William W. Acuff, CPA∙CFF, CFE
When someone embezzles from you, not only do you lose financially, but you also suffer emotionally from the loss of trust. Don’t lose a third time; seek specialized expertise from a Certified Fraud Examiner. Investigating and resolving allegation of embezzlement is a complex matter where the rights and responsibilities of both the employer and employee must be observed.
We can help resolve allegations of fraud, determine who was involved, how the fraud occurred, how much money was lost, collect evidence to support the allegations and plot a course of action to help prevent further incidences of fraud.
If you suspect embezzlement, consider the following:
Contact a CFE (Certified Fraud Examiner). This is not the time for self-diagnosis. Remember, embezzlement is a complex matter. Contact someone who is competent in this area and has experience in appropriately dealing with such situations.
Contact Your Insurer. Failure to put the insurer on notice of a potential loss can void fidelity or employee theft coverage.
Deal with the Suspect. Many times, you will want to terminate immediately. However, depending upon the circumstances, the best course may be to begin an investigation first to discover evidence of sufficient predication before termination. In addition, under common law, employees have a duty to cooperate with employers in a legitimate investigation.
Know the rights and responsibilities of each Party. Employers have a right to conduct a fraud investigation, but the actions taken by the employer must be within Federal and state statutes and consistently applied to all employees. Employees have a duty to cooperate with employers in a legitimate investigation. Also, employees may have certain rights to privacy and rights under the Fair Credit Reporting Act, among others.
Develop a plan. There is a multitude of considerations in a fraud investigation. A plan can help ensure important steps are not overlooked. The timing and order of document examination and the interview process can be crucial.
Act quickly. Most likely the scheme has been ongoing for some time and losses are usually more than first suspected. The employer must act quickly to stop the damage.
Secure Data. The organization must take immediate action to preserve data. The issue of intent is at the heart of proving fraud and is based primarily on circumstantial evidence. Data to be secured should include anything the employee touched while at the organization, especially documents, in both paper and electronic form.
Where there is smoke, there are mirrors. Studies have shown when fraud is occurring in an organization, there is a very good chance other personnel have developed their own schemes.
Remember the Titanic. Fraud is very much like an iceberg; only a small part is visible. Unless confronted with the full facts, suspects rarely admit to the total amount involved in a fraud. In fact, often they are not aware of the amount and are themselves shocked by the total.
