Author: M.S. Welton

I have heard “it will never happen to us, we trust our employees” too many times to count.  Fraud happens and employees commit it!

In every organisation at any time there is somebody not doing the right thing. It’s human nature and when an opportunity presents itself it will be taken.

What can you do to reduce the likelihood of fraud?

The first step to preventing fraud is to foster a positive, transparent and inclusive work-space.  Make employees feel they are part of a team, want to come into work and feel they are able to discuss problems and pressures openly and without recrimination.

Standardize what you do, make sure it is written down and the steps are available to all of your employees.  Make sure your policies and procedures are relevant, succinct and in simple language, checklists are one of the most effective ways of achieving this.  Employees will understand what is expected of them at the same time making it easier to spot when things aren’t being “done by the book”.

As a business owner or manager it is your responsibility to protect your employees from risk.  This includes the risk they will commit fraud.  Make sure no single employee has unrestricted access and there is sufficient segregation of duties. The onus on you is to put the necessary controls in place! Employees need to know where their duties begin and where they end!

What can you do if you suspect fraud is being committed?

Act quickly, tread lightly.

The faster you act the better your chance of preserving evidence and preventing the stolen assets from disappearing.

The first minutes and hours after detection are the most critical and can very easily damage the eventual outcome.

Follow a plan

If you have a fraud plan, implement it immediately.  If not contact a Certified Fraud Examiner (CFE) or solicitor to ensure you follow the rules of evidence gathering.

Know your rights

You must have a contractual right to search or monitor employee belongings and communications. This should be enshrined in the terms and conditions of employment and documented in an employee handbook. Assuming this contractual right exists, diaries, desks, computers and business email accounts may be a rich source of evidence.

Be discreet

Ensure that as few individuals as possible know about the investigation to avoid tipping off the suspect (or others involved) and  to avoid false rumors circulating. Remember – if allegations prove to be unfounded, it may be impossible for the suspect to  return to work and this could result in a claim.

Secure and record evidence

Keep a well documented trail of evidence and ensure it is correctly secured. The chain of evidence is crucial.

Consult with forensic experts

Digital evidence is key to many investigations. It is vital to preserve and analyse data carefully. Don’t ask your IT team to  conduct a search – they are not generally sufficiently trained, either technically or with respect to the rules of evidence gathering.  Consult specialist lawyers and IT investigators.

Interview staff

Consider interviewing who may be able to provide oral evidence or assist you with your  investigation BE DISCREET.

Investigate other sources of evidence

Innocent third parties may have become caught up in the activities of a fraudster and may be able to assist you. Give careful consideration to how you frame any such request BE DISCREET

Take legal action

Consider (with your solicitor) seeking assistance from the court to conduct your investigation. It may be possible to get orders to  help with evidence gathering and also identifying the whereabouts of stolen assets.


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