How can you be sure an employee isn't embezzling from you?
Often it's the employee you'd least suspect who is the culprit, says Heinz Ickert, president of Columbus-based Ickert & Co. Ickert's firm employs CPAs trained in forensic accounting and is part of a group of companies that form an entity called Fraud Alliance. Weidner Associates, private investigators, and computer forensic expert CompuSloop complete the Alliance.
"Most frequently what is being stolen is cash," says Ickert.
And the vast majority of incidents involve fraudulent disbursements.
"An accounting person creates a fictitious employee or vendor and pockets the paycheck or payment," he says.
Companies like those involved with Fraud Alliance can conduct an audit of a firm's records and question suspicious transactions.
"A CPA doing a regular audit is not looking for this type of problem," says Ickert.
Glen Morrow, president of Morrow-Mackey Inc. in Heath, says that thanks to an employee tip, his company was able to recover 100 percent of the cash that was misappropriated.
"Glen Morrow was smart," says Ickert. "His first action was to call his attorney, who called me."
Once Ickert completed the audit, he confronted the employees responsible for the embezzlement. Both confessed, and they turned over the funds.
Unfortunately, this is not a typical result.
"In a civil suit against the perpetrator, you can typically regain about a third of the money stolen," says Ickert.
To prevent theft at your firm, Ickert recommends keeping accounting functions separate, or incorporating checks and balances.
"Do comparison checks like Social Security numbers of employees and tax Ids or addresses of vendors," he says. "And make it known you have a zero tolerance theft policy."
And, says Ickert, if you suspect an employee, do not confront the person or fire him or her, especially if you don't have evidence. Instead, hire an investigator to determine whether the person is indeed embezzling.
How to reach: Fraud Alliance, (614) 464-3343