While organizations do their best to attract and screen for honest talent, inevitably many companies will face a dishonest employee in some form.

According to The Association of Certified Fraud Examiners, 5% of company revenue is reported to be lost annually to employee fraud.  Surprisingly, this does not include fraudulent claims of harassment, retaliation and discrimination that are settled and/or go unreported.  These other claims can cost organizations far more.

Employees with nefarious intentions are often attracted to organizations with weak policies and standard background checks.  Many prospective employees know that references are checked by busy business leaders or checklist-driven processes that call upon employee-selected individuals who provide canned, positive testimonials.  While more thorough background screenings may be more costly initially, they can save the company significantly in the long term.

It is commonly held information that most long-term employees are statistically the largest offenders of fraud in the workplace.  Knowing your employees and watching for key indicators can lead to early detection of possible fraud.

Fraud is Expensive5% of U.S. Companies' revenue is lost to fraud annually.

In Many FormsTheft, Legal Action, Abuse of Power

Fraud is not only stealing checks or office supplies.  Employees with significant access can be creative in new ways to gain unauthorized value from their employer:

  • Creating false vendor accounts
  • Stealing valuable and expensive office equipment
  • Taking money from the cash register or petty cash
  • Accessing corporate executive’s and/or personal assets and accounts
  • Skimming money from the Accounting Department
  • Creating side deals in exchange for favors and/or kickbacks from prospective vendors, clients and partners
  • Charging personal items to corporate cards
  • Using company funds for addictions such as gambling

When Fraud Becomes a Legal IssueEmployee Litigation

Many states have strict laws that protect employees from harassment, discrimination and retaliation.

Career fraud offenders know that many employers are inclined to settle cases of this nature to avoid reputation loss and legal fees associated with tending to claims of employer misconduct.  This may be seen as an opportunity for an individual with malicious intentions.

Employee claims should always be taken seriously and handled with the mindset that they could lead to litigation.  It is important to act fast on all employee reports and to fully investigate and respond to any complaints related to hostile workplace conditions.  When an employee is determined to pursue litigation, RAS experts can work with your organization to investigate, document and testify in court to help reduce or mitigate damages.

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RAS did a fantastic of job of guiding CLC through the complicated decisions we had to make in order to strike just the right balance, promoting both employee safety and a welcoming work space for our staff and clients. Ryan was quick to respond to all of our questions and delivered exactly what was promised.

Leslie Starr Heimov
Executive Director, CLC

Read about an RAS client who uncovered fraud in a litigation case