To Catch a Thief: Practical Thoughts on Confronting a Potential Embezzler

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For an employer there may be no worse feeling than the realization that one of your employees is stealing. It may start as something in the books they can’t explain, something “funny” that their internal controls catch or that their accountant asks about and they don’t have a ready answer. That confusion begins to harden to suspicion as a pattern develops – money inexplicably moves out of the company by the same person on multiple occasions. The suspicion then may even become anger as the employer realizes that a longtime, trusted employee has been diverting company resources to their own pocket. Because you’re their trusted attorney, they turn to you looking for advice.

So what do you do? There are many decisions to be made as soon as employee theft is discovered and you’ll need someone who has a grasp of the playing field to help you make the best ones, so get some criminal law talent on your client’s team. Decisions made early will often guide the possible outcomes later.

A word of caution: Getting an employment attorney on your team is also important. While this article approaches the problem from a criminal investigations and (possible) prosecution perspective you want to make sure your client’s actions don’t get them an employment lawsuit to add to their troubles.

A critical decision is whether (or when) and how to confront the suspicious employee. Many employers just want the diversion to stop – to “turn off the faucet” so to speak – and believe alerting the employee in question will do just that. However, that confrontation can be a critical time to attempt to gain the most convincing evidence against an embezzling employee – an admission of guilt – if they, in fact, have committed the theft. The best course of action may be to more closely monitor the employee first and gather additional evidence that will either condemn or exonerate the suspicious employee. Employers will need your help in balancing the effort to get hard evidence with the rights an employee has in the workplace. For instance, monitoring an employee’s private cellphone via surreptitious means is a big mistake for employers (and probably against state and federal law). However, actions like querying transactions in a company database to look for discrepancies, reviewing company banking records or following up with company clients who have interacted with the suspicious employee could be quite helpful in catching a potential thief.

If a decision is made to confront a suspicious employee then your client must know that it requires careful and thoughtful work. Everything must be planned ahead of time: who will speak, what parts of the investigation will be revealed to the employee (and what won’t be) and which strategies will be employed (and which won’t be) if the employee denies the theft. Getting an audio (and video) recording of the confrontation is highly recommended. Moreover, it is vital than any workplace rights an employee has are vigorously respected. Almost every factually guilty employee, when confronted with the idea that they’ve stolen from the company, will initially deny wrongdoing. Having ready evidence to show them at the time of a confrontation is often the best way to potentially get past the denials and get some admissions from the guilty employee.

Tony Vain Investigations

Having solid evidence to turn over to the appropriate authorities – local police or federal agencies – can be vitally important in having a prosecutable case should you decide you want the embezzling employee to face the music in a criminal case. Strong evidence will also be important to any insurance investigator should the company decide to make an insurance claim for the loss to the company. Most corporate insurance policies have provisions for dealing with theft; they should be thoroughly reviewed by the company’s counsel as soon as the initial theft is detected. Even if the company decides not to make an insurance claim, it is better if it is the company’s choice not to claim rather than the insurance company’s decision not to pay the claim for lack of evidence of the theft.

The confrontation of an embezzling employee is a critical part of holding them accountable for their theft. The parties involved in a confrontation must have an understanding that whatever happens at the confrontation will be reviewed by investigating authorities, prosecutors, judges and even juries (not to mention appellate courts and potentially the media depending on the situation). Dealing with an embezzling employee can be a harrowing and even emotional process for a client. Making sure that your client has the right legal resources to help them through the process is job one. Rob McGuire

Golf Expert Witness

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