any graffiti in or around your workplace?
  7. Does your employee use verbal, hand or walking mannerisms that could be associated with gang activity?
  8. Is your employee on parole or probation?

Being a girlfriend of a gang member or being a current or former gang member is not against the law, but it could be a sign of other activity that could be detected if your HR department is cognizant of the many issues that face companies if infiltrated.

Using Private Investigators to Combat Gang Intrusion in the Workplace

Private investigators are a commonly used tool in the arsenal to combat “gang intrusion” along with malingering, theft or fraud in the workplace.

Along with surveillance and providing evidence, they can also evaluate your HR department’s policy and procedures through undercover placement or working along with the HR department to tighten up the reigns to reduce incidents of crime.

Many times, it is recommended to have a private investigator apply for employment without informing anyone in your company to best determine where weaknesses exist in the hiring process. Were all the references called? What questions were asked? Were the proper background checks completed?

It may be necessary to start at the beginning of the hiring process. In addition, private investigators can be placed in certain departments where there have been discrepancies identified to collect evidence admissible in a Court of law. It is an extra layer of protection when investigating activities at your company without violating privacy laws.

When a company suspects criminal activity, it is advantageous to hire a professional who will work with police if the legitimate criminal activity is, in fact, detected. Abuse of sick leave or malingering costs companies billions of dollars a year. This is enough to warrant the hiring of a private detective to legally document the behavior.

From filming a guy talking about starting his new business and hinting at using the employer’s database, to a meat manufacturing plant taking a cut of the supplier’s delivery, to the employee watching porn on the company computers, a private investigator can take the care needed to conduct an internal investigation legally, ultimately protecting your company and saving you a lot of money.

Opiates in the Workplace

Opiates in the Workplace

Is Your Employee a Drug Trafficker? Opiates in the Workplace

Hydrocodone Pills

According to the Centers for Disease Control and Prevention (CDC), sales of prescription opioids quadrupled during 1999 to 2014. Referred to as an opioid crisis in America, it seems we all know someone battling an addiction to prescription medications.

Opioids include prescription pills (including Vicodin, Oxycontin, and Percocet), as well as Heroin and Fentanyl, a drug that can be injected, taken as a lozenge or through a skin patch.

Nationwide 1 in 4 people who are prescribed opioids will struggle with addiction. The depth of the problem is highlighted in a disturbing CDC post stating, “Almost all prescription drugs involved in overdoses come from prescriptions originally; very few come from pharmacy theft. However, once they are prescribed and dispensed, prescription drugs are frequently diverted to people using them without prescriptions. More than 3 out of 4 people who misuse prescription painkillers use drugs prescribed to someone else.

In addition to the personal toll to the addicts and the American family touched by opioid abuse, the CDC also estimates the total “economic burden” of prescription opioid misuse alone in the United States is $78.5 billion a year, including the cost of healthcare, loss of productivity, absenteeism, increased injuries, addiction treatment, theft, criminal justice involvement, and legal liabilities.

The Substance Abuse and Mental Health Services Administration (SAMHSA) estimates 68.9% of all drug users are employed.

The Drug Enforcement Agency estimates employed persons who misuse opioids account for 64.5% of medically related absenteeism and 90.1% of disability costs.

The use of opioids in the workplace is a growing battle for American business. According to a National Safety Council (NCS) survey, 57% of employers perform drug tests. However, more than 40% do not test for synthetic opioids like oxycodone, one of the most abused narcotics on the market, making accurate national statistics unreliable.

An NCS survey also found 29% of employers reported impaired job performance due to use of painkillers, with 15% citing injuries due to drug use. Up to 70% of employers said their workforce has been negatively affected in one way or another.

The Impact of Drugs in the Workplace

Use of drugs impairs decision making and causes physical impairment, a deadly condition when at work. It causes an overall decline in employee morale, an unsafe working environment and increases employer liability.

It is estimated at least 1 of 6 employees use drugs at work and the toll on the workplace is costly in the following ways:

  • Addicts are 1/3 less productive than their counterparts
  • Five more times likely to cause accidents
  • Are absent up to 20 times more often
  • Five times more likely to request workers compensation
  • Contribute to 40% of all industrial work fatalities
  • Health care costs for addicts is three times higher than other employees
  • Admitted to selling drugs to coworkers
  • Admitted to stealing from employers and coworkers

It is estimated 70% of 14.8 million Americans who use illegal drugs are employed. It is safe to assume if you have drug abusers on the job, you probably also have drug dealers operating within your company.

As drug dependency increases, it is common for addicts to buy drugs from friends or coworkers and even steal from their company, co-workers and clients.  

Experts have also found the number of heroin addicts have increased as it is common for an opioid user to transition to using heroin when they begin running out of pills and money. Heroin is significantly cheaper than opiates and easier to obtain. Heroin laced with Fentanyl is becoming increasingly popular because it can be 50 times stronger than heroin.

The drug dealer of today is no longer the shady guy driving a decked-out Cadillac, meeting his clients in a dark alley or an unlit street corner. Dealing drugs to coworkers is preferred over standing on the corner selling to strangers and for a drug trafficker, less risky.

At work, a dealer has an employed clientele able to afford the drugs, and someone they can establish trust with while selling under the radar of management in the restroom, parking lot, lunch-room or cubicle.

Oftentimes workplace dealers will sell drugs on credit or a “front” according to the book Undercover Investigations in the Workplace by Eugene Ferraro. Drugs are sold to an employee with the agreement of paying later, usually on payday. Co-workers make the perfect client for a drug dealer and quite a lucrative business, with one Oxycontin pill demanding up to $50-$80 each on the street according to a CNN Money article Prescription Drugs Worth Millions to Dealers.

CashAccording to Ferraro, “We have caught employees-dealers (earning less than $10 an hour from their employer) who never carried less than $10,000 cash to work.”

Paydays are usually the biggest days for drug trafficking activity. However, to pay for drugs, addicts often turn to their employers to fund their habits.

With addicts in the workplace, there is a higher incidence of theft of equipment, tools, products and part inventories where drug trafficking and abuse is occurring. Aside from being at increased risk, both abusers and drug dealers are more likely to become involved in additional criminal behavior, stealing from their employers and fellow employees.

What are the signs of drug trafficking and abuse in the workplace?

Are certain employees driving an expensive car far beyond the means of what they make working? Flaunting money? Are your employees leaving without notice to meet clients? High turnover and absenteeism and/or meeting in the bathroom or parking lot? What may appear on the surface to look like comradery, could be a sign of something more.

Robert Avery, 41, worked as the Parental Involvement Director at a Head Start program in Gadsen, Alabama. Instead of offering educational and health services to low-income children, Avery was arrested for selling the prescription drug “Roxycontin” to undercover agents from the program facility.

Robert RokardEven police departments are not immune. November 20, 2017, Jellico Police Department Dispatcher and Fireman Robert Rookard, was arrested in “Operation Thanksgiving Harvest” for selling drugs at work.

In August 2017, more than a dozen Atlanta USPS workers were rounded up for running an illegal drug distribution operation. Sixteen employees working at post offices across Metro Atlanta were arrested for accepting bribes in exchange for delivering kilogram packages of cocaine.

When the FBI received a tip that drug dealers were running packages of drugs through the mail system, they began an 18-month sting putting a fake drug dealer on the street to see how many postal workers they could get to sign up. In a bribery agreement, workers agreed to provide special addresses to the drug trafficker, intercepting and delivering the packages to the dealer, who just happened to be working with law enforcement. The number of postal workers who agreed to participate astounding.

While some companies may assume there is no liability for the actions of an employee, one company is feeling the devastating effects. According to the October 13, 2017, Chicago Tribune article, “Oak Park appeals board upholds pantry’s closure after employee accused of selling heroin,” it was reported The Village of Oak Park in Chicago closed the Austin Food Pantry after 55-year old store manager Edgar Lucas was arrested on 17 counts of heroin sales and possession at the establishment. Charges include 5 counts of unlawful delivery of a controlled substance determined to be heroin. In the aftermath, the city revoked their business license.

In an appeal, the store owners stated they had no knowledge of the employee’s drug activities; however, Village of Oak Park trustees upheld the decision to permanently close the business. In a written ruling, trustee Cara Pavlick said Austin Pantry owners were “negligent, reckless and careless at a minimum in allowing their business to be operated as a place for the sale of illegal narcotics on numerous dates.”

Austin Pantry

Drug use and trafficking are often difficult to spot and many times even harder to prove. However, every employer and Human Resources department has a responsibility to ensure a safe environment for all employees, immediately addressing any infraction or suspicion to reduce liability within the workplace and protect your company.

Private Investigators – A Weapon in Battle to Reduce Illegal Drug Use

An internal investigation sometimes involves drug-testing, some use dogs, and some use undercover operatives. Wall Street and other large corporations began using private investigations long ago with the demand ever increasing.

General Motors (GM) reported substance abuse by some of its 472,000 employees and their dependents cost the company $600 million in 1987. To combat the problem, GM instituted undercover operations at 10 mid-western plants and said it would not hesitate to use such investigations in the future. That was then, and drug use in the workplace has only increased.

While employers are encouraged to practice a covenant of good faith and dealing with all employees, protecting the workplace should be the primary goal, and often requires professional private investigators to work alongside law enforcement to ferret out drug use and other illegal activity.

Conducting a private investigation not only reflects your company as being proactive, careful documentation can help achieve a conviction and reduce liability.

Thomas Lauth, owner of Lauth Investigations International, specializes in undercover investigations for both blue-collar and white-collar companies. Having spent over 20 years in the field as a private detective, he believes diligence is key to combating workplace crime. “One can never be too careful or diligent when protecting their company. When working with clients, we tailor our investigation to the needs of each individual client.”

When hired by a client, Lauth’s investigative team provides an assessment and tailors the investigation to the needs of the specific case. Working with Human Resources, the business is profiled to determine the best course of action.

The most effective way to detect drug trafficking and abuse in the workplace is to conduct a covert investigation planting an investigator within the company. Typically, the investigator goes through the hiring process like any other employee, informing minimal staff, allowing the undercover private investigator to protect their identity and integrity of the investigation.

From there, the investigator fits in with employees, developing friendships to gain information about drug activity. In Lauth’s experience, “Many times, our investigators uncover additional illegal activities, resulting from the initial investigation,”

Periodic background checks can also assist companies in identifying employees who are high risk for illegal activity. “At Lauth Investigations, we recommend conducting background checks of all employees, newer employees as well as those who have worked for the company for several years. A lot can change after the hiring of an individual,” Lauth says.

For those who may be concerned office morale may be damaged, Lauth points out a background check can be conducted legally without the employee’s knowledge. “Background checks can reveal drug offenses, fraud, theft and other criminal activity on record with a police department or court and one of the most important steps a company can take to protect their company.”

For more information contact Thomas Lauth, Lauth Investigations 317-951-1100.

Written by Lauth Investigations Feature Writer Kym Pasqualini.


Insider Intellectual Property Theft

Insider Intellectual Property Theft

Top Secret File

Spies, Espionage, and Intellectual Property Theft

Government and military entities are not the only ones spying and conducting espionage investigations to protect our national security. More and more corporations and even small businesses are now hiring expert private investigators to conduct espionage investigations and counter-surveillance to protect “trade secrets” and other classified information.

Cases of economic espionage, industrial espionage, corporate spying and corporate espionage are commonly conducted for commercial purposes but can also include personal information that can later be used to blackmail, discredit and control enemies and competitors.

Espionage or “Insider theft” can cause significant personal and financial harm and described as an individual obtaining secret information without the explicit permission of the owner. For example, a corporation or company spying on another company’s activities, collecting data and information for gain or cause damage, most commonly through the doorway of employment.

Espionage involves clandestine activities. Though methods and motives of spying have changed over time, the desire to uncover competitor’s secrets has not. There is a war going on, and spying the primary weapon.

Federal Effort to Combat Economic Espionage

According to a 2015, CNN Politics Report “FBI Sees Chinese involvement amid a sharp rise in economic espionage,” the FBI announced the bureau has seen a 53% increase in economic espionage and intellectual property theft cases leading to the loss of billions of dollars.

Cyber ThreatThe FBI concludes “insider threats” or employees familiar with the inner workings of a company who obtain sensitive industry secrets in exchange for large amounts of cash are becoming more common and pose a significant threat to companies worldwide.

To combat this ever-increasing menace to American businesses, the FBI produced a video “ ” to raise awareness.

Private investigator Thomas Lauth, CEO of Lauth Investigations International, says, “Global trade of fake goods is damaging U.S. markets, along with theft by U.S. retail workers.”

Pirated and imports of counterfeit goods are worth nearly half trillion dollars annually with much of the proceeds going to organized crime, according to the OECD and the EU’s Intellectual Property Office.

Trade in Counterfeit and Pirated Goods: Mapping the Economic Impact,” reports fake products like footwear, handbags, even strawberries, are commonly presented to the U.S market. While there is significant financial damage occurring, products like pharmaceuticals, toys that are harmful to children, baby formula, and failing auto parts are endangering lives.

According to former Attorney General Loretta Lynch in a 2015 Department of Justice press release, “The digital age has revolutionized how we share information, store data, make purchases and develop products, requiring law enforcement to strengthen our defenses against cyber crime – one of my top priorities as Attorney General, “said Lynch. “Companies like Sony and Target – have demonstrated the seriousness of the threat all business face and have underscored the potential for sophisticated adversaries to inflict real and lasting harm.”

While the Attorney General’s Office, FBI, Homeland Security and law enforcement are allocating more resources to combating intellectual property theft from dangerous outside adversaries, companies throughout the world are encouraged to take the necessary steps to protect their own intellectual property from outside and insider threats.

Insider Theft of Intellectual Property

Experts maintain upwards to 70% of a corporation’s value is found in Intellectual Property (IP). Insider threats come from the inside because the “thieves” are given access to their day-to-day employment.

The value of an organization’s secrets, product plans, customer data, and price lists cannot be underestimated. It becomes necessary to find a balance between productivity and protocol that allows a watchful eye to protect sensitive data and detect insider threat activity. Operational staff should be prepared with information to help them better understand how insiders can damage their agency, and in the various methods used by insiders. They are the front line to help battle IP theft crimes.

Insider Attack StatsInsider thieves commit crimes for varying reasons, to include gaining a competitive business edge, to start a competing business, or personal financial gain.

It is not uncommon for thieves to use networks to send internal server data outside of an organization. The most common method of stealing data is the use of external media such as a writable CD or USB mass storage device. Using corporate email accounts to send information off-site to personal emails and competitors is also common and requires monitoring to prevent such abuse.

It is necessary for organizations to identify risks and develop standards of best practices and policies that address the many ways IP can be exploited. These should include but are not limited to IT Security, removable media policy, controls and inventory, physical security, logs, and indexing tools to identify patterns in behavior. It is especially important to implement heightened security measures during reorganization, acquisition, downsizing, mergers or other organizational events.

Non-Compete Agreements Protects the bottom-line

Employee departures resulting in the scheming of trade secrets and clients has increased significantly in recent years. Many employees leave their employment to begin a similar start-up or pursue freelance work. As a result, it has become common for former employees to approach old clients, steal data, marketing materials and even share negative information to damage their former employer’s credibility.

According to a Wall Street Journal report, with the help of investigators, over the past decade, there has been an increase in the number of departing employees being successfully sued by former employers for breaching Non-compete Agreements (CNC).

Considered one of the most effective ways to prevent the theft of a company’s secrets, having a Non-compete in place and requiring every employee to sign it, can prevent damages that could otherwise last years.

Private investigation firms are playing a significant role in the effort to safeguard information, the detection of costly breaches and providing an evidentuary solution presenting facts when litigation is necessary.

Lauth Investigations International is working to prevent intellectual property breaches, global piracy, counterfeiting and insider threats with data mining experts and field investigators who focus on safeguarding IP and detecting violations utilizing sources that are not commonplace to HR and Operations Supervisors. “It is vital to be able to detect violations to prevent violators from reaping profits and expanding their worldwide market, where damage can extend for years,” says Lauth.

Brand Protection areas include:


Music and Apps

Tools and Hardware

Cosmetics and other Products

Logos and Authentic Branding

Indigenous Rights

Author Rights

Content and SEO Detection and Protection

Plagiarism, Marketing Materials and Website Protection

“Our investigators conduct trademark infringement for brands, large and small, trekking through some of the most complicated cases and vast markets such as Hollywood celebrities, apparel, and electronic clients,” says Lauth. “Our team provides intellectual property and litigation support for small business and corporations working with corporate executives, HR, and those in Operations Supervision to provide research and investigations, crisis intervention, employee screening, vendor and supplier screening, electronic discovery, surveillance, loss analysis, and expert testimony if needed.


Working to protecting your brand

Brand Protection Image

“Our private investigation firm will not only work with key staff and operations supervisors to identify current and potential breaches, we work with companies that operate throughout the world to implement the right policies and safety protocol to help protect their IP into the future,” says Lauth.

Lauth Investigations offers free consultations and guidance to help protect your brand. Following are a few tips to help you better protect your IP.

  • Protect web content and marketing materials by utilizing a DMCA account and protection badge.
  • Think globally. Obtain trademark protection for worldwide protection.
  • Set up a Google Alert to police your brand.
  • Obtain IP Protection for Copyrights, Trademarks, and Patents.
  • Register trademarks with the US Patent Office.
  • Develop a Policies and Procedure Handbook and have each employee review and sign.
  • Utilize Marketing Analytics software such as TrackMaven and Travel IQ for online tracking.
  • Monitor unregistered infringements.
  • Create various divisions for a more controlled environment.
  • Create a distinctive mark.
  • Develop and implement a Non-Compete Agreement.

For more information about how you can protect your IP, please visit or call 317.644.2788.

Kym Pasqualini, Lauth Investigations Feature Writer

5 Common Ways Employees Commit Fraud

Small business owners have so many things to consider at any given time. As a small business ourselves, we understand this. Day to day concerns regarding employees, inventory, pricing, and customer satisfaction take a significant amount of time and effort, leaving little room to worry about potential crises that could eventually happen like employee theft. We do not like to imagine the worst, and often try to live our day to day lives assuming the best. Unfortunately, this lack of focus on security makes small business owners especially vulnerable to employee theft.


Employee theft is the cause of failure for 30% of failed small businesses, and the median amount lost is $147,000.00 This is why it is so important to learn the signs of employee theft so that you can detect it early on. This blog article explains five common ways that employees commit fraud so that you can be on the lookout and catch problems before it is too late.


  1. Billing fraud- In this case of fraud, an employee would send out invoices to customers for products and services that were not actually rendered. This sort of fraud is common in the healthcare industry as well as for online subscriptions like web domain renewal invoices. Make sure that you have an extra set of eyes overlooking all invoices: not just the ones that come to your company, but the ones that are sent out. If you are a small business, you may have an employee that is sending out extra invoices to your clients and collecting the extra cash without you even realizing it.
  2. Kickback arrangements– Kickback arrangements are a type of fraud where an employee makes a deal with a certain supplier or partner to participate in a corrupt act such as inflating an invoice for products, and then gets a “kickback” payment as a reward for colluding with them. A recent example of this is the nearly 1 million dollar kickback scheme involving the Detroit Public Schools, where a school supply vendor provided kickbacks to more than 12 school employees in the Detroit Public School district in exchange for fraudulent invoices. Kickback arrangements are dangerous and highly illegal, but they can go on for years without being perceived. Again, make sure you look over all of the invoices coming in and out of your office to make sure that there are no extra or non-existent payments.
  3. Check tampering– Check tampering is usually a case of an employee stealing company checks and writing them out to him or herself, but it can also be a case of an employee intercepting outgoing checks and cashing them in their own account. The majority of check tampering happens in small businesses and employees who are guilty of check tampering most frequently come from the accounting department. Make sure that you physically keep your checks secure, but also double check your bank statements for all cashed checks to make sure they are valid and that you wrote them yourself.
  4. Skimming– Skimming is basically any example of where the full sum of a profit is not reported and some of the money is directly pocketed by an employee. Usually, employees practice this type of fraud by “skimming” relatively small amounts of money off of multiple purchases over time. Skimming can come from any area of your company: it could be employees who sell products that give things away for free to friends (or pocket them for themselves) or, on a larger scale, it could be accountants who record sums a little bit under the actual amount. Catching skimming can be hard. One of the best things to do is choose random transactions and double check them with your bank statement, and let your employees know that you are on the lookout for skimming. Knowing that they have a manager who is watching out for these kinds of tricks can help keep people in line.
  5. Expense reimbursement fraud– In expense reimbursement fraud, employees somehow tamper with their business expenses in an attempt to get reimbursed for personal expenses and purchases. This could be anything from a tank of gas to an expensive flight. Expense reimbursement fraud can happen at any level of your business, but it is usually upper-level employees (who often travel or host clients as a part of their position) who commit expense reimbursement fraud. To prevent expense reimbursement fraud, it is important to review all expense reports carefully and insist that your employees provide documentation (and explanations) for each expense.


If you notice any suspicious activity that leads you to believe an employee is committing any of the above forms of fraud, don’t panic. There are steps you can take to handle situations of employee theft correctly and calmly. Check out our blog, How to Suspect if Someone is Lying to You for tips on how to handle a suspicious employee.