Fraud Investigation
So, you think you're experiencing Fraud?
Feeling like you've been duped by someone you trust and/or admire is not an easy situation for anyone to go through. The sensitivity of dealing with a white collar criminal is crucial. Whether you find someone in your own Company embezzling funds, or you know of a friend or family member who is stealing you CAN do something about it! This person may not be directly impacting your well-being, but chances are, their scheming will only grow until they are caught. (The greed is ultimately what catches most white collar criminals.)
Fraud cases are sensitive. You will need proper evidence to both terminate the employee legally, and for any future legal proof. Often Fraud cases are not publicized, as these cases can have a significant impact on your businesses image. As you know, some major fraud cases have shut down businesses altogether. Had the whistle been blown sooner, perhaps these businesses could have survived. You might feel like a victim, a lot of people who report fraudulent activity do, but remember this is not your fault. If your Company has a procedure in place to deal with fraud, embezzlement, theft, misappropriation of assets, or anything else in relation to white collar crime, then you should follow your Company's guidelines. If your Company has a Fraud Hotline set up, congratulations this is the number one way to catch a fraudster! By all means, call this hotline and start the investigation. If your Company has nothing in place to combat fraud, please look at our "Do's & Dont's" to the right. |
Do's & Dont'sUnder NO Circumstance Should You:
• Tell the individual of your suspicions. • Question the suspect related to your suspicions. • Punish the individual. • Suspend the individual. • Make other employees aware of your suspicions. How to Handle the Situation: • Your Company's insurer should be contacted regarding fidelity insurance coverage. This should be done first! This may cover damages, legal fees, etc. • An attorney should be contacted for legal guidance; preferably one with experience in this situation. • A forensic accountant should be contacted with previous investigative experience, you will be surprised with the results of their investigation. • Interact with the suspect exactly as you had previous to your suspicions; act as if you know nothing concerning the perpetrator(s). • Day-to-day operations should NOT change concerning the investigation. • Get in touch with someone in upper management (be sure this person has no relation with suspected perpetrator). • Do not inform anyone of your suspicions, except for the professionals working on the case. The Confrontation: • Usually the person will breakdown, and admit to fraud. • Suspect will admit to "everything" they've done, and they will want you to believe them; however, hire a forensic accountant and they may uncover further damages. • Suspect will give reasons/justifications as to their actions, do not be swayed by their pleas. • Most often suspect is terminated, the case is never filed, and suspect moves on to repeat their offenses. Even when references are checked, past employers can not legally disclose employee fraud; leaving the new employer (new victim) unknowing and vulnerable to fraud. • Tip: Ask the candidate's previous employer if they would hire their past employee again.. if not, you may want to reconsider your candidates. Should you prosecute? • Most fraud cases go unprosecuted. • Employers have to decide between justice, and bad publicity. • Unless you prosecute, the fraudster can continue their crime spree as long as they go unnoticed, or unprosecuted. |
