White Collar Crime – Employee Theft and Remedies – David Denton

W. David Denton, Attorney Lawyer, Paducah, Kentucky W. David Denton
Denton Law Firm
555 Jefferson Street
Suite 301
Paducah, Kentucky 42001
(270) 450-8253

White Collar Crime Impact on Businesses and Employees: Employee Theft and Remedies

Part Three

Every year in the United States, employees steal $50 billion from their employers. According to the U.S. Chamber of Commerce, an alarming 75 percent of all workers interviewed admitted to stealing at least once from their employers.

More than 80 percent of employee thefts occur in businesses with fewer than 150 employees. Fifty percent occur in companies with fewer than 25 employees. The business owner may personally know the employees and trust them. By the time an employee is caught, he or she has been sealing from the employer for at least two years.

Embezzlement: The Most Common Type of Employee Theft

There are many types of employee fraud, but the most common theft crime in the business world is embezzlement. Employees often take pens, pencils, paper, staplers, etc., home from work. They joke about it even though it is a form of embezzlement; They are taking items entrusted to them by their employer and using them for their own benefit outside of the office. They think their employer won’t even notice.

When several employees steal small items, the loss adds up and can have a major financial impact on a small business. Embezzlement is different from other types of theft in that it involves a breach of trust. Embezzlers take property for their own use from someone who entrusted them with it.

Examples of acts embezzlers generally participate in include:

    • Charging more than the cost of a product and keeping the difference for themselves.
    • Depositing business checks into their own personal account.
    • Taking cash from a cash register.
    • Taking money from a customer’s account and moving it into their own.
    • Adding a fake employee to the payroll.
    • Taking bribes or kickbacks.
    • Padding their expense accounts.
    • Cheating on their time sheets.
    • Adjusting the accounting books to hide their misappropriation of funds.

Studies have found that embezzlers are generally otherwise law-abiding citizens. They begin their embezzling careers when they are in debt and only plan on borrowing money from employers whom the embezzlers believe have so many assets, they won’t miss a few dollars.

Embezzlers almost always think the loss will only be temporary because they will pay back the funds before the employer has a chance to notice anything amiss. But the embezzling continues as they take just a little more, then a little more…and on and on.
Their embezzling is often caught when the embezzler takes time off work for illness or vacation and another employee steps in to do their job. At first, it seems that errors are discovered. The “errors” then become noticeable as a pattern of activity that are not errors, but intentional conduct.

Civil Remedy for Embezzlement

Embezzlement is a crime. It can be either a misdemeanor or felony depending on how much money was misappropriated. Many employers would rather have the funds returned to them instead of seeing their employee in prison. The employer chooses not to report the employee for criminal prosecution, but to pursue a civil remedy by filing a lawsuit for the return of the funds.

The embezzler may be willing to enter into a settlement agreement with the employer. Together, with the help of legal counsel, they can put together a written plan for repayment. There are times when the employer may need the help of the embezzler to correct the books the embezzler falsified.

If you suspect an employee has embezzled funds or defrauded you in some other way, contact one of our attorneys at our Denton Law Firm. If you have not confronted the suspected employee, we strongly suggest you not do so until you talk to us. Together, we can plan how to prove the theft and determine what approach to take to have the funds restored to you. You must file your claim within a certain time after you discover the misconduct. If you miss the deadline, you will lose forever your right to pursue a remedy, so do not delay.

Read Part One:  White Collar Crime Impact on Businesses and Employees: An Overview of Workplace Theft:  

Read Part Two:  White Collar Crime Impact on Businesses and Employees: Employer Theft and Remedies

This article is designed to provide general information prepared by the professionals at Denton Law Firm in regard to the subject matter covered. It is provided with the understanding that the author is not engaged in rendering legal, accounting, or other professional service. Although prepared by professionals, these materials should not be utilized as a substitute for professional service in specific situations. If legal advice or other expert assistance is required, the service of a professional should be sought.