What To Do When You Suspect an Employee Has Been Embezzling
No business owner wants to think their employee has been stealing or embezzling, but unfortunately, this does happen. If you suspect that one of your employees may be taking money or goods from your company, learn some important tips on what to do when you suspect an employee has been embezzling. These measures can help you protect your business and your honest employees.
Call a Lawyer
Before taking any action, you should get legal advice. Consult with an experienced attorney to determine what is legally permissible under the circumstances and get guidance on how best to proceed.
Contact a Forensic Accountant
Under your lawyer’s supervision, involve an outside forensic accountant who can help confidentially gather and analyze your company’s books. They will assess any discrepancies that might point to theft or embezzlement.
Contact Your Insurance Company
Again, subject to your attorney’s advice, notify your insurance company of your suspicions and the existence of an investigation as soon as possible. Depending on your policy, you may have coverage for losses due to employee theft. The insurance company may want to conduct its own independent investigation. Talk to your lawyer about how this would impact your company before you call your insurer.
Compile Evidence
Create a timeline of suspicious activity, document all findings from your investigation, and gather any evidence that is relevant to the case. Your company owns your books, but be sure not to breach any employee privacy laws while you’re gathering evidence.
Confront the Employee
It’s critically important to handle a confrontation correctly. It must be done in private and in such a way as the employee is free to leave the room without feeling they are being obstructed. This prevents any credible accusations of false imprisonment. Your lawyer, accountant, and an employee witness, if there is one, should be present.
Many employees who steal do it because of an untenable personal financial situation. They are likely to be highly emotional in a confrontation. Stick to the facts and make sure the employee is aware of how much evidence you have compiled.
Beware that a careless accusation of theft can result in a lawsuit for slander and irreparably damage a person’s reputation. And a threat to contact police coupled with a demand for financial restitution can be construed as the crime of extortion.
Your attorney should guide the confrontation with the goal of securing a written confession and an agreement to repay the stolen money. In serious cases and with a lawyer’s advice, contacting the police may be a necessary option.
One of the best ways to handle employee theft is to deter it with firm policies and clear consequences that are consistently enforced. And the next time you’re hiring a Chief Financial Officer, be sure to assess how they’d spot embezzlement or “cooked books.”
Contact legal counsel for guidance if you suspect that an employee has embezzled money or goods from your company. Taking swift action can help minimize losses and put you in a better position to get justice. It is important to speak with a qualified lawyer about your specific situation to ensure all facts are taken into consideration.
