The business world can be extremely cut-throat and competitive.
You should be careful who you do business with.
Wouldn’t you want to know if a business partner is stealing from you? What can you do?
It is not uncommon for business partners to use their position of trust to hurt your business for personal gain.
Many times they take advantage of their fiduciary relationship or expand the scope of the relationship in order to personally profit.
Different Types of Fraud
Fraud happens more often than people think. People within your organization
Here are a few of the most common types of business fraud.
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Fraud and Embezzlement
A common white-collar crime, embezzlement is when an entity or person misuses the assets entrusted to him or her. Typically, the embezzler has the right to have these assets, but they do not use them for they were originally intended for.
Stolen Intellectual Property
When property or trade secret belongs to the business which is protected by intellectual property laws, and someone knowingly takes or otherwise steals the property.
Identity Theft
Acquiring someone’s private identifying information, like social security number, typically for financial gain.
Payroll Fraud
It can be easily defined as an employee cheating a business’s payroll system to receive the money they did not earn.
Cash Larceny
Cash larceny is when cash is stolen that has already been recorded. This type of fraud is committed by an employee with the consent of the employer.
Expense Reimbursement
The ACFE defines expense reimbursement when an employee fraudulently makes a claim for reimbursement of inflated or fake business expenses.
It is common for companies to self-report business expenses for reimbursement. If the organization does not have the proper controls in place, it opens the door to the possibility that an employee could defraud your organization.
This type of fraud not only has an immediate financial impact, but it also gets recorded on your company’s statements, which can cause problems in the future.
Workers Compensation Fraud
It is not unheard of for employees or even a business partner taking money from a company by committing workers’ compensation fraud.
Dishonest and manipulative people will use worker compensation to their advantage.
They may even go as far as to produce doctored paperwork stating they are unable to perform their job duties for a certain amount of time, making it look like they are entitled to workers’ compensation as a result.
Often, hiring a PI to investigate the case exposes an individual as a liar and a fraud.
When this happens, the guilty party has no choice but to retract its worker’s compensation claim.
Fraud Detection
A common fraud that is seen within business deals specifically with procurement. With minimal oversight, a business partner can quickly profit. With reason to believe that a business partner is stealing by committing procurement fraud, calling in a PI is the first step to getting some answers. They can investigate to determine whether one’s business partner may have committed fraud.
Investigating fraud inside of an organization varies in difficulty. Many times business partner theft can easily be detected through forensic accounting.
There are cases where individuals are very creative and aware of what they need to do to conceal their fraud.
Working with an investigator will give you access to tools not typically available to normal citizens.
Besides tools, investigators have the experience and network of professionals to perform a thorough analysis.
Asset Discovery
A PI should also be called in when a business partner is putting the company’s assets at risk.
They have ways to determine if a partner is stealing cash from a business. Since stolen cash is the most common type of asset fraud, most PIs have experience dealing with it.
In some cases, asset fraud can involve either intellectual data, company property, money, or all the above.
Though some cases of asset theft are isolated others are much more widespread. The best PIs can handle either type of situation.
A business’s cash flow is something that must be closely monitored always.
An interruption of this cash flow is often the result of a dishonest business partner thinking they can trick their other partners into a false sense of security.
Asset discovery is a sure way to determine if an individual is taking money from a company.
With basic information, you will be able to determine if your business partner is stealing.
What to do if your business partner is stealing?
If you suspect your partner is stealing or has stolen from you, you need to follow these steps to ensure that your organization and your bottom line.
Gather Evidence
The moment you suspect foul play, you need to immediately gather evidence. Here are ideas of what information you can collect:
- Detailed receipts
- Bank statements
- Travel records
- Expense reports
- ATM withdrawals
- Video evidence
Determine the Type of Theft
Once you have collected evidence, you will have a better idea of the type of theft that has occurred. In this article, we explored the different types of fraud but we recommend you speak with a lawyer or a fraud specialist to clearly identify your case.
Make a Decision on Prosecution
Understanding the type of theft that has occurred will let you know what your next step should be. Did your partner commit a criminal and civil offense? Should you file criminal charges?
Working with a lawyer or possibly a litigation attorney to providing you legal advice.
Recovery
No matter if you file criminal or civil charges, you need to work to recover stolen money and/or assets. You might even be able to claim civil financial damages. Once again, we highly recommend that you work with a trusted attorney who can help you navigate this aspect of your case.
Discover if Your Business Partner is Stealing
Owning and operating a business is a tricky proposition. With so many areas under your watch, it can be challenging to know or detect if a business partner is stealing. It is crucial to know the signs so you can act fast.
When anyone suspects, a business partner is stealing money from their business, hiring a PI is an effective way to have them caught. Trying to investigate themselves can find minimal results while a PI has unprecedented access to everything they need to help prove guilt in a fraud case.
Business owners and management that hire a PI are grateful they have someone on their side. Without them, an individual could get away with their illicit activity. This happens far too often in the business world, which is why it is so important always to watch your back. Even when you think you have an honest business partner, it pays to be vigilant.
There are so many ways that a business partner can steal money. There are so many examples of the different ways in which theft occurs in the business world. Procurement and workers’ compensation fraud have plagued businesses for years.
Conclusion
No matter what type of business you own, it is essential to understand each of these types of fraud so that you can be on the lookout for them.
While most people do not fully understand workers’ compensation as well as procurement fraud.
Often people tend to think that it couldn’t happen to them. An effective PI can explain to you the differences between the types of fraud.
When you understand what constitutes each type, you will be better prepared to ensure that a business partner is not guilty of any of them.
Learn how a private investigator can help you discover if a business partner is stealing.
