Asset misappropriation is the most common form of occupational fraud. According to the Association of Certified Fraud Examiners (ACFE), Occupational Fraud and Abuse are defined as "the use of one's occupation for personal enrichment through the deliberate misuse or misapplication of the employing organization's resources or assets."
At FBIS our heart goes out to you. Having a trusted employee, partner, co-owner, or member of your team embezzle or steal from you is a betrayal that no one deserves to endure. We feel the pain. Small to Medium size businesses fall to these betrayals most often due to limited resources, internal control weaknesses and trusting relationships. Even large companies such as Amazon fall victim to employee embezzlements.
Employee theft, commonly called embezzlement, is perpetrated through a variety of fraudulent disbursements such as billing schemes, payroll schemes, and expense reimbursement schemes. Billing schemes often involve the use of a shell company or fake vendor. Payroll schemes often involve a non-existence or ghost employee, falsified wages, and falsified commissions. Expense reimbursement schemes often involve mischaracterized expenses, overstated expenses, fictitious expenses, and multiple reimbursements for the same expense.
Embezzlement can continue for years. Most employees who steal from companies continue to steal from them, which makes concealment the key element of the crime. As the embezzler's span of theft continues, the fraudulent disbursement amounts generally increase, as well as the pace of the fraudulent disbursements.
The fictious payments in these schemes are fueled by the production of false documents that cause personnel to think that money is genuinely owed to a particular person or vendor. Employees often unknowingly pay the fraudulent disbursement for the thief because it is believed to be legitimate. The payment is entered into the accounting system (books) as a valid payment and the thief often does not have to worry about concealing the theft.
Our agents are skilled in investigating these matters and can provide follow up consultation on risk mitigation strategies on how to prevent them from reoccurring in the future. The adoption of internal controls tailored to your needs can be an invaluable aid in preventing future losses.