When trusted employees steal

May 20, 2013 | By Neil Ducoff | 5 Comments

theft_000016530240XSmallA coaching client just informed us of their discovery that a trusted employee has been stealing from the company by manipulating and creating false transactions in the company’s business software. Luckily, another employee saw something questionable and informed the owners. After hours of examining and comparing transaction logs, it was clear who the culprit was, how it was done, and for how long it’s been happening. Damn…isn’t running a business difficult enough without having your own employees stealing from you – especially one from your trusted inner circle?

The owners were shocked and devastated to discover just how extensive their trust was violated by this key employee. To learn that thousands of dollars had been siphoned out of much needed cash flow is one thing, but to learn that someone you trusted intentionally stole from the company right under your nose is where the real and lasting damage is done.

Here are some no-compromise strategies to help you and the rest of your company through the aftermath of discovering that an employee has been stealing:

  • Stealing is stealing: It’s not just taking money that qualifies as stealing. It doesn’t matter if it’s a box of pencils, paperclips, supplies, or products…taking something that doesn’t belong to you is stealing. Padding an expense account is stealing. Sleeping while on the clock is stealing. Just because it doesn’t “feel” like stealing to the employee doesn’t mean that it isn’t – stealing comes in many forms, and happens when greed and entitlement thinking overtake good judgment, ethics, and values. No compromise.
  • Due diligence: It doesn’t matter how indisputable your evidence is, the first call you make should be to your attorney for guidance on how to handle the matter before confronting the individual with accusations of being a thief. Jumping in without proper legal oversight could potentially backfire on you with a defamation lawsuit, so it’s best to play it safe. Your next call should be to the police to report the alleged crime. The police will also guide you on what you should and shouldn’t do. The most important thing to do is document anything and everything related to the case.
  • Fire and recovery: Before confronting the offender, you must decide on what you want the outcome to be. Unfortunately, you really don’t have many options. If your proof is questionable, you need to present your evidence and demand explanation. Note: Do not get sucked in by a sob story. If you reject the explanation, the employee must resign or be fired. If the proof is indisputable, the employee needs to resign or be fired. The offer to submit his/her resignation should be attached to the full recovery of what was stolen. Firing means pressing charges and recovery through legal means. Remember, every decision you make sets a precedent for if (or, unfortunately, when) you encounter this type of situation again.
  • Confronting the offender: It is extremely important to contain your emotions and filter everything you say to avoid repercussions. This should be a formal meeting with a witness present to monitor what is said. Based on discussions with your attorney and the police, you may consider having one or both present. Nothing communicates the seriousness of the situation than having your attorney and police officers present. In fact, it may be best to turn the conversation over to them. That puts more stress on the offender and less on you. The meeting ends with the employee admitting to the offense by resigning or being fired.  Let the police handle it from there.
  • Damage control: The ick from these situations doesn’t just get all over you – it gets all over everyone in the company. Word will spread like wildfire; therefore it’s essential that you brief staff as quickly as possible. It’s best to present a sanitized version of what happened. It’s important to take the high road and not demean the offender. Terms like “stealing” should be replaced with terms like “questionable transactions.” Employees are pretty savvy and will figure out what you mean. Prepare talking points to guide employees through conversations with customers, vendors, and others. The important thing is to contain the drama and for the company to move on. The impact should be controlled and the situation rectified properly – you simply had an employee who risked his or her job and reputation by stealing.  Now they are suffering the consequences.  Case closed.
  • Learn from the lesson: There are more ways to steal from a company than you can imagine. Therefore, the best offense is a good defense. Rethink and rebuild your systems and procedures to plug the holes. It’s a shame that tactics like security cameras need to exist in the workplace, but they serve a purpose. They protect the innocent just as much as they prevent temptation.
  • Continue to trust: The actions of one individual should never tarnish your belief in others. There are many employees that deeply care about your company and its values. Distrusting everyone will eventually cause distrust to embed itself in your culture. No-compromise leaders nurture cultures of high trust by practicing smart trust that comes from well-designed systems and procedures.

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Categories: Leadership , Monday Morning Wake-Up , No-Compromise Leadership , Staff Retention

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  1. Very well said, that is a situation anyone can be in it! l agree with all you explain except at the meeting with the employees you mention not to say Stealing, perhaps l think we allways has to have white gloves with people that deserve to be told what actually they are thiefs! the good person always has to be so careful like if they were the ones in trouble. is sad thet individuals that done wrong you has to sugar coat the their actions. well that is my point of view, perhaps am wrong but l do not think so!

    1. Hi Norma,
      When it comes to stealing, I agree with you that you cannot “candy coat” the conversation. However, keeping a cool head and choosing your words carefully is always the best approach. Every situation is different. The last thing you want is the “thief” coming back at you with a law suit. You just want to get your money back (if at all possible) and go away.

  2. I had an employee theft case where my front desk girl took over $30K in a 2-3 year period. Never underestimate the creativity of a criminal mind. The State’s Atty. who represented our case said “Rational minds cannot think like those who are irrational”. The personal guilt of “how could I have not seen it?” overwhelmed me at times. My trust levels of those who came after her were tested.

    What came of it is that I put process after process into place and found a point of sale software that helped me better track where the money was coming from. For a long time, I took the reports home and pined over each one….searching and distrusting. It added a full head of gray to my head over the 9 years it took to prosecute her, only for her to walk into the court room after all of the delays, to admit guilt.

    My other key staff member payed dearly in my continual cross-examining of her practices and questioning of the reports. Luckily, she endured. I can now say that I am finally letting go. I have given her access to my Quickbooks and am allowing her to pay bills for me. It has added almost a whole day to my schedule and has freed me to lead my team. If only I had done that sooner. It is a betrayal that is difficult to forget, but makes you a smarter and stronger leader in the end.

    1. Hi Sandy,
      Thank for taking the time to post your story and share your insights and lessons. Dealing with stealing and the resulting distrust is devastating.
      Thank you,

    2. What if this person called you on a Holiday when you were out of town and cried for an hour telling you she could not ever guess how much she had taken from you. I need this person. I have employed her for 30 years. She has started Gambling after her divorce. I have caught her twice since then.


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