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Tom Muleya Fraud Insight
In the previous articles, I focused on crimes involving employees and reiterated the need for employers to keep a sharp eye on theft and fraud by their staff.
We noted that some employees steal from their employer in so many ways that include swapping of money, conversion to personal use, collusion with company clients, generation of fraudulent receipts, voiding, hacking, generation of fraudulent transfers, and unauthorised access.
We also noted that employees are motivated to steal from their employers when they perceive an opportunity and a low chance of detection.
The motivation is enhanced by gaps or weaknesses in a company security policy with regards to punishment for criminal behaviour.
Where thieving employees realise that the company has a tendency for not reporting thefts and frauds that occur within a company for fear of bad projection of corporate image, they even steal more.
When some employees steal from their employers, they immediately use the loot to create their own empires.
While others may steal and embark on a business or trade different from the principals’ affairs, the majority will simply divert or channel stolen funds and resources (raw materials and finished products) to their newly created company in the same line of business.
Stealing from an employer is a crime, and starting a business using stolen money and resources from an employer is criminal and is an act of laundering.
Where an employee embarks on a business similar to the principal’s affairs without declaring an interest is also a criminal offence.
The following are some of the red flags or tell-tale signs that the employee is stealing from the employer and running a parallel business:
- Sudden flashy life. Where an employee without a justifiable cause suddenly begins to lead or live a flashy life in sharp contrast to his or her income, is an indicator theft may be taking place. In some instances, employees begin to drive in posh and executive vehicles.
- Unexplained shortages of resources from employee’s department. When material or financial resources start to disappear under unclear circumstances, it is an indicator that they are being directed somewhere else.
- Giving little attention to job responsibility and committing more time to personal affairs This involves stealing of company time to do personal errands. In certain instances, some employees will give excuses to absent themselves from work so that they attend to personal business.
- Sudden unexplained departure from employment. This, however, is not always the case that when an employee suddenly leaves employment, they would have stolen. For thieving employees, when they realise that they have had enough loot from their employer, they quickly leave or resign before their criminal activities are detected.
- Unclear explanation of missing resources by employees. Where an employee fails to give a satisfactory explanation or report to account for company resources, such as how the commodities were distributed and used, it is an indicator theft or fraud is taking place.
Get empowered by Fraud Insight and be part of a solution to fraud and theft involving employees. Stay tuned for other upcoming issues on fraud insight.
Tom Muleya is a Detective Assistant Inspector working under CID Commercial Crime Division (Northern Region), Harare. He is also a member of the National Cyber Security Taskforce, Zimbabwe.For your feedback, WhatsApp line: 0772 764 043, or e-mail:[email protected].
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