Although anecdotal, we have noticed a distinct increase in employers reporting incidences of employee embezzlement and other forms of theft. Financially strapped employees may succumb to temptations to divert company assets to their own use. Employers should make certain that they have financial checks in place to deter, or at least to detect theft or misdirection of funds.
These checks can include multiple approvals for expenditures or other mechanisms to avoid allowing one employee to direct company payments. Periodic audits of accounts payable and accounts receivable are also crucial to good financial controls. We have seen several recent instances where audits caught false vendors set up by employees and payments made that ultimately reached the employees.
Of course, employers are also subject to theft attempts from persons outside of the company. These attempts often involve use of bank account or corporate credit card numbers to divert funds. In one recent case, a thief faked instructions from a vendor to divert payments to a new wire account. Again, accounting confirmation and other procedures along with auditing are crucial to avoid falling victim to such schemes.
In the event of suspected employee theft, legal counsel can provide assistance with options for seeking restitution. These options include some combination of criminal prosecution and civil suit intended to identify and seize recoverable assets. Hopefully, an employer’s clear message to employees that it actively monitors financial transactions, and that it will react swiftly and strongly to instances of financial misconduct will avoid creating temptations to financially stressed employees.