Procedures for embezzlement investigations?

embezzlement investigations

Procedures for embezzlement investigations?

Employers typically have four goals when they are initially confronted with suspected embezzlement:

  • to ascertain whether theft was actually committed;
  • figuring out what was stolen and how;
  • removing the guilty parties from the workplace;
  • taking corrective action to stop similar behavior and losses from happening in the future and
    to get back any lost money or property.
  • Direct observation is rarely used to catch embezzlers.More frequently than not,circumstantial evidence-such as a report from another employee or the results of an audit—is used to identify suspected embezzlement. When this happens, the employer needs to act quickly to look into the situation and discipline the involved employees.

    During the course of the embezzlement investigation, certain topics should remain private. Keep your suspicions and the status of the investigation strictly confidential; do not share this information with your staff. Inadequate secrecy could leave you open to future defamation claims from your suspected employee or alert other parties who might be covertly involved in the embezzlement to hide their tracks. Reiterate to the few employees who are aware of the situation that it must be kept private.

    Finding the workers (at every level of the organization) who had access to the stolen property and the chance to steal it is the next step. You should also look for any workers who may have been aware of the theft but chose not to report it.

    The employer should always consult legal counsel if the loss has the potential to be significant or if the theft appears to be complicated. In these situations, the employer should hire a forensic accountant, computer data retrieval experts, or other specialists to aid in the investigation.

    The employer must decide what action to take against the wrongdoers after the investigation is over and if it is determined that a loss occurred. The next action is typically termination. However, if the business decides to try and recover some or all of the loss from the offender, it may be wise to put the employee on leave until all potential sources of recovery have been explored. The employer may want to file a civil action to recover its losses depending on whether the loss is insured and, if so, how much the deductible is. However, depending on the assets of the embezzling party, the chances of recovery might not outweigh the costs of going to court.

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