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Is Your Employee Committing Fraud Against Your Business?

Scales of Justice

Employee fraud is actually a serious problem among businesses, with nearly one in three businesses bankruptcies a result of dishonest employees. It’s crucial that you treat this threat seriously. You’ll want to know the warning signs of employee fraud, put systems in place to prevent it, and have a competent litigation attorney to advise you and file suit in the event that employee fraud does occur.

Warning Signs of Fraud

Fraud occurs wherever there is access to money and insufficient oversight. It can be anything from an employee pocketing customer money to sophisticated doctoring of company books. For most small businesses, there are a few particularly common scenarios of employee fraud. One involves check tampering, or employees using company checks to pay themselves. Another strategy is skimming off money that comes in, sometimes accompanied by fraudulent accounting. One other strategy is through reimbursement, where an employee sent on a business trip might pretend to rack up fictional expenses and submit for reimbursement, then pocket the money they receive. All of them can result in business litigation.

Fraud Prevention and Protection Strategies

Ideally, you want to make it very difficult for an employee to commit fraud against you and your business. That way, even someone who’s tempted will be deterred. To protect your business, it starts by informing employees that fraud and theft are not acceptable and that there will be consequences. After that, the key is an oversight. Make sure financial records are up to date, establish notification systems for major expenditures, and make sure that you know who has access to company funds. If you can make it hard enough for employees to commit fraud, you can hopefully avoid an expensive corporate lawsuit.

Filing a Corporate Lawsuit

You don’t want to have to sue an employee for committing fraud against your business, because it’s expensive, time-consuming, and stressful. At the same time, if you’ve put in reasonable safeguards and someone still steals from you, the fraud was probably deliberate and calculated, which certainly warrants business litigation to receive damages. As your litigation attorney should attest, to have a strong case against your employee, it’s useful to have some kind of physical evidence that links them to the loss you suffered.

While it’s frustrating to deal with employee fraud, it’s dangerous to ignore it as a possibility. From background checks on new hires to deliberate safeguards throughout the operations of a business, you should be able to protect your business from fraud. In the unfortunate event that it still occurs, you very well might want to get your Portland or Seattle litigation attorney on the case.

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