I was at recent Academy of Chief Executives AGM. I have been a regular speaker with the Academy since April 2011. It was a great chance to meet with other speakers and I had a very interesting chat with a lawyer whom I can’t name who specialises in prosecuting fraud cases. We were chatting about people who embezzle … and right now there is a LOT of it going about.
The common scenario is someone in a financial position with access to bank accounts, cheque books, CCs, teller machines or cash. They almost always are long term and trusted employees. They almost always operate in an environment where scrutiny has been relaxed because they ARE they ones doing the scrutinising.
The figures bandied about ranged from £138000 to £500000 … the most common figure seemed to be £250k-ish … and in some cases £700k and one case £8M!
The common causes are
1. The person doesn’t feel they are paid enough for what they do.
2. They have a gambling addiction.
3. They have a drug addiction.
4. A spouse has lost a job and they are ‘supplementing’ their income.
5. They have commitments that encourage embezzling i.e., loans, tithes, debts, CC debts etc.
6. They have investments i.e., properties that aren’t paying and costs associated with those investments.
They ALL lie. Almost all cannot see that their behaviour is wrong.
The second area of concern is anyone with access to products or stock – spoilage. Staff account for up to 80% of spoilage, and have so for as long as I’ve known it. But a LOT of people are being caught on Ebay selling items below cost. His undergrads do Ebay searches on behalf of clients and this is a common way of finding the perpetrators. His advice was: tighten up.
Most embezzlers walk free because it is costly to pursue them legally.
Secondly, a LOT of people will not prosecute because they do NOT want it to become common knowledge to customers, staff or competitors.
One piece of advice was: call the police and have the person arrested and charged. The other was: check anyone who has access to money or stock.
I am not saying your people are dishonest but you need to tighten up the opportunities for them to be unable to resist the temptation. When I coach a client in this scenario they are always shocked. And I mean shocked. They feel betrayed and stunned and gutted. And then embarrassed because they had a sense it was happening and did nothing about it. Act sooner.
There is a saying: If it looks like a duck and walks like a duck it probably is a duck. Hope that helps.
(c) Andrew Priestley. www.andrewpriestley.com