If you type the world "embezzlement" into a Yahoo or Google search, you will find countless examples of employees stealing from their employers. Here are just a few of the stories I found when writing this article:
Men Embezzle 200,000 Pounds of Metal, Warrants Charge
Former Satellite Radio Worker Admits Embezzlement (This employee admitted to embezzling over 0,000.)
Ex-Bank Employee is Sentenced to Prison (This employee attempted to embezzle close to 0,000 from customer accounts.)
These are just a few of the many embezzlement cases that appear in the news every day. According to FBI arrest statistics, 21,400 arrests were related to embezzlement in 2008. Small businesses are the most susceptible to embezzlement, and they are often hurt the worst. For instance, a 2002 report indicates that an average embezzlement scheme costs a small business 7,500 in losses, but an average scheme in a large company only results in ,000. While both of these are big numbers, a small business cannot afford this type of loss. In addition, a 2004 report states that almost half of all embezzlement cases occur in companies with less than 100 employees. These crimes are not limited to large corporations.
To make matters worse, embezzlement is being an increasing problem. According to National Fraud Center statistics, the cost of economic crime such as embezzlement has risen from billion in 1970 to 0 billion in 1990, and this number is expected to continue to rise. All businesses need to be concerned about embezzlement, especially small businesses. The best way to prevent such a crime is being educated and taking preventive measures. Let's start by looking at how commits these crimes.
Who is Embezzling?
While any employees could potentially be capable of embezzlement, research shows that there are some common characteristics among those convicted. It is important to note that these are just generalizations, and they do not mean that an employee who fits these describes is a criminal or that an employee who doesn't fit in these categories is not embezzling. The purpose of this information is to draw your attention to the facts and to make you question how your company is handling the threat of embezzlement.
" Losses caused by employees who are 60 or older are 27 times higher than those caused by employees who are 25 or younger.
" About 50% of those who commit fraud earn less than ,000 a year.
" The majority of embezzlers have worked for the victim company for at least five years.
" Two-thirds of the incidents are committed by employees who hold finance and accounting positions.
" Nearly two-thirds of all embezzlement incidents involve female perpetrators.
How Does Embezzlement Happen?
There are two main reasons employees are able to embezzle without their employers noticing: too much trust and lack of preventive measures. We all want to believe that our employees, especially those we consider close friends and relatives, are honest and trustworthy, but unfortunately, this is not always the case. As a business owner, you must always be on the lookout for suspicious activity and you must have policies in place to prevent criminal behavior. Here are a few ways to decrease your risk of embezzlement losses.
" Implement strong accounting control
" Perform internal audits
" Divide bookkeeping duties
" Carefully check backgrounds and references before hiring new employees
" Don't tolerate any form of stealing
These are just a few of the ways you can prevent embezzlement. If you think you may have a dishonest employee at your company, you need to take action. In my book Catch Your Bookkeeper.Com, I share the top ten secrets embezzlers use to steal your wealth and the simple steps you can take to protect yourself from fiscal disaster. Don't keep wondering whether you're being embezzled - find out now, and take control of your financial security.