Undercover Investigations: The Best Weapon against Crimes at Work

By Kent Perkins

female undercover investigations operativeIn a time of economic strain, the last things any company needs are thieves on the payroll, but statistics show a significant number of employees steal at work. Additionally, the plague of drugs in America’s work force is very real, stripping away a comfortable margin of safety while robbing employers through increased lost time, accidents and higher insurance rates.

It’s rare when thieves slip up and get caught carrying merchandise out of a warehouse, and even rarer when people get stopped in the middle of a drug transaction at work. Sometimes, it just makes good sense to take the fight to the front lines, infiltrate the workplace with a professional informant, and decipher these problems from a viewpoint “up close and personal.”

Undercover investigations (UC)  provide intimate information by actual interaction with employees, providing a basis for interviewing malfeasant employees to ultimately solve problems in the workplace, in many cases before they cause huge financial losses due to theft, serious injury, or liability.

When we propose to place one or more Operatives (Undercover Investigators) into a client’s facility, we tailor our investigation depending upon the needs of the case, the company’s budgetary requirements and your attorneys’ directives.

An Operative, working daily inside the Company alongside the other employees, is in a position to develop information regarding alcohol abuse, illegal drugs, cargo theft, dangerous weapons, sexual misconduct, or any other problems encountered during the Operative’s performance of his or her normal work duties.

We believe it’s almost always advisable to retain legal counsel prior to initiation of a UC case, to maintain the important doctrines of Attorney Client Privilege and Attorney Work Product. Our reports are then simultaneously sent to our client and their attorney. Because we’re cognizant of, and sensitive to, labor law considerations, issues of unfair labor practices and entrapment, we can assure our clients that everyone’s rights will be strictly protected throughout our UC investigations. For instance, information pertaining to Bargaining Units and Union organizing or operations will never be a part of our reporting. Rights to privacy will be honored. Only information legal to investigate and report will be provided to clients of this or any other truly competent corporate investigation firm.

These investigations require a high level of planning by your Human Recourses (HR) management or other executives in charge, in concert with the Investigation Case Manager, your lawyer and the UC. When choosing a licensed investigation firm to conduct an undercover investigation, you should insist on the highest of standards; these include the following:


Use only well-trained, experienced Operatives for such important assignments; UC’s should receive ongoing daily interaction and directives from a Case Manager. Only Operatives proven reliable on previous investigative assignments should even be considered for your case; they should have been through strict background investigations, tested and provably drug-free, and should be subjected to random drug urinalysis testing several times during the Operation if substance abuse is involved in the assignment.

The finest UC’s have undergone extensive internal training on how to complete assignments as quickly and successfully as possible. If necessary, they can competently and accurately testify to their findings. They’re aware of the many legal considerations involved in this work, and are prepared to work with the police to make unimpeachable criminal cases based upon the evidence and testimony they provide, if and when you make a decision to prosecute offenders.


Because the expeditious success of an investigation is positively affected by the complacency of your employees, it’s extremely important they aren’t prematurely alerted. Everything possible should be done to limit the number of people with knowledge of the impeding investigation. Changing locks and security procedures or early firing of potential suspects are common errors made by some clients before or shortly after commencing an investigation. The main rule is simple: keep things the way they are, as much as practical, until this Operation is concluded.

There is an exception to this rule: under exigent circumstances where the health or safety of your workplace is in immediate jeopardy, your designated executive should be notified without delay so, together, you and your investigators can implement whatever measures are necessary to neutralize the threat; if this means involvement of the police, interception and interdiction of an employee with a weapon or immediate removal of an employee dangerously under the influence of drugs, for instance, prior to the conclusion of the case, so be it. Err on the side of caution. Nothing ever outweighs safety considerations.

The one tool any UC must have is mobility; access to others is essential, for obvious reasons. An Operative should always perform his or her “cover job” to your satisfaction; for instance, he or she could be a contracted temporary warehouse worker, able to drive and operate a forklift or other cargo-moving device; the Operative should be a certified and trained operator of such equipment.


If you initiate an undercover investigation, be sure there is daily supervision of the Operative; this assures continuity and quality, and allows you and your investigation contractor to react quickly to changing situations and needs. The Undercover Investigator and the Case Manager should always have instant phone access to one another, as well as the designated internal executive monitoring your case. As mentioned earlier, urgent matters requiring your immediate intervention can and should be brought to your attention any time, day or night.

Properly supervised Operative’s speak with their Case Managers daily, without exception. Shortly after an Operative’s shift is completed, their report should be submitted electronically to a Case Manager. This allows completed reports to be added to case file daily. The Managers should then read each previous day’s reports as they direct and supervise the UC during daily teleconferences, and are then in a position to brief you or your attorney with the most current facts.


Operatives should report a minimum of five paragraphs daily to their Case Managers.

They should be under no pressure to develop any particular type of information; their compensation is never predicated upon the type or volume of information they develop. Upon third party review, their credibility is very strong because they’re motivated only to uncover the facts, absolutely free of demands to develop either culpable or exculpatory information regarding any individual, shift, class or group. Management and hourly employees are investigated alike, and successful UC investigations often find members of both classes involved in wrongdoing.

It should be standard good practice for UC’s to review their reports daily with Case Managers, and to personally approve the final drafts for absolute accuracy before these reports reach you or your legal counsel.

A competent investigation firm has an ethical responsibility to give you the most accurate picture of your workplace, free from hyperbole or conjecture.


As the client, you should hear from the investigation firm’s Case Manager with verbal reports by telephone every week during your case, if not more often.

You should normally expect to receive written UC case reports about twice per month, generally E-mailed to your home or personal account; they would be transmitted to you via E-mail at your office only if security would not be compromised. Your reports should actually be copies of the original reports furnished your Attorney, under the Attorney Client Privilege, and forwarded to you by request of legal counsel.


Simply defined, entrapment is “causing one to commit an act he would not have otherwise committed without enticement.”

While entrapment is not, in itself, illegal, a highly skilled and competent corporate investigation firm would never help provide such a defense for a suspect.

To avoid even the unlikeliest claims of entrapment, an investigator should “qualify” all drug and theft transactions to assure that, if dishonest or criminal employees eventually interact with the Operative in criminal behavior, such as in selling them drugs or stolen Company product, the Operative can clearly show through documented reports that the illegal acts in question had been previously committed by the suspect employees. This would successfully preclude the assertion of an entrapment defense, and would help assure your case is prosecutable.


Your UC usually provides just a fraction of the total information ultimately obtained in a successful UC case; the bulk of evidence is gathered through subsequent interviews when conducted by highly skilled, trained professional interviewers working for your investigation firm.

It’s important for the interviewers to have the benefit of a UC’s information before beginning interviews, because the synergy of both types of information gathering is unparalleled.
Great dignity and respect should always be shown your employees so that nothing would ever be done which could be truthfully characterized as threatening, intimidating or coercive.

When the interviews are completed, you should be provided with a comprehensive summary indicating what was learned during the investigation from at least three sources:

  1. What the UC discovered about each person,
  2. What that person admitted to, and
  3. What that person’s co-workers testified to regarding that person during their own interviews.

Of the three above categories, the most compelling and least challengeable information is that which your employees have provided regarding their own admissions of wrongdoing. This compelling information should be captured in the form of a written statement taken as a declaration under penalty of perjury. Once that’s completed, you should expect your investigation firm to follow up with a tape-recorded meeting, in which all parties are aware of the recording taking place. In this follow up recorded meeting, joined by a management representative, the employee should read the written statement and then testify to the fair and dignified way in which the investigative meeting was conducted. It should conclude with your employee taking the verbal statement, also, as a declaration of fact under the penalty of perjury.


When all the ingredients come together in the hands of competent professionals, the results are often astounding. Over three decades of this writer’s investigative career, thousands of cases have been opened and solved through UC and interview processes. Millions of dollars worth of stolen product have been recovered; theft rings have been broken up, their leaders fired and criminally prosecuted. Illegal drug trafficking was interrupted before dangerous drugs brought the “grim reaper” to work, and those who “came clean” and sought help were often successfully rehabilitated. Managers engaged in sexual harassment, dispatchers demanding kick-backs, employees carrying guns to work, and security guards sleeping on the job have all been shown the error of their ways.

This article was written to equip you, the employer, with a higher standard by which to measure any private investigation firm offering to provide the services of an Undercover Investigator. Insist on the most qualified, highly skilled, well trained and supervised UC working through a licensed, legal investigation agency for such a challenging assignment. Cautiously narrow your search when reviewing potential investigative contractors, and trust only firms specializing in workplace investigations, because your workplace, your employees, your firm’s theft or drug problems are no criteria for “on the job training.”

About the Author:
Kent Perkins is managing partner and senior executive investigator with the firm of Diversified Risk Management, Inc. (DRM), a licensed, nationwide investigation firm. He has over 30 years of experience in conducting workplace investigations throughout North America. The firm offers a broad range of specialized risk management and corporate investigation services that are designed to minimize exposure. Mr. Perkins assists corporations and law firms in identifying, mitigating, and responding to risks through a comprehensive suite of professional service offerings. Mr. Perkins can be reached at 800.810.9508 or by e-mail.


Posted in Corporate Investigations, Investigations, Security, Workplace.

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