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Detecting Embezzlement and Employee Fraud

Employee theft is a more common crime than you might believe. ‘But I have such a little business, nothing of the kind could happen to me!’ you may be thinking. Unfortunately, that is not the case. Employee theft occurs in some form or another, according to research, regardless of the size of the firm or the industry. According to statistics, $50 billion is stolen annually from firms in the United States by their employees. Here are some reasons why you should use a private investigator to detect embezzlement and employee fraud.

Why Do Businesses Hire Private Investigators?

After putting in so much time and effort to build your dream business from the ground up, you would want security so that no one could interrupt the fruits of your labour. As a result, learning that an employee is stealing your hard-earned money can be quite frustrating.

Most business owners do not believe that employing an experienced private investigator is necessary for their company’s safety. However, there are numerous benefits to hiring a private investigator as opposed to internal departments and personnel.

If an employee steals from you, local police officers may be able to assist you. However, if you hire a private investigator ahead of time, you may be able to discover unforeseen problems and perhaps avoid employee theft. PIs can undertake digital forensics and use surveillance footage to sniff out any employee fraud or embezzlement activity. 

Rather than requesting police assistance, businesses can save time and money by engaging a private detective. Undercover operations planned interviews, and specialised surveillance techniques can all be utilised as objective evidence of a crime and will be accepted in court

Detecting Theft and the Role of Private Investigators

There are a few procedures that business owners may do to help identify and avoid further theft-related damage. Here are a few red flags to look out for that may suggest the need for further investigation:

Employees Who Prefer To Work Alone: There’s nothing wrong with an introverted individual who wants to work alone. If a worker is being untrustworthy, he or she may try to avoid management and perhaps other employees. 

An Employee Who Refuses To Take Time Off: Let’s face it, everyone needs time off now and then, and most people look forward to it. Those involved in fraudulent operations, on the other hand, may avoid taking vacation time out of worry that their illicit activities may be discovered during their absence.

Employees that live over their means: When one of your employees begins to arrive at work with a range of luxurious stuff, such as an expensive suit, jewellery, or a brand new high-end automobile, it could be a hint of something nefarious, especially if the purchases considerably surpass their pay grade.

Physical Items Are Missing: Of course, this is the most powerful indicator. Employees that steal may go after petty cash, checks, items, or even office supplies. Keep an eye out for anything strange and make a note of it.

Prevention Methods Used By Private Investigators

Private investigators can assist in preventing fraud in a variety of ways. Among these techniques are:

Boost Internal Controls

A private investigator can penetrate a system to discover how simple it would be to perpetuate business fraud. This enables him or her to see the present internal controls in place and re-calibrate them to better protect the organisation. Increased internal controls can protect a company against liability and damage caused by mistakes or fraud. Additionally, private investigators may advise reviewing invoices and payments regularly to detect fraudulent activities.


Surveillance of a particular target or of an employee who may be filing a false claim is one of the key ways that a person can help prevent fraud. Depending on the investigation and state rules regarding surveillance or recording, this may entail audio or video surveillance.  Similar procedures may be used in workers’ compensation cases to determine whether the employee was truly injured in the manner stated. A surveillance record could reveal that the worker exaggerated the injuries.


Private investigators may research to assist in determining the likelihood of fraud. He or she might look over computer files, audio files, electronic files, and other documents. This enables a private investigator to see suspicious activities, identify difficulties with internal controls, and monitor behaviour.

Hold Interviews

Interviews may also be conducted by private investigators. They may create specialised questionnaires to ask employees questions that will be used as evidence in a civil action. To discover fraudulent conduct, they may interrogate other employees, neighbours, superiors, or pals.

You can see more types of investigations here. If you would like to learn more or talk about how a private investigator could help your business, please get in touch today.

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