Transcript Call The Police!

Call The Police!
Vickie L. Mickey, CT,CLHRP
White Collar Crime
• Edwin Sutherland coined this phrase in the
late 1930’s.
• Usually non-violent crimes
• Commercial crimes that result in financial
gain for criminal
• Monetary sums involved quite large
• Crime extends over time
• Crime often diffused with legitimate
behavior.
Some Types of White Collar Crime
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Credit card fraud
Telemarketing fraud
Mail fraud
Income tax fraud
Healthcare fraud
Trade secret theft
Anti-trust violations
Bankruptcy fraud
Embezzlement
Federal Bureaus Report:
FBI report $300 billion annual cost to U.S.
for white-collar crime
Federal Sentencing Commission
reports:
1. Sentencing usually light
2. Usually fines of $5,000 or less
3. Jail time or prison time almost
nonexistent
Fraud Statistics
• 75% of inventory loss is due to employee
theft
• 5-6% of gross revenue is lost to fraud
yearly
• 15% rate increase in employee theft yearly
• 30% of employees steal from employer
• 74% of internal theft is never detected
Profile of White Color Criminal
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Most are college educated
Typically 1st time offenders
Men commit 70% of all offenses
Women in 40’s with children at home
Profile of Perfect Employee
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Never takes a day off work!
Never sick!
Never takes a vacation unless you do!
Loyal to the core!
Does not delegate work well!
Oh, so loyal! Been with the employer 1015 years
Employee Background Check
• Financially all employees must be sound
• Check credit bureau report
• Major companies will not hire an employee
with bad debt
• Other detrimental information on history
• Conduct aptitude testing - some will
identify propensity of someone to defraud
the company
Watch For Major Changes In
Employee Behavior
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Beware of employees relationships
Spouse loss of job
Making major purchases
Drug or substance abuse
Greed
Employee will defuse behavior with other
concerns
Three types of Employee Bonds
• Name Schedule Fidelity Bond
• Blanket Position Bond
• Primary commercial Blanket Bond
Name Schedule Fidelity Bond
A. You designate amount of coverage
B. You list employees to be covered
C. Must add new employees
D. Collection hinges on absolute proof of
employee theft.
Blanket Position Bond
• A. Specify coverage for position rather
than individual.
• B. Coverage is offered for each employee
up to a maximum set in policy
• C. New employees added automatically
• D. Does not require proof or the individual
responsible for the theft
Primary Commercial Blanket Bond
• A. Covers each employee in company
• B. Treats all employees as one unit
• C. It doesn’t matter if one or five
employees were involved in the crime, you
are able to claim same amount
Bond Employee
• The bond is an insurance contract that
guarantees employer payment in the event
of financial loss.
• Bond from the onset of employment
• Usually employees with prior conviction
cannot be bonded.
Business Insurance Coverage
• Check your policy as to extent of coverage
• Policies often have limitations on time
frame of discovery of theft
• State laws may require different coverage
than policy offers
• Most business insurance companies can
offer bond coverage
Delegation of RESPONSIBLITES
1.Checks & balances
2.Daily report to CEO
3.Monthly Report to CEO
4.Review all monthly bank statements
5.Review all charge statements
6.Accounting firm audit - Unplanned
7.Signatures on checking accounts
8.Install trust & protection
WATCH YOUR BOTTOM LINE
1.When your business is not making a profit
start looking for the cause of the loss!!
2.Never be too busy to watch your numbers
3. Keep only one set of books
So It Happen - Check List
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Call the Police!
Call the Insurance Company
Call your attorney
Written statements from employees
Wait - Processing
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Wheels of justice move very slow:
Keep in touch with detective – follow up
with phone calls
Many first time offenders get off with
probation
Don’t expect to recoup your loss
Civil suits can be filed; may not result in
recovery of loss
White Collar Crime
• Until recently most of the white collar
crime was pushed under the rug
• Ohio within the last 5 years has taken it
more seriously