Bill Smith, Regional Manager of XY & Z Meats arrived at work on a recent Monday
morning, logged onto his computer and read an E-mail from his Operations Manager
with dispiriting news.
The numbers at the bottom of the bi-monthly cycle count have been confirmed;
select meats and seafood items have disappeared, by the pallet load, ".
. . for no explicable reason." The E-mail concludes, "Due to these
chronic
shortages, vendors are considering other food distributors, because the
premium items we had on hand are being scratched off the invoices and substituted
with inferior brands. The best product off our shelves is apparently being stolen."
The Controller discovered the total loss was between $53,000 and $68,000 dollars in the last month, alone, and came straight to the point, "Bill, this is a staggering loss. So, now what?"
Is Bill's situation familiar to you?
It dawned on him that he had no idea whom he could trust within the ranks of
his own associates.
He began to mull over some of the choices he and the Company President had
made in the past.
Several of their colleagues, including the Operations Manager, had, on many
occasions, provided "red flags." They reported mysterious "repeat
orders" of the same expensive brands and types of food merchandise over
the last several months, when receivers claimed they did not find these products
on the pallet delivered to them - - - a loss to the company of thousands of
dollars each month. Someone mentioned that the Night Supervisor was living well
above his means, supporting lots of children and a girlfriend, driving a new,
expensive truck, and bragging about trips to Las Vegas to gamble. Another employee
came forward and said he was forced to fill orders without proper paperwork
while working the night shift; they'd given his Supervisor the benefit of the
doubt.
Now, with the losses mounting every month and an inventory showing huge holes, he knew he had to do something.
Bringing in an outside Private
Investigation Company, Bill thought, might shake up people, unnecessarily. What if the numbers are wrong, that it's just a paperwork mistake? Will my people feel falsely implicated if they find out we put a PI on the case? How much will all this cost? These questions bothered Bill, but he figured doing nothing would be a lot more expensive than hiring experts.
Bill called a friend, a professional manager in a similar company, and was
promptly referred to us, because we'd helped his friends solve a theft problem
several years earlier.
The background
investigations turned up interesting facts; the night warehouse supervisor
was a convicted criminal with charges currently pending for an assault case.
The same supervisor had civil cases which revealed he was paying child support
for seven children to three mothers, and that he was buying a new car for a
young lady who worked in the Company's accounting department. This was financially
impossible, given his $14.50 per hour wage. Other employees had criminal convictions
for theft,
violent
acts and drug
trafficking.
The outside
surveillance people watched a late model Chevrolet arrive at the docks in
the middle of the night and noticed it was loaded with heavy cargo. Our research
showed it was rented by a former employee who was fired for theft more than
a year earlier. We followed the car to a house in a nearby city and videotaped
as the driver delivered boxes of suspected stolen
merchandise to yet another former employee.
Our Undercover
Operative was intimidated and threatened
by the Night Supervisor when the Operative questioned whether he should fill
"pull orders" hand-written by the Supervisor rather than printed legitimately
by the day-shift Sales Department. The UC also saw proxy-punching of time cards
and the unauthorized absence of people, including the Night Supervisor, while
still on Company time. The UC provided daily reports which quickly gave us criteria
to interview
several employees for serious violations of Company policy.
Five weeks after we first met with Bill, our Interview
Team arrived and began interviewing employees; some were witness interviews
to gain additional knowledge and some were confrontational interviews to solicit
confessions from those involved in wrongdoing. All the interviews were successful.
Today, a few weeks after the interviews
were completed, several people are facing criminal charges for grand theft,
including the ex-employees and the Night Supervisor. The Police handcuffed and
arrested several on the spot after the interviews. Those others who were implicated
were eventually subject to search warrants and questioned by Detectives. This
led to additional arrests.
Bill has recently been flooded by positive input from the honest employees,
glad he finally did something about the oppressive Night Supervisor others who
had helped themselves to the Company merchandise for more than a year.
Inventory records and sales indicate the theft is stopped and clients are satisfied
with product deliveries.
Instead of continuing to nurse his wounds and add up the losses month by month,
Bill is now operating a profitable business.
Of course, the names were all changed to maintain confidentiality of our clients,
but the above story is based on the actual case of a Los Angeles area food supplier
who is now very glad he called.
About the Author:
Romolo Cotta is a corporate investigator with the firm of Diversified
Risk Management Inc., Los Angeles, a full-service investigation firm specializing
in labor and employment related investigations.
Diversified Risk Management,
Inc. provides a broad range of specialized risk management and investigation
services which control losses and minimize exposure of litigation and liability
to employers. The nationwide firm assists corporations, non-profit organizations
and law firms in recognizing and responding to risks through a comprehensive
and integrated suite of professional services. You can learn more about the
firm by visiting www.DiversifiedRiskManagement.com,
calling 800.810.9508, or
. (CA. PI licenses PI-17240 and PI-23294)
