Posts Tagged ‘embezzlement’

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2
Aug/1015

Criminal Records: Changes in Hiring For Connecticut

As reported in the Journal Inquirer June 28, 2010, Connecticut joins the growing list of states and cities adopting what is termed the “ban the box” movement within the hiring process.

The box the article is referring to is on the job application completed by each candidate.  The question asks if the candidate has ever been convicted of a crime.

The law for Connecticut goes into effect October 1, 2010.  The article states several cities including New Haven, Hartford and Norwich has also adopted the “ban the box” change. It appears the law change will only effect state and city positions at this time.

The change does not prohibit an employer from asking the question, just not on the initial job application form.  The theory is that if the candidate has been successfully screened into a potential hiring position, during a face to face the candidate can offer details and explanations as to why they have the conviction, whereas a check box on the application could lead to a sure fire screening out of being potentially hired.

As a fraud examiner who has dealt with many individuals who have made poor decisions, permanently effecting their family, reputation and career, I encourage every employer to ensure themselves that this question regarding the potential trustworthiness of a future hire is included within every hiring process.  It’s not to say that anyone convicted of a crime should not be hired ever again, certainly that should not be the case.  However, every employer should have all the facts about a candidate’s background to allow for an informed hiring decision.

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Filed under Prevention 15 Comments »

8
Jul/100

Can You Prevent Employee Embezzlements?

The answer is yes, most employee embezzlement schemes can be prevented. There are practical measures any employer of any size can implement to prevent employee thefts and embezzlement.

However, due to the very nature of fraud, creative employees working within an environment constructed with ineffective or non-existent internal controls, or worse, complacent supervisors and owners who simply do not perform the reviews and control measures, often circumvent any preventive measures.

That is why detection measures need to be incorporated within the control structure, to detect a scheme as early as possible, and to minimize the loss to the organization.  Together preventive controls coupled with detection measures are any employer’s best line of offense against the risk of employee embezzlement.

The third and possibly the most important component is to ensure the organization has adequate employee dishonesty coverage.  When an employee circumvents both preventive and detection measures, the losses add up, and very often the only means to recover the diverted funds is through an insurance claim. Adequacy in this day and age should start at $100,000, but is subjective to each organization.

Last Monday my latest book was released by Wiley, Preventing and Detecting Employee Theft and Embezzlement: A Practical Guide. I encourage everyone who has employees, or who is responsible for employees within the financial areas of any business or organization, to read my latest book. While it appears to be a bit of self-promoting, I wrote this book in response to twenty years of requests from business owners and managers who direly needed a practical resource to easily follow for implementing internal controls within their business. Well, now it exists.

The book can be found anywhere on-line where books are sold. Here is one link for Amazon.

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13
Jun/106

Embezzlement and Gambling… In Connecticut?

After speaking at a recent session following a presentation of gambling as an addiction, I started paying closer attention to this issue.  In Connecticut we have two casinos that opened about ten years ago.  While embezzlement to support a gambling problem has come up in my cases, it hasn’t been as prevalent as one would think with two casinos in the state.

What amazes me more than the gambling is the amounts that can be lost, and with the embezzlements, the amounts that can be diverted from an organization to support gambling without the organization missing the funds.

Case in point comes from an article in today’s Journal Inquirer, a local Connecticut newspaper.  “Woman gets 9 months for thefts.”

The woman in the article was convicted of embezzling $335,000 from a local school lunch program.  She was the director of dining services for the local town, and took cafeteria receipts, concealing the thefts with falsified logs.  The article also stated she lost more than $380,000 over six years gambling at the slot machines.

The real questions I have after reading this article are 1) how much funds flow through this town’s cafeteria services to have been able to loose $335,000 and not miss the funds, and 2) where were the basic level internal controls over cash receipts, collections, entries and deposits to have both prevented this from happening in the first place, and also to have detected discrepancies as soon as they started to occur?

I guess a third question would be fair as well – towns like this town undergo annual financial audits by outside accounting firms.  Given the existence of casinos in CT and the high risks of gambling and embezzlement, why wasn’t such a large theft detected as part of any year’s audit?

Just makes me wonder just how much fraud, theft and embezzlement is occurring as we speak, waiting to be detected or discovered, or more likely, waiting for accidental identification after the snowball effect has occurred.

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Filed under Battle on Fraud 6 Comments »

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