Discuss employee theft, how employees steal from their employers, the different levels of employee theft and possible employers’ responses to employee theft.

Employees theft continues to be a challenge for any employer in the US. For example, we can read in the National Retail Security Survey, 2013 (1) that “employee theft still constitutes the largest majority of losses at 43.9 percent or approximately $15.1 billion, followed by shoplifting, which makes up 35.7 percent of shrink or $12.3 billion.” Therefore, it is not a surprise that such huge losses are one of the biggest problems that employers are facing in the today’s economic environment or have always faced for that matter. Employee theft is manifesting in different ways but, somehow, a theft done by a low-level worker is almost always comes first to our minds when we hear about this form of white-collar crime. However, we should not forget that any person who is paid by an individual, an owner or a business is an employee by the definition; therefore, a highly paid manager or a CEO can also commit a theft. According to the book Trusted Criminals by David O. Friedrichs, page 114, “executives and managers are responsible for the largest proportion of losses business suffer at the hands of employees.”

In the above-mentioned book we can read examples where lower level employees can embezzle significant sums of money or property. In one case, a Goldman Sachs secretary managed to embezzle at least $7 million by forging transfer authorizations from her boss’s accounts. On the other hand, a case of Robert Vesco, who allegedly embezzled $224 million from Investors Overseas Services, is a clear example that a theft committed by a well-placed high-level executive can outright thefts committed by lower level employees. Nonetheless, both examples are clearly showing that a theft committed by employees can seriously hurt any business or can even cause the closure of a business.

In a very broad sense of the following statement, any employee could be involved in a theft if we consider avoidance and neglect of duty or responsibility as a form of crime. There is also possibility that some employees could be involved in crime such as the use of company’s car or official working hours for private purposes even without realizing that he or she is committing crime. Here we can say that some forms of crime such as the previously mentioned petty crimes may not be recognized as crime neither by employees nor by employers.

Whilst previously talking about various forms of employee theft, it should be mentioned that employee theft could also occur on various levels. For example, pilfering refers to petty theft whilst larceny refers to a case when an employee takes something of value. Furthermore, chiseling refers to cheating or swindling and fraud occurs when a theft is committed through misrepresentation. Embezzlement is “the crime of stealing the funds or property of an employer, company or government” and “misappropriating money or assets held in trust.” (2) (3)

However, it is prudent that a particular company has in place internal oversight procedures that could help prevent possible thefts, embezzlement or other criminal activities. The presence of such procedures can at least help that a possible wrongdoing is discovered as soon as possible and could be adequately addressed by the senior management in a timely manner.

References:

1. https://www.securityinfowatch.com/news 10732886 2. http://www.legal-explanations.com/definitions/embezzlement 3. http://www.juddlawgroup.org/employee-theft-and-embezzlement-part-2