When The Suspect Works For You

Editors note: Fraud is always a concern for small- to mid-sized businesses, which is why we have updated this important post on the subject.

Stop Fraud In Your Business

Much of the fraud committed against companies is done internally. What should you do if you suspect that one of your employees may be diverting or misappropriating company assets?


Listen to episode 123, “Protect Your Organization From Mistakes, Fraud, And More With Internal Controls, on Rea’s podcast, unsuitable.

  • Contact your legal counsel. Suspects have rights and you must be sure to respect them even if you suspect an employee of fraud.
  • Do not confront or terminate the suspect. Besides opening yourself up to a wrongful discharge and defamation of character lawsuit, you alert the suspect. The employee has a fiduciary duty to the company to cooperate in an investigation of suspected wrongdoing.
  • Do not violate the employee’s private space or personal possessions.
  • Do not attempt to investigate the employee’s computer. Merely opening files will alter the data and diminish or destroy its usefulness as evidence. Even turning the computer on can activate programs that destroy evidence if a password is not promptly entered. If you find that you mush investigate further, seek help from a computer forensic specialist who can obtain evidence from the computer without altering evidence of data.
  • Contact a forensic specialist for assistance in verifying your suspicions, properly gathering the evidence for protecting your legal recourse and minimizing the financial damage to your company.

Employee theft can be devastating emotionally and financially. Taking the proper actions as soon as you suspect fraud can minimize financial loss and prevent you from becoming a defendant in addition to a victim. Contact Rea & Associates to speak with a certified fraud examiner to learn more.

By Mitchel Huffman, CFE (Lima office)

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