Suspected Employee Embezzlement: What Can I Do from a Legal Standpoint?

Working hard to establish a successful business only to have suspicions that one of your so-called trusted employees is embezzling money is disheartening. Analysts estimate that employees working for US companies steal over $400 billion every year. Unfortunately, this problem is all too common, regardless of a company’s size or industry.

If you think that one of your employees has embezzled money from your business, you need to gather facts before confronting that person. The goal is to determine if a theft occurred, the amount of money taken, and the method of stealing. Most employees who embezzle get caught because of suspicions, which the employee then validates through surveillance, firsthand witnesses, and financial audits.

However, before taking any action, attorneys who handle these types of cases recommend speaking directly with the person’s manager or supervisor to maintain privacy and confidentially so that you are not at risk for a defamation lawsuit if the employee has done nothing wrong.

Although you have your sights set on one person, when investigating, you need to identify all employees who had access to the money as well an opportunity to take it. Even if those employees have a solid work history, have been employed with your company for a long time, or you know them on a more personal level, it is important to rule out all potential suspects.

If an employee stole a small amount of money, you might choose to terminate that person, accept the loss, and move on. Getting law enforcement involved is at your discretion. One the other hand, if an employee embezzled a significant amount of money, you need to contact your local law enforcement and hire a reputable attorney. That way, you are not at risk for conflict of interest.

Often, attorneys who handle employee embezzlement cases recommend hiring the appropriate experts, including a forensic accountant or computer data retrieval specialist. If your company is publicly-held, one of the attorney’s roles is to ensure that you stay compliant with applicable fiduciary obligations and securities law.

After confirming the occurrence of employee embezzlement, your attorney should also advise you to speak with your insurance company or risk manager. When an employee steals a substantial amount of money, your attorney will assist in evaluating your rights under the insurance policy. That way, you know whether the policy covers the loss. Often, employers never recover money from the employee but instead receive compensation from the insurance company.

You will receive help in carrying out interviews with other employees in a discrete manner, with every conversation carefully documented. Preferably, the interviews should be captured and transcribed into written reports used by law enforcement and your attorney in seeking both prosecution and compensation.

Although embezzlement is a crime, there are certain civil components. Therefore, once you confirm that a certain employee embezzled from your company, it is always in your best interest to speak with law enforcement and hire an attorney who will guide you through the process to ensure the best outcome possible. For help with an investigation, insurance, disclosure, and recovery issues associated with employee embezzlement, working closely with a qualified attorney is essential.

Posted on:
June 29th, 2017

Category:
Criminal