Traitor In Your Company


Detecting Fraud in the Workplace

As an employer, understandably you think it is your responsibility and moral duty to empathize with and trust those working for you. Indeed most of the time that makes the most sense. However, as much as this is important, it is also necessary to at least be aware that there is always the possibility that your employees may get involved in deceitful activity under the garb of honesty. Most employers realize very late that there was a traitor operating right under their nose. And the saddest part of all is it often turns out to be one of their most trusted employees.

It is necessary to detect and solve the problem of occupational fraud because it not only costs you thousands of dollars but can also result in confidential company information being given out. This article discusses how employers can protect themselves against occupational fraud by identifying behavioural flags at the right time.

First, it is very important to understand what we mean by occupational fraud. It involves using one’s occupation fraudulently for personal gains. The employee in question might steal company money, sell company property (including secrets), and fabricate financial documents or misuse corporate assets.

Why does it happen?

According to criminologist Donald R. Cressey, there are three factors that might instigate an employee to go down the wrong path. It includes incentive, opportunity and rationalization. The incentive is the factor that drives the person to commit a fraud. The first is the desire to live a luxurious life which requires money. The second possible motivation could be economic distress.

Speaking about the aspect of rationalization, the perpetrator tries to justify his actions. In some cases, he is in dire need of the money. He steals the money secretly with the intention of replacing it later before it is known to anyone. However, he gradually goes deeper and deeper not realizing it.  Second, he chooses to steal because he believes it to be his right. He believes he is not being paid for what he deserves. Finally, he thinks he has earned it.

The third aspect according to Donald R. Cressey is opportunity. The employee in question looks for the right opportunity to commit the fraud. This is either when no one is around or when the fraud controls are relaxed.

Behavioral Patterns That Ring the Bell for You

  • If you have an employee that works extraordinarily hard. You will notice that the person rarely takes time off or works odd hours to complete tasks assigned to him. Also, he or she rarely goes on a vacation. He is planning the whole thing, covering up for it or waiting for the right opportunity.
  • If you have an employee who lives way beyond his means. For example, an employee who finds it hard to meet his monthly budget has recently purchased a pricey car or a luxurious mansion.
  • If an employee is in economic distress. Everyone faces some form of financial crisis. It could be an exorbitant medical bill or a house mortgage. However, there are some who are deep in debt and desperate for money. If such a person is given charge of the cash or checkbooks, you are tempting him to steal.
  • If an employee has specific addictions. It could include substance abuse, alcohol or gambling. These people are always in need of money and they would do anything to get money.
  • If an employee is a real complain box. There might be employees who feel they are underappreciated or under paid and look for other ways to enrich themselves.
  • If there is an employee who becomes suddenly very secretive about his actions and refuses to let anyone else take charge of duties.
  • If there is an employee who is unnecessarily close with stakeholders, vendors and clients.

Indonesia Private Investigation Agency (IPIA) and our sister agency Bali Eye Private Investigation Agency (BEPIA) are fully registered agencies offering investigation services to the private and business sectors throughout Indonesia and South East Asia.


About the Author

IPIA's Director of Investigations is an Indonesian national with a Diploma in PI work (with distinction) from the UK and an Australian Government accredited Certificate in Investigative Services. She has worked on over 400 cases for private and business clients.