It isn’t uncommon for the phone to start ringing at International Investigators at the beginning of calendar quarters - you know, January, April, July and October. We don’t always know who will be on the other end of the line – small business owners, financial officers, or sometimes an attorney. But we know why they are calling – it will be about missing money, theft by employees or employee embezzlement. That’s because quarterly reports are reviewed and something is found that isn’t quite right.
Sometimes there is just a suspicion and in those cases, we provide financial forensic experts to thoroughly examine the financial records and processes. No one wants to think there is an employee stealing from the company.
In other situations, there is obvious theft in the workplace, but the owner doesn’t know the identity of the thief. Money is gone and someone has to have it. In an employee theft investigation, we not only determine what is missing and how it is being taken, but we may install surveillance equipment to determine who is taking it.
In some instances, we are able to review background investigation reports from employment background checks. Sometimes red flags jump out at an experienced investigator that wouldn’t have triggered suspicion to an employer.
We may also conduct employee interviews and make observations on our own. In one case, an employee had come to work announcing her spouse had received a significant promotion and shortly thereafter the couple made several large purchases – a new car and some jewelry. Their lifestyle changed, too. They ate out all the time and took a couple of big vacations. The holidays brought about a lot of gift-buying. There was talk, but it was mostly gossip tinged with envy of their good luck.
It wasn’t until several months later that evidence of business embezzlement started to surface in the company. That’s when investigators took a look at their “good luck.” Once the promotion was exposed as a lie, everything unraveled very quickly.
Theft by employees is a huge problem for business. According to statisticbrain.com, 7% of annual revenues are lost to theft or fraud and that amounts to an estimated $50,000,000,000! They say that 33% of all business bankruptcies are caused by theft by employees.
Besides employment background checks, employers need to be watch for these employee behaviors that can signal workplace theft:
- Large new purchases; vehicles, boats, homes,
- Increase in vacations or time off
- Home decorating and purchases; hot tubs, decks, furniture
- Purchases of expensive jewelry, clothing
- Lifestyle changes: eating out, leisure activities
- Gift buying
The statistics prove that owners and financial officers have to be on the lookout for employee theft. Not only that, but they have to be diligent about checks and balances and demand compliance with strict protocol. Otherwise, they may be calling International Investigators after reviewing quarterly financial statements.
-T. Wilcox, CEO, International Investigators
-B. McGinley, Director of Operations, International Investigators