Dealing With Employee Fraud: 4 Key Questions to Ask Yourself

There may be a million concerns you have as a business owner, such as workers getting hurt on the job, but the toughest thing to come to terms with, from the perspective of any leader, is when an employee you have entrusted to deal with the inner workings of your business is committing fraud. Employee fraud is one of those things that can be more commonplace than we realize. If your organization has been infiltrated by a fraudulent employee, there are a few things that you may need to ask yourself. 

What Level of Responsibility Do They Have?

An employee caught in the act has violated trust, but the toughest thing to consider is when an employee is committing fraud that is directly impacting your reputation, especially if you have been trusting them with such critical components that involve them liaising with the government. 

When it comes to applying for business loans or working with higher powers, there’s a lot you need to consider, especially if you, as a business, are committing offenses under the false claims act. What you must recognize is that this employee is committing fraud, but it has wider implications for your business. 

How Do You Deal With the Employee Correctly?

You need to act quickly. If you discover an employee that’s been engaging in any fraudulent activity it’s important to stop it from going any further. You need to do the following:

• Remove employee access, for example, by blocking their IP address. 
• Removing any devices, especially those that contain valuable information. 

Before you do these, you must also make sure you have evidence that shows they are committing fraud. It’s critical to build up a case, especially if you are only hearing about it from another employee. You’ve got to take action, but you need to make sure that you are not jumping the gun, especially if you are making allegations that are currently unfounded. 

One of the best things you can do is hire a private investigator that can help you to build a case against the employee. When you conduct an investigation, you may wish to appoint someone from HR, but it’s worth opting for a separate individual. A specialist that conducts investigations can gather a case with the appropriate evidence, for example, using surveillance tactics. 

It’s also important for you to recognize if the accused individual is showing some of the following signs:

• Being stressed on the job, especially when questions come from someone conducting an audit. 
• Living beyond their means, for example, someone on a modest salary is suddenly wearing flashier clothes or driving an expensive vehicle. 
• Working longer hours. Those employees that come in early and stay late and do not take sick leave may seem like the perfect employee, but these are major flags for employee fraud. 

When you are gathering information, you’ve got to make sure that you don’t just have proof, but you need corroborating resources, such as witnesses, the details of the employee, and ensuring that you deal with the situation professionally. 

How Do You Broach the Subject?

When you accuse someone of committing fraud, you’ve got to approach it with care and caution. To do this effectively, you must have a witness present during the interview behind closed doors, and you may wish to seek the support of an attorney before you go through the discussion. 

When you highlight all the evidence, it’s important to be professional and maintain a level head. You may be attacked verbally and you may be blamed, which can be hurtful, but it’s critical that you maintain your professionalism, especially if you are intending to let them go. 

You may wish to report them to the authorities, however, you may come to a deal that spares them any additional reprimanding on a specific condition, for example, returning equipment they stole. 

How Do You Ensure This Doesn’t Happen Again?

Being attacked from the inside may drive you to wonder why this occurred in the first place. As the employer, you may feel that they had to save enough finances because they were not earning enough, or they felt the company did them wrong, so they were conducting an act of revenge. There could also be calculated or emotive responses. 

It is critical that when you deal with a fraudulent employee you must look at the reasons on a cultural level. It is not an easy thing to deal with, but a fraudulent employee is not necessarily the black sheep of the business.