What is embezzlement?
Embezzlement occurs when an employee is entrusted with company assets (funds, property, etc.) and intentionally uses (steals) the assets for their personal gain.
Who is most susceptible to embezzlement?
Organizations in which one person controls most, if not all, functions of the finances are highly susceptible to embezzlement.
How is embezzlement typically detected?
Embezzlement is commonly detected by other employees noticing that something is odd. Third party fraud reporting hotlines and fraud prevention training assist by encouraging employees to report fraud to management confidentially.
When embezzlement is detected what are the first steps?
Employers often discover embezzlement and react by firing employees; this is NOT the recommended procedure.
Recommended first steps:
collect evidence BEFORE confronting the employee
hire a Certified Fraud Examiner to review the evidence and perform additional investigative steps
contact an attorney specializing in employment matters
and allow a Certified Fraud Examiner to interview the employee based on the evidence collected.
Do all embezzlement cases go to court?
Embezzlement cases can result in criminal and/or civil court proceedings. However, when the recommended procedures are followed, cases commonly result in out of court resolutions.
How much should I expect to pay in court, attorney and professional fees in an embezzlement case?
Every case results in varying fees depending on the needs of the case. Cases in which management follow the recommended procedures and provide access to the best evidence result in greater efficiency and less fees.
Can embezzled funds be recovered, repaid or recouped?
There are different avenues of recovery depending on the specifics within each case. Common methods include claims on insurance policies and recovering assets purchased with the funds and civil court proceedings. Once again, the loss incurred should be weighed against the professional fees involved to recover.
What information is needed to pursue an embezzlement case?
All documents, or records of missing documents, supporting:
the actions of the employee;
the basis for intentional misappropriation of assets;
how the individual benefited from the misappropriation of assets are prime evidence in an embezzlement case.