The first few hours after a company is alerted of an inside attack are crucial moments for business owners. Understandably, anyone might become overpowered by emotion and even lash out at the culprit—and from a legal perspective, this is a recipe for disaster.

If you’re a company who has fallen victim to fraud, we offer the services of a private investigator (Ohio-based) who can assist you with everything you need to solve your internal problem.

This article aims to inform companies of the proper course to take when faced with fraudulent employees. If your organization has been infiltrated by a fraudulent employee, take these immediate steps:

Step One. Put an end to the fraudulent activity once and for all.

Mitigating the effects of an internal breach requires quick, decisive action. The moment you discover that your employee has been engaging in this behavior, you should stop it from going any further right away. This could be accomplished through the following:

  1. By taking away the employee’s access to company funds, or other resources that they might be exchanging for money. Blocking their IP address, remote access, and other means of access immediately is a necessary first step.
  2. By removing the employee’s office computer, which may contain valuable information about how they have been carrying out their fraud. The computer must be kept in a safe place that is inaccessible to other people, in case anyone else might attempt to wipe out the evidence.
  3. By isolating other computers that the suspected employee might have used as well, even if they were owned by another staff member.

For companies based in Ohio, one essential course of action to take is to hire a private investigator (Ohio is fortunate enough to have an abundance of experienced and professional private investigators) to recover deleted files in the computer’s hard drive (among other things), as these could be detrimental in building a case against the employee later on.

In some cases, police may not even acknowledge evidence obtained by persons who are not qualified.

Step two. Conduct an investigation to gather facts.

Your employee’s fraudulent actions may have come to light in a variety of ways: an anonymous whistleblower, a formal complaint from a witness, or their increasingly suspicious behavior.

The company may decide to appoint someone from HR to conduct the investigation, but in most cases a professional and unbiased set of eyes is recommended. Regardless of whether internal personnel or a private investigator will be tasked to do the job, it’s a critical role and must be selected with great care. The assigned person should, at the very least, have experience in conducting investigations or have received training on the subject.

Prior to approaching your employee and making accusations, the investigator and business owner must collect as much evidence as they can, as well as witnesses who can back up the claim. Another additional consideration is the option to make an insurance claim or to pursue civil or criminal charges against the employee. For these cases, it’s best to hire a private investigator who specializes in these types of proceedings and has experience in processing the documentation involved. They should also be able to testify in court whenever necessary.

More often than not, if the person committing fraud is a senior executive, or someone holding a high position in the corporate ladder, their work colleagues might be reluctant to volunteer information despite having knowledge of the crime. In such instances, the company must provide assurance to these employees that they won’t be pe punished for sharing what they know.

It’s unwise to confront an employee and charge them of wrongdoing before making 100% sure of their involvement.

Check out the following guide as to what information would best assist the police during cases of fraud:

  1. Details of the employee who committed the misconduct. This is pretty easy, as you likely have this information already stored in your database. Their name, address, birth date, passport details, vehicle information, contact points, as well as employment details could all be helpful.
  1. Summary of claims. A brief and chronological storytelling of the events in written form is invaluable to the investigation. If possible, include dates, times, places, and other helpful details.
  1. Proof. Gather as much evidence as possible to support your allegations, with descriptions of their purpose in the investigation. These could also include corporate documents such as bank records, receipts, invoices, contracts, and audit reports.
  1. Witnesses. For fraud cases, witness statements are also extremely important. Along with a summary of their testimony, you should include personal details such as their names, addresses, contact numbers, position in the company, etc.

Step three. Have a closed-door meeting with the employee in question.

Accusing someone of fraud, especially a member of your organization, is no small matter. It must be approached with caution and a clear head. Make sure you have at least one witness present during the interview. You may seek the advice of an attorney before going through with the discussion, as some legal issues may arise.

One important topic to tackle is the manner in which the employee will be leaving the company. They could be allowed to resign, or they could be terminated. The decision is up to the discretion of the employer.

Terminating an Employee Suspected of Fraud

In some cases, an internal investigation is not enough to condemn someone of fraud. Katie Sweatman of the law firm Mason Sier Turnbull says that in Australia, the law dictates that even after a company determines that an employee has committed fraud, no termination of employment shall take place until sufficient evidence has been found to support the allegations. In order to minimize the risk of being charged with claims of wrongful dismissal, it’s best to take a measured approach when dealing with employee termination in these situations.

Step four. Report the fraud to the proper authorities. 

The business owner should also have a conversation with the employee about the company’s lost assets. If the wrongdoer offers to return the stolen corporate property, partially or in full, it should not be on the condition that they be spared from any statutory consequence. The choice to condemn should be made by the business owners alone.

There are companies that let these employees go without alerting police about their behavior, but they risk exposing other businesses to the person’s theft. It’s worth mentioning that by not reporting a fraud, the company could be opening itself to the possibility of being charged by the next business that falls victim to the dishonest employee. Your inaction could damage employee morale, customer and stakeholder trust, and overall reputation.

Step five. Determine what drove the internal breach.

Understandably, the focus of most companies in cases of insider attacks is mitigating the effects and developing plans to prevent future occurrences. Businesses rarely consider going deeper into why the breach occurred in the first place. Did the employee feel he was being unfairly compensated? Did he feel like the company wronged him to the extent that he needed to retaliate? Or were there external factors that led him to commit theft, i.e. marital problems or financial pressures?

By identifying the reasons for their employee’s behavior, companies can make adjustments whenever necessary (e.g., reviewing their payroll system or assessing the corporate culture).

Calculated Vs Emotive Responses

Even with the proper checks in place, there is no assurance that employee fraud can be totally averted. However, being prepared with a plan of action if and when an incident like this will occur can immensely help any business owner to deal with such an overwhelming loss. Compared to a measured approach, an emotive response might open up an opportunity for the dishonest employee to cover up his tracks or take action against the business owner.

Is your company plagued with internal fraud? Are you shopping around for an Ohio private detective? Then you’ve come to the right place. For the best and brightest Pennsylvania and Ohio private investigator in the business, give us a call at our toll-free hotline (1-877-874-9394) and get a complimentary consultation!