Employee Theft Investigations
No company, large or small, is immune from workplace theft.
According to the US Chamber of Commerce, employee theft is costing American business $40 billion annually and is increasing by 15% per year. At one point or another every employer will experience theft in the workplace.
Very few will actually investigate, because investigating theft is complex. Faced with challenging economical times, however, businesses are less able to sustain losses and maintain business as usual, making workplace investigations increasingly more important.
Today's trends indicate a shift toward more sophisticated crimes including worker fraud and embezzlement and other crimes that often require computer network and IT investigations and investigative interviews. Employers must be more vigilant and do everything possible to prevent, deter and investigate workplace theft. In order to know what action to take, or to find out whether action is even necessary, the employer has to investigate the incident and ascertain the facts.
At Diversified Risk Management, Inc. we have investigated issues relating to theft for employers throughout North America in many different industries, involving both union and non-union environments. By better controlling the quality of people hired, and investigating the environment in which they are placed, we can help you defeat employee malfeasance before it starts.
There are many benefits to using an unbiased third party to conduct the undercover workplace theft investigation and employee interviews that can stop the theft of company assets. A well-planned and executed workplace investigation by a private investigator can be a very effective way to identify those involved with theft and prevent its recurrence.
An effective workplace investigation allows the employer and counsel a solid basis for taking corrective action and defending against claims of inaction and unfair treatment. Done accurately, investigations will either keep you out of court, or enable you to seek prosecution toward the person(s) found to be involved in the crime.
Workplace Theft Fidelity Insurance
Fidelity insurance can help your business reduce the risk of workplace theft. Organizations that retain the undercover investigation services of Diversified Risk Management, Inc. to conduct workplace investigations on their behalf typically carry fidelity insurance or are self-insured.
Fidelity insurance covers losses sustained as a result of theft or abnormal shrinkage. Some insurance contracts contain clauses that require the company to notify the insurance company of the losses (theft) at the point of discovery. Failure to comply with some of these types of clauses may negatively affect the contract. If one of the investigative objectives is to obtain proof of insurable loss, the terms of the policy and conditions of the coverage must be satisfied.
Diversified Risk Management, Inc. recommends that a review of the limitations of the fidelity insurance policy be performed to ensure the structure of the investigative process produces the desired results at the completion of the workplace theft investigation. A significant recovery through fidelity insurance, under most circumstances, may cover a portion of or all expenses connected with the investigation.
The following information indicates patterns to look for when seeking to identify workplace theft suspects.
Suspect Identification Signs
- Excess cash
- New clothing or jewelry
- New vehicle
- Eating out
- Negative attitude toward management due to their earnings
- Unusual relationships with truck/delivery drivers or outside vendors
- Security guards and management level employees should also be considered potential suspects
- Report if packages and lunch boxes are inspected by security upon entering/exiting the facility
The following information highlights areas to investigate when seeking information concerning theft. Workplace theft and unexplained inventory shrinkage occurs in several different ways and locations.
- Identify if vehicles are parked near doors or docks that lead outside.
- Shipping and Receiving or other locations where finished product is stored.
- Trash and collection sites where trash is picked-up.
- Maintain close observation of entrances, exits, skylights and perimeter fences.
- Raw material is also stolen, and sold to recycling facilities.
- Finished goods are sold in swap meets, newspapers, recycler papers and similar publications.
- Pawnshops may be responsible for purchasing stolen goods.
- The Internet is also a resource to check for items stolen from your workplace.
Law enforcement is always involved in workplace theft investigation cases if the client wishes to have the perpetrator(s) arrested and ultimately convicted to obtain restitution.