Find the Thief in Your Business with a Private Investigator

Find the Thief in Your Business with a Private Investigator

A private investigator can identify employee fraud and thief in your workforce, eliminating future threats while maintaining objectivity.

Despite the ability of a business to flourish in any economy, every company is still vulnerable to the possibility of employee theft or fraud. Like a frog in a boiling pot, sometimes companies can be taken by surprise when the theft has gradually grown over a period of time, and no one is the wiser until the business takes an unexpected financial hit. Companies can protect themselves from these frauds with costly in-house investigations into the crime, but a private investigator can go a long way towards identifying all perpetrators, no matter how high up the chain of command it goes.

Recent statistics from several government agencies who supervise finances and labor estimate theft committed annually by employees reaches an excess of $50 billion. Even an isolated incident can blanket a company in a crisis and leave them clawing out of the depths of bankruptcy. It starts with small things, such as taking office supplies for personal use. When this action goes unchecked, the employee might begin taking from petty cash without authorization. The level of the theft will always ratchet up the longer the thief goes undetected.

When an investigator attempts to identify employee fraud is knowing what to look for. Elliot Rysenbry of Trustify says there are six warning signs of employee theft for which Human Resources should be vigilant.

  • Workaholics
    • Behaviors of people who might be very dedicated to their jobs are also characteristic of people who might be stealing from your business. People who are always working long hours and never take a vacation. This “dedication” is a front for superiors. People who are stealing via their position do not want to be absent from the workplace for fear a temporary replacement might notice inconsistencies that could indicate fraud.
  • Hyper-vigilance of connections
    • When an employee has a close personal connection/relationship with any vendor or associated financial institution, it’s usually not cause for concern of impropriety. However, hyper-vigilance or strong protection of those relationships, it’s possible there’s something in the business arrangement for this employee. One of the most common names for this kind of fraudulent arrangement is “kickbacks” or getting a cut of the profits vendors or financial institutions receive from a thieving employee.
  • Inflated expenses
    • This is one of the most common types of theft committed in the workplace. Line items on expense reports are either inflated or fabricated entirely in order to pad the thief’s pocket.
  • Extravagances
    • Payroll knows what individual employees make week to week, so when there are unexplained extravagences in an employee’s life, such as a flashy new car, it’s important HR keep an eye on said employee.
  • Frequent small transactions
    • Taking from petty cash in small amounts can add up quickly, and is often a sign of more serious, larger-scale fraud being committed within the company.
  • Entitlement
    • Employees who feel as though they are underpaid or undervalued at their company are also plausible perpetrators of theft. Whether as a motive or a rationalization, they feel as if what they stole was deserved payment.

While theft can be an extremely toxic element in any work environment, one of the ways to exacerbate it is by conducting a poor internal investigation. Human Resource employees are unsung heroes of companies and businesses, as they are one of the crucial gatekeepers with control over the quality of employees. Not only are they very busy individuals, but they might not be the most objective persons to conduct an internal investigation.

Sometimes a lack of experience with investigations will cause a member of HR to make false or unprepared accusations about the guilt of a particular employee. If this employee is unimpeachable, the company can open itself up to lawsuits and bad press. Even if HR is not conducting the investigation, most employees are not trained investigators and might conduct an inquiry in an illegal manner that could also open the business up to litigation. Sometimes a pay cut for an employee suspected of stealing might seem like a quick and quiet way to resolve these issues, but legal counsel should always be consulted before making these decisions. By the same token, hasty termination of these employees to avoid a messy investigation should always involve the opinion of a legal expert—all in the name of protecting the country from plausible legal trouble.

The simple answer to avoiding all of the aforementioned ways to inflame an internal theft investigation is to retain the services of a private investigator. Private investigators can save companies from themselves in terms of opening themselves up to litigation or bad press. Private investigators have more skill and experience in these areas preventing investigations from blowing up in a negative manner. They are independent contractors, therefore, do not have a dog in the race when it comes to identifying the culprit of the theft. Their objectivity will be crucial, especially if the theft within the company goes all the way to the executive level. Because of their authority over employees, CEOs of companies might often get a soft front from HR or other investigative bodies within the business. Private investigators—being unknown to other employees in the business—can also conduct undercover operations to yield truthful and unbiased results. The private investigator, along with business counsel, can also advise Human Resource departments how to proceed once the culprit has been identified. Whatever the specific needs of a company, always consider hiring a private investigator to conduct internal investigations in order to protect and enhance the longevity of your business.

Identify employee fraud and theft today with Lauth Investigations International. Call 317-951-1100 or visit us online at our website for a free quote.

Investigating Employee Malingering

Investigating Employee Malingering

Investigating Employee Malingering

Over the past weekend, many Americans participated in St. Patrick’s Day festivities in their community. With the 17th of March falling on a Sunday this year, many service industry establishments held events and promotions all weekend, which for many employed individuals meant three days of imbibing and socializing. After all of the excitement and green beer, it’s no wonder that March 18th is one of the most common days for employees to call off in the entire calendar. Consequently, there is a spike in employees who are suddenly experiencing “flu-like” symptoms, including sweating, headaches, and stomach upset—employees who are calling in sick who could very well just be hung over. This is what employee malingering looks like, and it can have disastrous impact on businesses and corporations throughout the country.

Employee malingering can be a difficult subject, as it usually falls under the umbrella of other sensitive topics, such as FMLA abuse. Some companies do not feel comfortable investigating possible abuses of FMLA, and do not probe into suspicions of malingering. Often, however, sometimes it’s just a matter of an employee who has a chronic case of the “sniffles.” Malingering employees have a pattern of faking sick in order to get out of working. This can be for a single day Malingerers cost companies across the country billions of dollars a year, with exponential costs of investigation and possible litigation, laying heavy blows to a company’s profits.

Malingering is preventable, but only if an employer provides consistent and accommodating policies concerning their employees’ physical and mental health needs. These enforced policies will leave no single employee feeling victimized by a vindictive supervisor or employer. If your company requires employees to document visits to the doctor, then there should be no exceptions in to that rule, barring extenuating circumstances. After all, asking for documentation is one of the best ways to prevent malingering, because employees who would simply rather stay home will be reluctant to spend their day in the doctor’s office as an alternative. This consistent enforcement of company standards also adds another veneer of integrity that becomes valuable in later stages of any investigation. It’s also important for an employer to remember that there must always be room to accommodate an employee’s needs.  Unreasonable, aggressive policies with regards to sickness can make a work environment unhealthy, both in the physical and metaphysical sense. Employees who don’t feel free to take a sick day when they have an actual illness can spread it to the entire workforce. Employees who also feel as though their needs are not being accommodated can be resentful and their work performance may suffer as a result.

Just as the case with FMLA abuse, in order to have an objective investigation into any honest suspicions of malingering, it’s crucial to retain the services of a external, third-party, private investigator. Investigators appointed from within a company to investigate suspicions of malingering may know the ins and outs of a business intimately, but are objectively useless when it comes to investigate one of their own. For starters, if this employee is well-known to much of the workforce, they will be easily spotted when conducting any surveillance on an employee who is suspected of malingering. They will be recognized and the employee will immediately be on their guard. If an internal investigator is not licensed by the state, they may not know the legality of their methods and it can taint the investigation going forward. Private investigators—while having more autonomy than law enforcement—still must operate within state and federal law. Private investigators are trained to gather and document evidence and interview witnesses to corroborate their observations of a malingering employee’s movements. Any business owner knows that investigating employees for any reason has the potential to lead to litigation, and during those proceedings, an objective, third-party investigator is the one with the most integrity during deposition or testimony, as they do not have a stake in the outcome of the case.

If you suspect an employee of yours is malingering, then lay the groundwork for a solid investigation by retaining the services of a qualified licensed investigators. When it comes to taking the steps to investigate employee malingering, an employer must begin with what’s called “honest suspicion,” which is pretty self-explanatory. When an employer investigates a malingerer with honest suspicions, the decision to hire an external investigator to do so continues the transparent narrative in which the employer acts in the best interest of the company. Hiring private investigators to maintain objectivity not only make for a quality investigation, but also foster a culture of integrity and mutual respect within any company.

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Investigating Non-Compete Violations

Investigating Non-Compete Violations

non-compete violationWhen growing a business, executives and owners have to go the extra mile when it comes to protecting trade secrets. In the pursuit of their company’s business, a common practice for corporations of all sizes is implementing non-compete clauses in their employees’ contracts. This ensures, should an employee leave the company for any reason, they cannot utilize trade secrets for the purpose of building a similar business of their own. It’s in a business owner’s best interest to be preemptive in protecting themselves from client poaching, theft of company secrets, and possibly even slander when it comes to current and former employees who violate their non-compete agreements.

Though they go by several names and the laws concerning them vary state to state, non-compete agreements are generally a legally-binding contract between an employer and an employee, whereupon acceptance of a job offer by a company, an individual agrees during their employment and following their termination they will not enter into any competing business for a predetermined period of time. Whether it’s working for a company’s top competitor, or striking out in their own business, non-compete agreements protect trade secrets, sensitive company information, and prevent competing businesses from poaching successful employees with promises of a handsome pay-raise in exchange for the expertise they might have gleaned from their time at their previous position. This kind of information can range from client bases to business operations to future products and services. The duration of the non-compete agreement following an employee’s termination have to be well within reason, as no employer can permanently preclude a former employee from any line of work.

Not every company experiences difficulties by virtue of a former employee violating their non-compete agreement, and some companies do not see the need for non-compete agreements at all, but the consequences of trade secrets being used to steal a company’s business can have devastating effects, ending in the worst possible circumstances with a business closing and an owner in debt. Even if a company is able to quash a non-compete violation in court, the cost to the company in legal fees can be astronomical, especially for smaller businesses. That’s why it’s important for owners and executives to be preemptive and proactive when it comes to potential violators. Luckily, a private investigator can help at all stages of a non-compete violation investigation.

Human resource employees are the salt of the earth, and can have a great influence on how a company develops based on the individuals they select for their workforce. However, human resource employees are not lie detectors, and do not always have access to legitimate, comprehensive background screening tools. Background screenings and checks are among the most common service associated with private investigators. If there is something suspect in a candidate’s past, licensed private investigators have the tools and experience to find it out. Private investigators can pull a candidate’s criminal history, financial history, and interview persons in their lives who can speak to character and work ethic. They can also spot patterns in a person’s work history or lifestyle that could be high-risk factors in a hypothetical non-compete violation—things like transience, long periods between positions, or financial destitution.

Some malingering employees can’t wait to be terminated before violating their non-compete agreements. It’s not uncommon for these individuals to exploit trade secrets for their businesses own gain while on company time and dime. While on a business trip, an individual might use company per diem to buy drinks for a person who could be a potential investor in their new business. Employees might use company supplies to supplement their project, such as printers, fax machines, computers, and other equipment. Private investigators can conduct diligent investigations within a company’s workforce to root out the source of the theft. Private investigators can interview witnesses, including upper management and other staff, review vital documents like bank records, and conduct surveillance of the company’s operations as needed to expose the perpetrator. Their objectivity makes them an ideal candidate to conduct such an investigation because they do not have a stake in the outcome.

There are many circumstances under which a business owner might come to suspect a former employee has violated their non-compete agreement. Word might have traveled through business circles that a similar business is starting up. Employees might start disappearing in clusters. Clients may suddenly decide to sever business ties in favor of a new contender in the competition. Whatever transpires, one thing is certain—documenting and exposing this exploitation is imperative, because the consequences can be costly. Retaining a qualified private investigator who specializes in corporate crises is crucial to resolving non-compete violations quickly, before the exponential costs begin to erode profits. Private investigators can perform surveillance on suspected former employees to document their movements, record with whom they met, and collect evidence such as pictures of a brick and mortar establishment, marketing materials, vital documents, and filings with the Secretary of State. Private investigators can send undercover operatives to infiltrate a workforce to get information the business privy only to employees. They can also enlist the aid of a confidential informant—an individual already within the company to provide information. This requires quality interviewing skills and developing a natural rapport with potential witnesses, both important qualities in a qualified investigator.

When non-compete violations are at their ugliest, not only do violators seek to siphon off their former employer’s business by exploiting trade secrets and knowledge of their operations, but they can also play dirty by exposing this information publicly. Another method involves deliberately spreading lies about the competition in order to drive business towards the former employee’s company. That’s known as slander and it’s legally actionable. Documenting the perpetuation of these lies and proving they are in fact false are crucial in these cases. Diligent fact-finding is the cornerstone of any private investigator’s expertise. Private investigators can conduct cyber investigations to track down the users behind profiles that post false negative reviews, follow rumors back to their roots, and forensically track how information left the competition and made its way into the former employee’s business nucleus. They can implement many of the strategies aforementioned: surveillance, interviewing witnesses, documenting evidence. Slander cases tend to have a divisive they-said, they-said narrative, which is where a private investigator’s objectivity becomes invaluable once more. Private investigators have no stake in the solution of an investigation. Their independence coupled with their expertise and resume make them spectacular witnesses in any subsequent litigation.

When a company has a non-compete agreement in place, it’s important that executives and owners are proactive when performing a risk assessment on a potential employee. It’s important that a healthy company culture fosters good comradery, honesty, and a policy of “if you see something, say something.” Building a case against a former employee who violated their agreement can be time consuming at the expense of company resources. Dealing with the fallout from litigation can bring a reliable business to its knees. Private investigators can assist in all phases of any non-compete agreement violation, and retaining their services will go a long way towards a body of objective evidence and testimony that can resolve a company’s crisis.

If you have suspicions that a current or former employee has violated their non-compete agreement, contact Lauth Investigations International today for a free consultation on how we can help you! Call 317-955-1100 or find us online at www.lauthinvestigations.com. 

Carie McMichael is the Media and Communication Specialist for Lauth Investigations International. She regularly writes on investigations, missing person, and other topics in the criminal justice system. 

Active Shooter Training in the Workplace

Active Shooter Training in the Workplace

Active Shooter Training in the Workplace

active shooterSo far this year, there have been 297 mass shootings in the United States. Seeing as how November 1st is the 305th day in the calendar year, it would appear that the spike in active shooter events in recent years will not slow down any time soon. While schools redefine their safety protocols and implement programs that prepare students for these events, employers throughout the United States are also beginning to understand the importance of preparing their workforce for an active shooter event. The year of 2017 broke the record for the most mass-shooting deaths every recorded—112 deaths, well exceeding the amount in any other year in recorded history. In 2018, the Bureau of Labor Statistics published a report that showed another spike in workplace homicides. According to them, there were 83 workplace homicides in 2015, a number that skyrocketed to 500 for the year of 2018 alone. A terrifying 79% of those cases were the result of an active shooter. As a result, the desire for employee active shooter training has never been higher, with NPR reporting that as of 2016, 75-80% of employers are seeking qualified active shooter training to protect their workforce. The Department of Homeland Security has a myriad of resources on their website for dealing with active shooters. One of them is a pocket-card that outlines the characteristics of an active shooter event, “Victims are selected at random. The event is unpredictable and evolves quickly. Law enforcement is usually required to end an active shooter situation.”  Active shooters may fire at random, using no discernible criteria for their victims, but that arbitration should not be misunderstood. Perpetrators are deliberate, focused, and simultaneously detached from their task, creating a fatal perfect storm. active shooter The Department of Homeland Security also have their own guidelines to how private citizens should react during an active shooter event: Run—hide—fight. Run At the onset of an active shooter event, individuals should immediately identify an escape route, most likely a fire exit. While keeping their hands visible, they should leave their belongings behind and run to safety as quick as possible, assisting others if needed. Hide Once they’ve reached safety (or if escape is impossible) the Department of Homeland Security recommends hiding immediately in a location out of the shooter’s line of sight. Individuals should block the door or manner of entry into their hiding spot and silence their cell phones and pagers. Sit very quietly and wait for first-responders to find you. Fight The Department of Homeland Security lists this option as an absolute last resort in the event of an active shooter in the workplace. Your life should be in immediate danger, and you should be well-positioned to act with physical aggression and incapacitate the shooter. Many third-party security companies also endorse the methods of Homeland Security, but there are others that take a different approach. Laurence Barton, a workplace violence expert, recommends employers seek training programs that promote a culture of safety and preparedness—not fear. In lieu of careful research regarding active shooter training, many employers opt for the simple, cost-effective route by showing employees the prolific training video produced by the city of Houston, which features graphic depictions of employees being shot. “When some companies have created these videos that show blood and guts—that’s not in any way the kind of learning that stays with people. In fact, it repulses them…employees get scared,” Barton says, “I just don’t believe scaring people is the way to teach them. It just promotes anxiety.” Aric Mutchnick, the president of a risk management firm called the Experior Group, agrees with Barton, “Cops or military guys like to have it very realistic because they think the more real it is, the more they can find out. That is true if you’re a tactical team, but you can’t apply tactical training to a civilian population.” Mutchnick points out that the equal distribution of choice laid down by the Department of Homeland Security—run, hide, or fight—is not only dangerous, but unrealistic, “It should be 90 percent run, 8 percent hide until you can run, and then as for fight, really? Are you kidding? I don’t know how you would even train on that.” Companies like Experior Group also recommend that a base knowledge of firearms should also be part of the training, not so employees can operate firearms, but so their knowledge can inform their escape. Civilians who are ignorant of basic firearm operations can easily be paralyzed by fear because they are uncertain of a weapons range or magazine size. This gives an active shooter ample opportunity to change their position and reload without fear of retaliation. active shooter Frozen with fear—it’s something we can all relate to. After all, many working people today are not acclimated to the viable, potential threat of an active shooter in the workplace. Aggressive, hyper-realistic training can compound the anxiety triggered by the increased probability of being involved in an active shooter event. That’s why Barton and other like-minded professionals epitomize on a feeling of safety, with straightforward and honest training that will leave any employee feeling prepared. “The chief learning officer has a huge opportunity to lead a discussion about workplace safety. [Employees] are yearning to be informed about how the world is changing and how threats get processed at work…You want to have a subject matter expert who works with law enforcement and can speak the language of all employees.” One thing that employers often overlook when considering active shooter training programs is a company that curtails the training to their individual brick and mortar location. As part of what they call “red ball drills,” Experior Group will evaluate the property to identify the specific issues that might present during an active shooter event. “The problems of a commercial building are not the problems of a hospital or a school,” Mutchnick says. “Run, hide, fight is s giant blanket they throw over the problem as a response, but it doesn’t deal with any site-specific issues.” All training dispensed by Experior Group is tailor-made for the culture and physical context of any business. When these issues have been identified, the instructor can direct employees the best manner of exit, should they have that option. active shooter The last thing to consider when choosing an active shooter training program is the credibility behind the operations. Some of the most prolific risk management and security companies are headed by former members of law enforcement or the military. This experience with weapons and chaos not only validates the content for many employers, but also leaves employees empowered with credible knowledge. However, former navy seals and swat team leaders are not the only option when it comes to the instructor. Lauren Perry, the vice president of operations for Trident Shield, often addresses training groups. Her specific style and feminine touch opens the dialogue in any room, allowing individuals who might not respond to an aggressive, alpha males to remain engaged in the training, retaining the information that might one day save their lives. Many employers often grapple with the cost of active shooter training for their employees. With many training programs averaging in the realm of thousands of dollars, employers often question whether or not active shooter training is even necessary. The Occupational Safety and Health Act of 1970 says, “Employers have the responsibility to provide a safe and healthful workplace that is free from serious recognized hazards.” The rise of active shooter events in the United States is most certainly recognized, with every event further inflaming the political world and conversations surrounding gun control. Given the statistics we’ve seen here, it appears as though it’s not a matter of if an active shooter even will occur, but when. Carie McMichael is the Communication and Media Specialist for Lauth Investigations International. She regularly writes on private investigation and missing persons topics. For more information, please visit our website. 

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Investigating Employee Misconduct

Investigating Employee Misconduct

employee misconduct

Employee misconduct in the workplace can have a toxic effect on morale and productivity, which often incentivizes employers to resolve the situation quickly. These days, there are clear benefits to getting out in front of any misconduct complaint as movements like #MeToo have employers scrambling to vet their workforce so they can identify predators before scandal or evidence of misconduct can become public. In a surveillance culture where both bad behavior and good behavior are fodder for a good viral news story, employers everywhere are starting to understand the value in properly handling a corporate crisis. But in their haste to resolve the situation, are employers handling internal investigations properly?

Regardless of the type of business and type of misconduct, (sexual harassment, drug-trafficking, theft, etc.) the first instinct where there is a whiff of  employee misconduct is often to keep the information very close to executives. As with any investigation, the controlled release of information has an investigative advantage in identifying the true culprits of any misconduct. This is the beginning of employers remaining too close to the situation. It’s not unusual for a well-meaning employer to appoint themselves as the head of the investigation—but this presents a huge conflict of interest. As a person with a great deal to lose, the employer is, by their very nature, biased and an unbiased investigation is the foundation for anything built on an employee complaint. Without the use of an external investigator, the case loses integrity.

external investigatorsHiring an external investigator, like a licensed private investigator, will bring a flattering layer of transparency to any workplace investigation. First and foremost, a private investigator is an independent third-party. Having no personal knowledge of the employees involved—and therefore having no preconceived notions about them—means they can truly approach the case from an indisputable place of objectivity. The employer’s personal knowledge of their employees disqualifies them from such objectivity. Whatever the misconduct du jour, they might never suspect their trusted personal assistant, their senior manager, or their business partner—all individuals with extensive access to company information and property. However, a private investigator will vet this list of possible suspects in search of the truth.

When an employer is unsure of how to proceed when investigating workplace misconduct, it seems like a no-nonsense solution to let the lawyers handle it. And it can often make sense, as they will be fielding any litigation that surfaces. In-house counsel might feel it’s under their purview for the same reasons, but this is very misguided. The lines of their capacities as both in-house counsel and investigator cross one another, thus creating another conflict of interest. While there are states like New York that allow attorneys to act as private investigators without a license to do so, this is still not recommended. Witnesses within the company will likely have anxiety about speaking to the company’s lawyer, and might not be as forthcoming with pertinent details. Leads suddenly begin pancaking into dead ends as nervous employees become less cooperative. Private investigators have the advantage in this situation, as they are not representatives of the individual’s employers in any capacity, and have no power to fire them. It’s the same advantage private investigators have over law enforcement because they have no powers of arrest.

The documentation provided by a private investigator is invaluable to workplace investigations. After all, many reports not handled to the satisfaction of the complainant often lead to legal action, the most common example being the more familiar story of sexual harassment in the workplace: An employee alleges sexual misconduct against another employee. Both parties are interviewed. The interviewer does not tape the interview nor take notes. After a shoddy investigation, the complainant decides to sue the company for negligence. Another common example is the case of an employee who is hastily terminated for FMLA abuse or malingering before the company conducts a thorough investigation.

Not only are paper and ink expensive, but filling out and preparing reports is time-consuming—time that would be better spent trying to improve your business. Private investigators keep meticulous records, just like law enforcement, of all witness statements, evidence, surveillance, and relevant information to the case. This will go a long way towards addressing the complaint after the PI has issued their solution. It’s a perfect package: The investigation is chronicled from beginning to end, all of the relevant information is accessible, and best of all, it was conducted, prepared, and presented by a completely objective, independent third-party. The same third-party can also offer testimony in any court case that might result from the investigation.

Whether you’re investigating sexual harassment allegations, drug-trafficking, theft, or any complaint of employee misconduct, make the proactive choice of hiring a private investigator. It’s the strongest first step you can take in any internal workplace investigation. From the beginning, the investigator will be an impartial, unbiased eye whose only loyalty is to the truth. This kind of due-diligence will go a long way towards demonstrating you, as an employer, have heard the complaint, taken it seriously, and are only interested in what actually occurred. The solution will not be based on pre-conceived notions of colleagues, or biased assumptions, but independent deduction and well-documented evidence. And even if the investigation comes to a less than amiable termination, the foundation laid by the private investigator will protect your business from litigation.