Connections Groups

The Business Networking & Social Organization for Central Florida

Corporate Crime & Employee Theft is Biggest Threat

Corporate Crime & Employee Theft is Biggest Threat
... Corporate crimes exceed street crime in their overall impact on society.

The news media, in their quest for ratings, keep all of us worried about home invasions, car jackings, muggings and more.

But do you know corporate crime is a much greater risk for society as a whole, and for us, as individuals, than all the street crime combined?

Let's look at the cost in dollars (from us, the taxpayers) ...

The FBI estimates that burglary and robbery costs the nation $3.8 billion a year.  Securities fraud alone costs over $15 billion a year. Health care fraud costs taxpayers $100 billion to $400 billion a year.

But you might say "street crime is more scary because people get injured or die.”

But corporate crime is responsible for injuries and deaths too.   For instance...

Environmental crime results in poisonings, disease and cancer (75% of all cancers are caused by environmental and nutritional factors).

Unsafe work conditions result in 16 deaths PER DAY in America... that is over 5800 deaths per year.   Compare that to homicides committed with guns (about 12,000 per year).

The big difference when it comes to deaths is that when a company deliberately allows safety issues to become so bad that death results (which is inevitable, and foreseeable), no one is held accountable.    Workplace deaths rarely result in prosecution and, when they are and a conviction is obtained, it is only a misdemeanor with a sentence of less than a year.   

In this country we coddle corporate crime.  In fact, under the previous administration, OSHA (the Occupational Safety & Health Administration) rarely even referred these workplace deaths to the Justice Department.  Additionally they lowered fines for non-compliance with safety guidelines so far that companies now just consider them a normal cost of doing business.   

Obviously the cost to the economy, and lives, is substantial when it comes to "white collar" or corporate crime... but lets look even closer to home, and from another angle as well.   

Are YOU a business owner, manager, or employee?   

Then this directly affects YOU.

Did you know that, statistically, 75% of employees have, or will steal?

Did you know that ONE THIRD of all business failures trace back to employee theft?

WOW... that is huge.   And think about the impact that has on your LOCAL community.  The impact in terms of lost jobs, lost business to vendors and lost revenue to creditors.  

Think about it in terms of YOUR business or the company you work at – YOUR job security.   Yes, every business can be the victim of employee "theft."

Employee theft can be broken down into 4 categories...

Theft or embezzlement, often committed by management or executives.

Theft of assets or merchandise.

Fraudulent disbursements (for instance, extending discounts to non-qualified individuals) or purchase order fraud.

Theft of time.

There are some simple steps that can greatly reduce internal theft.  

A forensic accounting review, compared to employee time cards, can be a way to trace the theft to the right individual.

Workplace security systems can be both a way to discourage theft and, after the fact, to help detect the guilty party.

Consistent security procedures also provide great benefits.   For instance, purse and bag checks in retail environments.  A security camera by a time clock, and 3rd parties involved in ringing up of sales involving returns or discounts, should be standard procedure.

In the management area, involving 3rd parties in vendor approval processes, invoicing and purchase order approvals, etc., can lower temptation.   

Random “mini-audits” and or “mini-inventories” should be standard procedure as well.

No procedures are fool-proof, however, and it is just a matter of time before your company will fall victim to a “bad apple.”   Whether a small, or large, theft... The impact can still be HUGE because internal theft hurts your business in ways that don't necessarily show up on a security camera or in hard numbers on a balance sheet.   

Internal theft's biggest damage is to the MORALE of your team.     

This is why, when you have a situation occurring, it is imperative for the good-will of your HONEST employees, that you take action immediately.   

Here is why.   Put yourself in the shoes of your honest, hardworking, employees, managers, vendors, and team members.

You put in a lot of hours at your job and you genuinely CARE about the company you work with, and it's welfare.   You might not make a lot of money, but you make a fair wage and are happy with your work environment and you love your job.

But your co-worker "Joe" is a cheat.  Perhaps he steals time, goofing off when he should be working.  Perhaps he is stealing merchandise, or money.   Maybe he just gives his friends "discounts" they don't deserve when they come in shopping.  

You may not even know who "Joe" is.  In other words, which employee is doing it... but you know it's being done.

As a loyal employee who does a great job and works hard for your paycheck ... don't you RESENT "Joe" (or whomever it is), that is getting MORE than you when they clearly don't deserve it?

Of course you do.  And every honest employee is entitled to feel that way.   After all, it's just not FAIR that some employees are "getting away" with something for nothing.

So, as that honest, hardworking employee, what do you WANT to see the company do?   

You want them to get rid of "Joe."  

You also want to know that they APPRECIATE YOU.

Study after study has shown that the biggest motivator of a staff member is NOT money... it is being APPRECIATED.   As long as employees make enough money to live off of, they rate "job satisfaction" as being the thing they want MOST. 

How can they FEEL appreciated, and respected, if the company turns a blind eye to "Joe" - their dishonest, loser co-worker?

They can't.  And, because they can't, their work, productivity, and job satisfaction is going to suffer.   THIS is how a bad situation can go from bad, to disastrous very quickly.

You have TWO jobs that you need to do here.

1) You need to find out who "Joe" is - so you can get rid of him, and perhaps, even prosecute.

2) You need to do it in a way that doesn't hurt the honest employees and ends up motivating them in a positive way.

This means your investigation has to walk a very "fine line."    There is no way to conduct an investigation without being somewhat invasive with all the employees (good and bad), as you narrow your search.  

You also need to realize that even your honest employees are going to be feeling apprehensive as this investigation is conducted.  After all, they don't want to think that they might be suspected of wrong doing and, if they think they are, they are not going to be happy campers - at ALL.

This is why many companies will hire a professional, outside company, to come in and do a forensic audit, or a security investigation.    After all, the employees of this outside company don't have a relationship with your employees they have to worry about preserving.  They can be the "bad guys" leaving you wearing the white hat.

TIPS for handling a security situation...

1) Have a GROUP employee meeting letting everyone know of the situation.   Be honest and upfront with them... you are a TEAM and your employees can be your best resource for rooting out the thief.   Let them know that you APPRECIATE all the hard work and the honesty, that you get from most of them, and that you don't feel it is fair to THEM for you to tolerate a situation where one of them is getting away with "benefits" they don't deserve and didn't earn.  Talk to them about the "big picture" of internal theft and how it impacts the company, and THEIR job security.  Tell them you will be calling in an outside company to do an investigation, that you apologize to all of them if this, in any way, makes them feel uncomfortable and ASK for their help in getting this resolved quickly.   Suggest that whomever is the "guilty" party, that this would be an excellent time for them to "find other employment" and that the deadline for doing so with "no questions asked" is the day the security company starts their investigation.  If you are lucky, perhaps the guilty party (or parties) will simply quit.

2) Even if someone quits, you will still want to conduct enough of an investigation to insure that they were the only party involved.   If you are unsure... then proceed with the investigation.   

3)  This is important...  keep up the communication with your staff as this situation is ongoing.  You want them to feel a part of the process... after all, this is for THEIR benefit as much as the "company."   Let them know that any of them that have information to share, that it will be in complete confidence.  You may even want to have a meeting with each employee individually, and in private, to alleviate their fears, and give them that opportunity to share information in a way that is not obvious.  Encourage them to phone you after hours. You will be amazed at what information you learn this way.. remember that your good employees want to help.

4) When the whole situation is resolved, and the bad apples are gone... REWARD the rest of the team.   Throw a party, bring in lunch every day for a week, give everyone an extra day off over the next few months.   Do SOMETHING to show that you very much appreciate them.     Under no circumstances should you skip this step.   You have just put everyone through some level of emotional turmoil... this is a "fresh start" for everyone and should be celebrated.

Of course... the best way to handle these situations is to prevent them from occurring in the first place.   This is where a good background check, and a thorough interview process is your best friend.   Lax hiring policies plant the seed for these situations.   Don't let the "bad seeds" in to begin with.

For more information about how you can protect your company, contact:

Peter Cerone, CEO
Access Investigative Services


Views: 677


You need to be a member of Connections Groups to add comments!

Join Connections Groups

Check it out...


Click to "Refer & EARN!"

referral commissions
"This has created a referral BRUSH FIRE for my business."
...Scott Sheaffer,
Mortgage Broker
for more info.  

Be a Sponsor!


Would you like to...
** Have YOUR banner ad here on the MAIN Page?
** Get featured in the email newsletter to ALL 10,000+ Connections members?
** Be on the "Featured Members" leaderboard OR have your EVENT featured?
>> CLICK HERE for info


Shop Nest Bedding® Now!

© 2023   Created by Sue Copening.   Powered by

Badges  |  Report an Issue  |  Terms of Service