Embezzlement and Employee Theft Can Cost You

Working in a business as dynamic as retail, it is essential that we remain flexible in our methods and progressive in our approach to problems like embezzlement and employee theft. As the business moves forward, change comes quickly, and our skills and abilities must evolve to meet the needs and expectations of a new professional standard.

But true growth must be built on a solid foundation. Especially when we consider the pace of change, we find that success is largely based on the refinement of the fundamental principles that anchor our skills and our decision making. By expanding on our foundation of knowledge, we give ourselves a stronger and more stable base to build upon. We reinforce our futures by broadening our opportunities.

Embezzlement is a type of theft involving a person or persons entrusted to property owned by someone else (such as an employee) who then uses fraudulent means to illegally misappropriate the property or cash entrusted to them. Embezzlement is a breach of the fiduciary responsibilities placed upon a person. When it comes to this type of employee fraud, the assets are originally under the control of the person lawfully, but the person then uses the assets for unintended purposes.

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For example, a cash office manager would be authorized to have control over cash in the cash office for business purposes and management. However, if the cash office manager took possession of cash and illegally removed it from the cash office for their personal use, this would constitute a form of embezzlement. If an attorney has control of an individual’s assets in order to manage their financial affairs, but misappropriates some or all of their client’s money into the attorney’s personal bank account, this would constitute embezzlement.

Elements common to embezzlement would include:

  • The assets must belong to someone other than the accused (such as an employer)
  •  The assets must be converted to the perpetrator subsequent to their lawful possession of it. In other words, the property was originally under their lawful control, and they then illegally took or used the asset without the consent of the owner.
  • The perpetrator must be in a position of trust, with the property held by him or her pursuant to a particular fiduciary duty.
  • The perpetrator must have the intent to defraud the owner at the time of conversion.

Simply stated, embezzlement involves a breach of trust. The nature of embezzlement can be both minor in nature (For example, an employee stealing a few dollars from the cash register), or involve immense sums of money and sophisticated schemes (For example, when the executives of a large company falsely expense millions of dollars, transferring the funds into personal accounts)

More often than not, embezzlement is a type of employee theft performed in a manner that is premeditated, systematic and/or methodical, with the explicit intent to conceal the activities from other individuals, usually because it is being done without their knowledge or consent.

By capitalizing on opportunities to enhance our knowledge and education, we are making an investment in our own future. To learn more about developing your leadership skills and the certification process, visit losspreventionfoundation.org.

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