Staff Editor — Page 340

Corporate Fraud And The Relationship To Trust

September 7, 2010 by Staff Editor Leave a Comment

In my over 30 years of corporate fraud investigation I have come to a sad but simple reality. Management uses the wrong kind of trust when dealing with employees, assets, cash and the rest. I have finished the investigation, the employee has confessed and we are filing criminal charges. At that point the manager or owner says something like “I trusted that person”.

They feel guilty, are angry and question their own skills. It is not their skills that they should be questioning. In this world there are two kinds of trust: personal trust and business trust.

Personal trust is the kind you have with your best buddy. They are always there for you and you for them. You would trust them with your house, car, spouse and dog. You know that no mater what they have your best interests in mind.

Business trust is defined in three words: Trust But Verify. That’s it! You do not have the luxury of doing anything else.

Most reasons that we end up doing a corporate fraud investigation is that management uses personal trust in a business environment. This is business not personal and if your management style is to be “friends” with your employees then you should probably change careers.

You are responsible for an incredible amount of assets and liability. In most cases you’re not the owner of the company (but this applies to owners as well). As a professional you realize that you must protect those assets to keep the company profitable, which insures that, your employees have a job.

To do this you must trust but verify. I am not advocating that you are always watching over people’s shoulders. In fact a healthy work environment gives employees the ability to grow and do things in their own style.

That doesn’t mean that we just walk away and let them run wild. People like a structured environment. So what do you do? Here is an example; you receive a shipment. The person who is responsible for checking it in is almost finished. Pull part of the paperwork and audit 10% of it. When they say to you “I just did that” you reply, “ It looks like you did a great job to, it is accurate, thank you and good work”.

As a professional you cannot afford to use personal trust in a business environment unless a frequent corporate fraud investigation is your thing.

For more information: corporate fraud investigation or call 1.770.426.0547

Mandatory Employee Screening Anyone?

September 5, 2010 by Staff Editor

Have you ever wondered if every employee that you are hiring should have to pass a criminal background check? I know that it increases the cost of hiring. But if you add up the hiring costs and training expenses when trying to determine an ROI of a new employee, the cost of employment screening is marginal. However, the costs of not using a background check company could be astronomical.

Have you considered that you could be hiring someone with a very bad driving record as a delivery truck driver? The bad driving record could include speeding offenses and minor moving infractions such as rolling through a stop sign. But it could also represent a tendency for careless or reckless driving. If your new delivery driver has been convicted of driving under the influence and he gets behind the wheel of your delivery truck intoxicated, you could be held accountable for his actions. Your insurance costs could sky rocket and a possible law suit could put your business at risk. A background check company could have been your best friend.

When comparing the costs of employment screening versus disastrous actions caused by employees, wouldn’t you agree that it is in the best interest of everyone that employee background checks are mandatory for everyone during the hiring process. Depending on the type of your business you should conduct employee background checks on your employees during their whole employment.

Employment screening is not something you should ignore or dismiss as unnecessary.

For more information, visit employee background checks or call 1.770.426.0547

Filed Under: Uncategorized Tagged With: background check company, Background checks, criminal background check, employee background checks, employment screening

Not Reporting Employee Theft, Management Failure At It’s Worst

September 4, 2010 by Staff Editor Leave a Comment

In some businesses employee theft has been going on for so long that it has escalated into a serious problem that is not only right under managements nose but actually condoned.

Take a retail store as an example. In the beginning management overlooks employees taking small items such as candy, sodas… It goes on for so long that it not only becomes the norm but also actually happens right in front of management. Those same managers do nothing. So the employees learn that this is acceptable behavior. Even worse the same managers do it to!

A candy bar for $1.50 (remember when they were $0.50?) stolen by an employee is not just a loss of $1.50. If your stores profit margin is 2% then that employee just ate $75.00 (1.50 / .02). You will have to sell $75 to BREAK EVEN. Let’s say that same employee does that four times a week for a year. That’s $15,600.00 that you will have to sell to break even on a thief with a sweet tooth.

If management allow that to go on or condones it then others will do the same. “It’s OK” becomes the standard. Which means that employee theft becomes the norm. I can also tell you for a fact that it will not stop there. Some companies have a policy that if a cashier is only short $5.00 at the end of the day that they do not investigate it. That tells the cashiers that it is OK to steal $4.99 and below. To a cashier that is lunch money, gasoline (OK not very much gasoline, but still!).

The problem is that this can simply creep up on a business. It starts out little and gets bigger. That’s the culture that has been established. Most employee theft starts out small. After that the thief gets bolder and then we wonder why it has happened.

You must establish a zero theft policy. Draw a line in the sand and do not just look the other way. Employee theft will not go away on its own.

For more information: employee theft or call 1.770.426.0547

Filed Under: Uncategorized Tagged With: employee theft

Not every background check company is equal

September 3, 2010 by Staff Editor

If you hire employees or take on volunteer workers you are likely conducting background checks through a background check company. Not every background check company is equal and there are considerations to be made.

How easy is it to do business with them? Are there any human beings who can intelligently answer questions available? Do they offer online services? Are the services easy to use?

What types of searches do they do? Not all background checks are the same. There are multiple areas to search in a criminal background check and it is not difficult to miss an issue with criminal history. Do they offer a credit history check? If your candidate will be handling money or valuable inventory you want to be sure they are creditworthy/ responsible.

Where do they look? Again there are multiple databases out there that may contain information you need and going with a budget priced background check company will likely mean they are doing a minimal/ surface search and not digging into detail.

Are they looking at workers compensation claims? There are people out there who “work the system” costing employers small fortunes in high monthly insurance costs due to false claims.

What is the company’s background? New companies pop up every day because someone has a get rich quick idea. Look for well established companies with a positive track record.

Interested in learning more about what is available? Contact the background check experts at Loss Prevention Systems by calling 1-770-426-0547 or visit on the web here: background check company

Filed Under: Uncategorized Tagged With: background check company, Background checks, criminal background check

Employee theft in Atlanta #1 source of reatil loss

September 3, 2010 by Staff Editor Leave a Comment

25% of economy in Atlanta is based on retail and close to half of all retail inventory losses are due to employee theft. Imagine what a boost the Atlanta economy would realize if businesses cut their losses in half or more.

Employee theft accounts for the largest source of inventory loss to retailers beating out the #2 source, shoplifting. Many retailers are surprised to find that the people they trust and socialize with are stealing them blind.

The University of Florida reports annually on retail security and the report is considered to be the “Bible” of the loss prevention world. In the 2009 study they found that 42.7% of inventory loss was due to employee theft and 14.4% involved collusion. Employees are teaming up with friends and family giving them the inside scoop of how things work in the retail store. They offer tips on how to avoid security cameras and even check them out and pass merchandise through without scanning it.

An Atlanta store owner called us because he suspected a long time employee of taking cash from the register and from back office receipts. During our investigation, it was determined that the store had also been losing merchandise at a higher that normal rate, and the cause of the shortage was unknown. After determining some of the items (some of the items were one-of-a-kind), our investigator found evidence of an Ebay store that had the items for sale. For more CSI (Caught Stealing Incidents) go here: CSI.

The good news is this problem can be identified and stopped. For help with your employee theft issues in Atlanta visit Loss Prevention Systems today.

Filed Under: Uncategorized Tagged With: employee theft

Atlanta Corporate Fraud Investigators Get Office Manager To Confess To $55,000 In Employee Theft

September 3, 2010 by Staff Editor Leave a Comment

Atlanta based Loss Prevention Systems’ corporate fraud investigator gets confession from Office Manager stating she stole over $55,000 by issuing checks to phony vendors.

The Accounting Department of an Atlanta area company noticed an unusual increase in supply expenses from one of its branch locations. Upon reviewing the payables, we were contacted to investigate the cause of the sudden increase.

Our corporate fraud investigator found a total of 57 company checks made out to two fictitious vendors and deposited to a single account. The checks had been produced by a former Office Manager of the company.

The former manager was located and contacted, and agreed to an interview with our investigator. In the subsequent interview, the former manager admitted to the theft of over $55,000.00 over a period of five months.

She would make out the checks to her own bogus company, then change the payee in the accounting system to a legitimate vendor, making it appear that a true invoice had been paid.

The former employee signed a statement admitting guilt and agreeing to pay the money back.

With this information and the checks as evidence, he employer took a warrant for the arrest of the former manager, charging her with Grand Larceny.

Loss Prevention Systems is an Atlanta area based company offering a very unique corporate fraud investigation service to businesses, often partnering with CPA’s CFE’s and attorneys. Our staff are licensed, professionally trained and certified investigators and interrogators who produce written confessions and iron clad cases for criminal and civil prosecution if desired with a 100% conviction rate.

If you suspect you are a victim of corporate fraud, employee theft ( white collar crime, internal theft) or you are a professional working a corporate fraud investigation and would like help getting to the truth, contact Loss Prevention Systems, Inc. in Atlanta here.

Filed Under: Uncategorized Tagged With: corporate fraud, corporate fraud investigation, corporate fraud investigator, employee theft, internal theft, white collar crime

How Do Checkpoint Security Systems Work?

September 2, 2010 by Staff Editor Leave a Comment

There are many types of anti theft devices. Checkpoint security systems are one type. They are easy to use and available for every type of product. There are three components to Checkpoint security systems. The first is the checkpoint tags or labels are placed on your merchandise. There are hard tags that can be placed on clothing, or there are sticky label that can be placed on virtually any other type of product.

The second component is the device that either removes the hard tags or the deactivation pads that deactivate the labels. These devices are easy to use so it won’t take long for your employees to get into the habit of dealing with the system. Checkpoint tags and labels are the highest quality in the industry.

The third component is the EAS (electronic article surveillance) antennas. There are a few designs to choose from giving you the option to have them stand out, which can be a theft deterrent all on their own, or you can have them blend in more so as not to detract from your store’s decor.

Once you have your Checkpoint security system EAS antennas installed you apply the checkpoint tags or labels to your merchandise. If someone tries to remove a tagged item from the store an alarm will sound when they pass by the EAS antennas. This alerts your employees that there is a potential problem and they can stop the person and resolve the issue.

It is extremely important to train your employees on responding to the alarms. If no one responds to the alarm the customer will leave. Studies show that most people only steal when they have the opportunity to do so. By responding to the alarms you take away their opportunity thus reducing your shrink rate and retaining your profit margin.

For more information: checkpoint security systems or call 1.770.426.0547

Filed Under: antishoplifting Tagged With: anti-theft devices, checkpoint security system, checkpoint security systems, Checkpoint tags

Security Tags On Clothes That Make a Shoplifter Think Twice

September 2, 2010 by Staff Editor

Retail theft is a part of the retail store business. The retailer’s of the past used to just except theft as a part of life. It is a fact that retail theft drives the cost of merchandisehigher. The key to dealing with shoplifting is controlling it to a level that is acceptable (if there is such a thing). So how do we make shoplifters think twice and go somewhere else? Clothing alarm systems!

When you start talking about clothing security it gets even trickier to catch the shoplifter because many clothing thieves wear the shoplifted item out of the store as if it were their own. The good news is that retail can fight back against this type of shoplifting.

Clothing alarm systems are simple for the retail stores and their employees to use. The systems are also powerful enough to stop the criminals while being cost effective. There are many useful features and benefits to using clothing alarm systems.

Here is how these systems work: Clothing alarm tags are attached to merchandise and the antennas at the doors detect the tag when the shoplifter tries to exit. This system sets off an audible and visual alarm which alerts the retail employees.

Keep in mind this is only one of a clothing security systems many advantages. Features, like people counters, analytics, alarm management are now available. These systems are designed for one thing: reducing shoplifting!

A clothing alarm system makes it easy on the good guys and hard for the bad guys. It is not unusual for a system to reduce shoplifting by 60% or more.

Filed Under: Uncategorized Tagged With: clothing alarm, Clothing Security, security tags on clothes

Are YOU The Cause Of Increased Shoplifting In Your Retail Store?

September 1, 2010 by Staff Editor Leave a Comment

Me? Prevent shoplifting? Studies show that a lack of deterrence efforts by retailers will encourage up to 75% more shoplifting in a retail store. It makes sense, do nothing and you leave yourself wide open. Not only will a shoplifter hit you but they will come back time and time again. And to add insult to injury they will tell their shoplifter friends. Suddenly your store is “shoplifting central”.

Shutting down shoplifters is not rocket science. A “good” program to prevent shoplifting consists of employees that have been trained and are comfortable in customer service tactics that deter shoplifters. It’s simple really; Approach any suspected shoplifter as you would a customer. “Hello, how can I help you?” This type of simple greeting will shut most impulse shoplifters. They will not shoplift in your store during that visit.

A “great” program to prevent shoplifting takes more. You must know the techniques to shut down amateur and professional shoplifters. This takes a bit more skill and knowledge. In addition to prevent shoplifters from cleaning you out you must also understand that they know your store as well as you do. They will select a time of day when your employee to customer ratio is the lowest. Since you are busy it makes it easier. To compensate you must use an Electronic Article Surveillance (EAS) system. EAS systems like a Checkpoint system give the retailer an equalizer in the fight.

Aggressive and positive customer service that is appealing to customers and very unappealing to shoplifters can only be achieved with training. But the key is that once your people are trained you as the leader must reinforce it. We have all put programs in place then walk away feeling great. We solved the problem! However, six months later we are no better off. That’s because we did not keep it a priority with our employees.

Do not be the cause of your shoplifting problem. Prevent shoplifting every day, day in and day out.

For more contact us at prevent shoplifting or call 1.770.426.0547

Filed Under: Uncategorized Tagged With: Prevent Shoplifting

Employee Theft…Management Is Creating It?

September 1, 2010 by Staff Editor Leave a Comment

Employee theft also known as internal theft causes close to 50% of retail business loss. In the thirty years of conducting employee theft investigations it still shocks me what a poor job most businesses do in common sense prevention. A good example of this is an employee theft investigation I did where $5000 in fraudulent business checks were cashed. It turned out that the back stock of checks were unsecured in a storeroom with office supplies. Janitor’s stole twenty some checks from the middle of the stack waited a month and them began to cash them. Those checks should have been secured under lock and key with strict access. The checks should be issued and logged out to the person that processes them.

Every day we drop our guard because it is more “difficult” to do it the right way. Doing it the right way prevents employee theft. That is the key, “prevention”. Or we say, “oh I trust that person, they would never do that”. Those words get more businesses in trouble. When a management person says that they are basically saying that they have no business common sense.

Another employee theft investigation involved employees that stole hundreds of thousands of dollars in product from a distribution center they worked in. They were given keys to the facility that had millions of dollars of merchandise in it. The alarm system was not set up to log opens and closes. So coming back at night and loading up a truck was not a problem.

Employee theft or internal theft lurks around every corner. You have to be proactive to prevent it. Internal theft will not go away or stop on its own. In fact, it will get worse. Get your policy manual off the shelf, dust it off, update it and make sure people understand that this is your “business bible”, live it and enforce it. That does not mean that it never changes, far from it. As your business changes your policy and procedures should change. If you don’t then make sure you budget for employee theft investigations.

For more information, contact us about internal theft or call 1.770.426.0547

Filed Under: Uncategorized Tagged With: employee theft, employee theft investigation, internal theft