When an employer is faced with employee embezzlement, you might think that they just fire the person, or call the police and the insurance company. At the minimum, they call the insurance company if they have an employee fidelity policy.
What you might not realize is that the insurance company might require proof that funds were actually stolen by the employee. Most employers call their attorneys and smart attorneys call in a firm like International Investigators, Inc. Theft in the workplace can be complicated and involve more than a single employee. Theft by employees could also implicate suppliers and clients.
A recent case followed a common scenario. The situation where an employee forged checks, cashed the checks and doctored the books and records. International Investigators called in the Certificated Forensic Examiner (CFE) to review not just the financial records, but the overall processes in place, accounts, books and event audits files and other paperwork.
His function was to prove to the insurance bonding company how she did it and she DID do it. In order to do that, the CFE started with proving through handwriting analysis that the president did not sign the checks. He did that through extensive comparison with actual exemplars of the president’s signature. The expert handwriting analysis proved the signature wasn’t his, but it did not prove that it was her who forged signatures.
To prove that, the CFE scoured the account statements, audited the business books and correlated the withdrawals and deposits. From there, the attorney was able to subpoena actual transaction paperwork including copies of deposits and canceled checks. The evidence was crystal clear as to what had transpired: employee embezzlement. And the amount was much, much more than the owner had suspected.
A report from a professional CFE and investigative firm like International Investigators can be a sound basis for criminal charges and for the insurance company.
An employee theft investigation, especially when the employee has been a long-term and trusted worker, is emotional and creates a shock wave in morale. But even more devastating is the impact it can have on the company financial picture. While the employee can be charged with a crime, the loss may not ever be recovered – even when the insurance company is provided proof, they pay only what the coverage states.
Be proactive. Obtain appropriate insurance coverage. Set up checks and balances with systems and processes. And call International Investigators right away when suspicions of theft by employees arise.
-T. Wilcox, CEO, International Investigators
-B. McGinley, Director of Operations, International Investigators