Employee Theft Rises in Bad Economy
The stories of trusted, long-term employees charged with embezzling money from their employers just keep coming:
- There’s the case of the bookkeeper who was charged with stealing over $100,000 from a concrete company. In a plea deal, she pleaded guilty to embezzling $5,000, got a 45-day sentence and was ordered to pay $50,000 in restitution. Then she went to work for a department store and stole $17,000 worth of merchandise and gift cards. Maybe that’s how she planned to pay the restitution.
- Another bookkeeper took trips, bought expensive cars and had plastic surgery – while making about $20,000 in salary. Still another worked for a couple for 30 years, taking money all the while. His $1 million theft was only found out when the business owners wanted to sell the company and retire.
Unfortunately, these types of fraudulent activities by employees are not unusual. We just don’t hear about the thousands of incidents that go away quietly. Many stories are never reported to the press, because they are not reported to the police. Whether out of embarrassment or fear of harming their business, many companies deal with these crimes on their own.
But the publicity can be helpful to other small businesses, since they are the most likely to be victimized. With one person responsible for writing checks, making bank deposits and reconciling statements, fraud is much more likely. Splitting these duties reduces the risk, but small companies often cannot afford the extra personnel. Hiring an outside bookkeeper is one way to alleviate the problem.
Why do employees steal? They usually have three traits: opportunity, need and rationalization. It could look like this: Your cashier figures out a way to take money that you’ll never notice. He’s behind on his rent and needs cash. And besides, he works really hard and you don’t pay him enough. He gets away with it, so he does it again. And again. And before you know it, you’ve lost $20,000. You never imagined this person would do anything like this. Chances are, he never has before.
If your company is victimized by an employee, reporting the crime can protect other businesses. When employees are properly screened prior to being hired, a criminal background check will reveal any previous convictions. And when you’re ready to hire, make sure to run pre-employment background checks and credit checks—especially when you’re hiring a bookkeeper, cashier or any other position that has access to cash or bank information.
Tags: Business and Employees, Employee Benefits, Employee Credit Check
