Employee Theft / Employee Misconduct

Employee Theft & Misconduct Investigations in Florida

Our private investigators and certified fraud examiners conduct business investigations and asset investigations to help organizations with their critical fact-finding when they need to conduct internal investigations or to examine allegations of wrongdoing. Whether or not actual misconduct is discovered, such inquiries, and their aftermath, can pose severe risks to companies and their stakeholders, damaging their reputation, disrupting their business operations. Misconduct can also expose them to government scrutiny, and potential criminal, civil, and regulatory liability. Brener Investigations Group services have helped clients successfully resolve investigations promptly and with minimal business disruption.

In the business landscape, the issue of employee theft can manifest in various forms, ranging from petty theft to elaborate schemes. Understanding these forms is essential for organizations to effectively combat them. Companies must equip themselves with knowledge and resources to recognize the signs of potential employee misconduct early. For instance, implementing regular audits can serve as a deterrent by demonstrating that the organization actively monitors financial activities. Additionally, creating a culture of transparency and encouraging employees to report suspicious behavior can help in fostering a safer workplace environment. The financial implications of employee theft are significant; organizations can lose thousands, if not millions, of dollars due to theft. This can affect overall profitability and sometimes lead to downsizing or closures. Thus, the stakes are high, and organizations must be proactive in addressing these issues.

Private Investigators with Brener Investigations Group have years of experience conducting employee theft investigations.  From real-life examples to scenarios played out in conferences, we continue to improve our skills by staying current on the most recent trends involving theft, deterrence, and punishment.

Our team has encountered a myriad of situations over the years. For example, one investigation revealed an employee who was generating fake returns to pocket cash. In another instance, a trusted employee was caught manipulating expense reports to claim reimbursements for non-existent business expenses. These examples highlight the importance of vigilance and the need for comprehensive training for employees to understand company policies regarding theft and misconduct.

There are three major categories of asset misappropriation schemes: cash receipts schemes, fraudulent disbursements of cash and, schemes involving the theft of inventory and other non-cash assets.

In addition to these categories, companies should also be aware of emerging trends in employee theft. With the rise of technology, new methods of theft have surfaced, including digital theft, where employees steal sensitive information or funds through hacking or unauthorized access to company systems. Organizations must incorporate cybersecurity measures and regular training on data protection to safeguard their assets. It is crucial for businesses to implement both physical and digital security protocols to mitigate the risk of theft.

Skimming

Skimming is the removal of cash from a victim entity prior to its entry into an accounting system. Employees who skim from their companies steal sales or receivables before they are recorded in the company books.

To further illustrate the concept of skimming, consider a small retail store where the cashier is responsible for handling cash. If the cashier sells a product for $10 but does not ring up the sale, they pocket the cash instead. Over time, even small amounts can accumulate to a significant loss. This practice can become habitual, leading to larger schemes involving multiple transactions. Businesses should conduct regular training sessions to educate employees on ethical behavior and the consequences of stealing, which can deter potential misconduct.

Skimming is one of the most common forms of occupational fraud. It can occur at any point where cash enters a business, so almost anyone who deals with the process of receiving cash might be in a position to skim money.

Moreover, it is crucial for management to recognize the emotional factors that can lead to employee theft. Financial hardships, personal pressures, and workplace dissatisfaction can drive otherwise trustworthy employees to commit theft. Organizations can mitigate these risks by fostering a supportive workplace culture, offering financial wellness programs, and providing avenues for employees to voice concerns. Knowing that they are valued and that their well-being is prioritized can reduce the likelihood of them resorting to theft.

Sales Skimming

The most basic skimming scheme occurs when an employee sells goods or services to a customer and collects the customer’s payment, but makes no record of the sale. The employee simply pockets the money received from the customer instead of turning it over to his employer.

In the case of register manipulation, employees may develop sophisticated methods to cover up their actions. They might remove cash from the register during busy hours when customer traffic is high, thinking that no one will notice. This can lead to significant losses over time. To counteract this, businesses should implement checks and balances such as requiring dual control over cash handling, where two employees are required to be present during cash count and register reconciliation. This not only helps in preventing theft but also fosters accountability amongst staff.

Register Manipulation

Some employees might ring a “no sale” or other non cash transaction to mask the theft of sales. The false transaction is entered on the register so it appears a sale was made. The perpetrator opens the register drawer and pretends to place the cash he has just received in the drawer, but in reality, he pockets it. To the casual observer, it looks as though the sale was properly recorded.

False Discounts

Those employees with the authority to grant discounts might use this authority to skim sales and receivables. In a false discount skimming scheme, an employee accepts full payment for an item, but records the transaction as if the customer was given a discount.

False discounts can be particularly damaging as they can erode customer trust if discovered. For example, if a loyal customer realizes they were charged full price instead of receiving a promised discount, their loyalty may wane. Organizations must ensure that all employees understand the importance of maintaining integrity in transactions and the long-term impact of such fraudulent activities on customer relationships.

Lapping

Lapping customer payments is one of the most common methods of concealing receivables skimming. Lapping is the crediting of one account through the abstraction of money from another account. It is the fraudster’s version of “robbing Peter to pay Paul.”

To illustrate the lapping scheme, imagine an employee handling customer payments at a retail store. If a customer pays off their balance, the employee might take that payment and apply it to another customer’s account, effectively using the funds from the latter to cover the former. This cycle can continue until the employee is caught or the accounts become too muddled to untangle. Organizations should conduct routine audits on receivables to catch discrepancies early and prevent substantial losses.

How Can A Florida Private Investigator Help With Investigating Employee Theft?

Brener Investigations Group will help your organization detect and prevent employee theft and misconduct.  Our private investigators and certified fraud examiners use a multi-step approach to gather evidence, including background investigations, asset investigations and surveillance.  We can then advise on control implementations and education on preventing future schemes.

Furthermore, collaborating with external experts can provide insights into effective theft prevention strategies. Engaging with consultants who specialize in fraud prevention can help organizations design tailored programs that address specific vulnerabilities within their operations. These experts can conduct risk assessments to identify areas of improvement and suggest best practices based on industry standards. By taking these proactive measures, companies can significantly reduce the likelihood of employee theft.

Our investigations often reveal a need for better employee training to prevent theft. Workshops focusing on identifying red flags for theft and understanding the legal implications of such actions can empower employees to act responsibly. Additionally, integrating anonymous reporting systems can encourage employees to report suspicious behavior without fear of retribution. An inclusive approach that involves employees in the conversation about theft prevention can create a culture of accountability.

In conclusion, employee theft is a multifaceted issue that requires a thorough understanding of various schemes and proactive measures to prevent it. Organizations must remain vigilant, foster a supportive workplace environment, and engage in regular training and audits to safeguard their assets. By doing so, they not only protect their bottom line but also cultivate a culture of integrity and trust among employees.

Additional Resources on Employee Theft Investigations

Employee theft can have serious financial and operational consequences for any business. Understanding the proper procedures, legal obligations, and preventive measures is essential when conducting or responding to an employee theft investigation.
The following trusted resources provide expert guidance and best practices:

• How to Conduct an Employee Theft Investigation – Embroker – Learn practical steps for identifying, investigating, and preventing employee theft within your organization.

• What to Do If You Suspect Employee Theft – Insureon – A clear guide for business owners on how to handle suspected internal theft and maintain legal compliance.

• Detecting and Combating Employee Theft – Wolters Kluwer – Professional insights on theft prevention, investigation strategy, and workplace integrity.

• Six Best Practices for Workplace Investigations – Perkins Coie – Legal experts outline best practices for conducting workplace investigations ethically and effectively.

• Reporting Employee Theft or Fraud – Association of Corporate Counsel (ACC) – Guidance for reporting internal fraud and theft, including how to handle evidence and protect your business interests.