When you suspect employee fraud at your company, you may need to take action to find out the truth. Fraud can come out of nowhere and catch you and your company by surprise. That’s why you need to stay ahead of the game with investigations: they’re a subtle way to feel out any potential danger signs and possibly nip a problem in the bud before it arises.
But we’re getting ahead of ourselves. First, we need to look into just what employee fraud is and how it can appear. Here are three of the many schemes that an insider could be hatching, and how investigations can stop them:
1. Ghost payroll fraud
Sometimes, former employees or people who don’t work for a company end up on payroll by mistake. But when it isn’t a mistake, it could be part of a scam for managers and other employees to siphon the very real paychecks of non-existent workers.
This can also be similar to when employees deliberately rewrite their timesheets to earn more money than they actually should have earned, or claim travel expenses they didn’t need. In both cases, the crime comes from someone changing information for their gain and at the company expense. And they bank on getting away with it because the company isn’t looking too closely.
“Payroll fraud could help managers and other employees to siphon the very real paychecks for non-existent workers.”
It should be pretty obvious where investigations can come in. Taking initiative before a crisis gets out of hand can also mean having a solution in place as a backup to unexpected fraud. Once the problem is discovered, the professionals you work with can guide you through the next steps.
Whether it’s walking off with company property or, more seriously, company data, employees have several ways to abuse the trust of their place of work.
The digital aspect of employee fraud has become even more apparent in recent years, now that it’s clear there’s a market for personal information culled from private systems.
This means that there are greater and sneakier ways for employees to commit fraud than before, with IT security a big concern in many offices. Discrete investigators can still help, however, by looking for the telltale signs of fraudsters and criminals. Are people with special access acting suspiciously? Is there reason to believe an outside group might have a “mole” on the inside?
Don’t get paranoid: Hire a professional instead to discover company weakness before those weaknesses become the base for major disaster. Catching theft and dealing with it discretely can be a major saving grace for your business and keep it from losing money and customer trust at the same time.
As the SBA pointed out, determining potential thieves goes beyond merely picking out who acts strangest. It can also help to see if there are any conditions that could prompt a seemingly benign person to turn to fraud, such as financial pressures, and investigators can look for this as well.
3. Vendor kickbacks
You might be surprised how intricate financial schemes can blossom under a company’s nose. When a partner gets compensation in return for some sort of perk, the results could easily lead to a criminal scandal that hurts the reputations of all parties. Since these schemes involve multiple participants, they can be intricate and build over time.
When businesses hire Frizell Group, they have well-versed security specialists ready to respond. A complicated fraud scheme will take an equally sophisticated means of untangling it, so seeking out professional assistance is the best option.
There are many, many, more types of fraud. When you suspect fraud, or if you need a Business Controls Survey to help spot and prevent the potential for fraud, Frizell Group will provide the staff expertise and get to the root of the problem. Follow our blog for more information on fraud, including an upcoming post specific to vendor kickback schemes.