Do you know who is trying to steal from your organization? You may have a few suspects, but without credible evidence, you can’t take action. What if your accountant, who oversees day-to-day transactions, is the culprit? Your warehouse manager could be. How can you be sure your warehouse manager isn’t funneling money to a different bank account? As a business owner, it’s tough to keep an eye on every aspect of your business. You won’t see internal fraud unless the numbers and figures don’t add up. The only way to get to the root of the matter is to conduct a detailed investigation, with the help of private investigators.
If you are thinking of carrying out an internal fraud investigation on your own, it won’t be that simple. First, you need to gather evidence legally and without bias. Then you risk getting entangled in a situation where the suspect may file a defamation lawsuit. By all means, investigating on your own is a bad move. Since you’re looking into financial irregularities, why not approach licensed private investigators from Oklahoma? This way, you will be in a much better position.
That is why, in this blog, we’ll cover how private investigators can help you uncover internal fraud in your organization. We will also discuss how investigators collect evidence, how they help protect your company from major financial losses, and, more importantly, lawsuits.
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Why Is Internal Fraud So Hard to Catch Early On?
For now, at least, no foolproof mechanism exists that can help you detect internal fraud. Often, the employee committing the crime is someone whom you trust and rely on. This is because they know how the system works better than anyone else, and they use the same information for their illicit gains. Moreover, they make a point of covering their tracks in ways that make it hard for you to suspect them. For example, they may create fake vendor invoices that are approved with little scrutiny. How can you be sure your sales manager isn’t involved in the fraud? More often than not, the suspect is someone in your inner coterie, and that hurts most.
Another issue that you have to deal with is the trust deficit that often arises when internal fraud happens. You cannot pin the crime on an employee without any strong evidence to back your claim. Without credible evidence, your company risks a defamation claim, which is never good. Also, if you try to handle it quietly, you may let the fraud continue while you try to gather evidence on your own. This is where the private investigators step in to close the gap. They do so by approaching the case as outsiders and methodically building a case by gathering details while staying within the legal framework.
The Most Common Types of Internal Fraud Oklahoma Businesses Face
As a business owner, there are a few things you must keep in mind. Internal fraud comes in several forms. So, watch for the following if you suspect fraudulent activity in your organization.
- Embezzlement: When one of your employees diverts or steals funds for personal use by manipulating the accounts or through unauthorized bank transfers.
- Payroll-Related Fraud: This happens when one of your trusted employees within the organization creates fake employees with inflated working hours. They may also approve fraudulent reimbursements.
- Fraudulent Vendor Payments: Watch out if any of your employees are working closely with any particular vendor to approve fake invoices or are collecting kickbacks.
- Stealing Inventory: Be mindful of any employee who might be looking for ways to steal any equipment or physical stock. They may try to cover the fraud by creating imaginary losses that are completely nonexistent.
- Stealing Trade Secrets: Look out for those employees who might be interested in stealing your trade secrets, or any such data that might benefit your competitors.
When Should You Call in a Licensed Private Investigator?
If the situation is beyond your control and things are getting out of hand, it will be a good idea to call in a licensed private investigator. Waiting for the situation to resolve on its own will be a grave mistake. When handling internal fraud-related investigations, the first thing you do is compute and check the numbers for anomalies. But that only delays the inevitable.
Instead, focus on the obvious red flags. So, how can you find out who is really milking your organization for their own financial benefit? Look for patterns like lifestyle changes that don’t match the employee’s pay grade. Lately, have you noticed any employee who seems omnipresent in the office and doesn’t take leave or go on vacations? What about an employee who is often seen in good terms with a particular vendor? These are warning signs you should watch for.
There is another way of proving your point. You know that last quarter’s sales numbers were relatively good. However, when you tally the revenue numbers, they don’t add up. That only means someone is diverting funds. But how will you find the real culprit? What evidence do you have to back up your suspicion? In your position, carrying out an internal investigation on your own will never help. This is where you bring in a private licensed investigator from Keefe Private Investigations. We have the resources, tools, and experience to help with the investigation.
What Makes You Rely on a Private Investigator to Handle Internal Fraud?
As discussed earlier, conducting an internal fraud investigation within your organization on your own is going to be tough. Hence, you bring in a licensed private investigator. The investigator will meet with you to discuss the motive behind your suspicion and whether you have identified a suspect carrying out the fraudulent activities. Next, they will review your records and focus on the employees for a closer look. For your benefit, the investigation is carried out across multiple levels, so that nothing is missed.
After reviewing the evidence you’ve collected so far, the investigator will review financial records, CCTV footage, and expense reports. The main idea is to look for any patterns or data inconsistent with what you presented. For active surveillance, the investigating team will discreetly observe suspects in public places and record their observations. The surveillance footage will be presented to you with time- stamped photographs and videos in a format that will help your attorney.
Investigators will also interview potential suspects you believe are tied to the fraud. They will conduct interviews in ways that keep suspects from realizing they are being investigated. So, you can expect a positive outcome once you hire professional investigators.
How Does Investigator Handling Internal Fraud Help You With Evidence?
In internal fraud investigations, there are a few things you need to know. You need detailed evidence that shows the scale of the theft in your organization. To help you with your case, your investigators will start by tracing payments to see how the money flowed and which accounts received the funds. They will also cross-check the bank statements with your internal ledger. The focus will be primarily on identifying any such discrepancy between the reported records and the actual transactions.
By now, you must realize that in most internal fraud cases, suspects create duplicate or fake invoices to route payments to different accounts. You may also notice travel expense invoices with no substantial basis. These are common tactics, and investigators clearly understand how the fraud unfolds.
To support your case, investigators will present all relevant evidence in a proper legal format to strengthen your claim.
Can Investigators Find Evidence Through Digital and Communication Records?
Well, it is possible. Recently, digital evidence has played a pivotal role in internal fraud-related cases. As such, investigators review email communications and internal messaging platforms to verify facts related to unauthorized transactions. If one of your employees has indeed accessed systems that hold financial records through illicit means, this information then becomes part of the evidence record.
Investigators also look for any attempt made by any employee within your organization to delete or alter any such records. They may also review files with modified or restricted access, which can show a clear pattern of the fraud. Your investigator will assemble this evidence to prove your suspected employees’ intent.
Can an Investigation Safeguard your Organization from Legal Exposure?
You cannot confront an employee in your organization based on suspicion alone. Likewise, if you terminate an employee without adequate proof, it can expose your company to a defamation lawsuit. Therefore, you need a well-documented investigation report to protect your company from such lawsuits.
This also helps protect the company’s credibility with stakeholders like business partners and insurers. All you have to do is gather evidence that meets the required professional standards.
Will Mediation Make Any Sense After an Internal Fraud Investigation?
When you are done with the investigation, financial loss, and a long-term associate committed the offense for the first time, you have reasonable grounds the financial front, and the offense was carried out for the first time by a long-term associate, there is a reasonable ground to opt for a negotiated settlement. Perhaps severe pressure forced the employee to commit the fraud due to unforeseen circumstances. In such a situation, there is no reason to consider legal recourse. Instead, you can seek help from Keefe Private Investigations. We offer mediation services that help you and your employee settle once the facts are established. This might involve a structured repayment, or the employee can leave the organization by agreeing to terms that satisfy both parties.
However, mediation is only fruitful when you know what actually happened. With proper evidence to back your assumption, you can then negotiate from a position of strength.
How to Prevent Internal Fraud in the Future?
If you think catching internal fraud was the real goal, you’re wrong. Once the investigation is done and dusted, you need to find the weak links and close them. On that front, you must start by separating employees’ roles. In matters related to financial transactions, you must never assign the job to a single individual. You need a mechanism in place to share responsibilities across different levels.
From now on, make it a point to conduct regular audits and informal checks to prevent fraud in the first place. You can also update your reporting policy to encourage employees to flag suspicious or out-of-place transactions.
What Should You Expect from an Investigator to Handle Internal Fraud?
If you are finding it tough to make inroads with an internal fraud investigation, you need help from the right experts. So, hire investigators with experience handling financial or workplace fraud cases. Discuss how they will approach the case and the particular time frame they will need. Also ask clearly whether they have testified in court proceedings related to similar cases in the past.
Confidentiality is also a concern, since it involves your organization’s reputation. Any leak related to an active fraud investigation through the organization will also compel the offenders to take evasive action and destroy the evidence. But when you hire the services of a professional investigation agency like Keefe Private Investigations, there is no reason to worry. We will protect the integrity of the investigation by any means necessary.
What Makes Keefe Private Investigations the Ideal Choice?
Keefe Private Investigations has worked with businesses across Oklahoma and helped them uncover such frauds in the past. We are here to help when things get out of hand, and you have run out of options. Our team of investigators will work tirelessly to help you collect evidence that can withstand intense scrutiny by the opposing counsel. Our investigative services in Oklahoma City are detailed and comprehensive. That evidence can shed new light on the extent of the fraud your organization endured.
We handle every case assigned to the team with care and discretion. Our main objective is to assist your business when it matters the most. If you suspect fraud, don’t wait for it to happen again. Feel free to reach out to us here or call us at 405-435-8355. We will then see how our private investigator can help protect your organization from this kind of fraud.
