Embezzlement: A Multi-Trillion Dollar Crime

post dateJune 28, 2017  •   post categoriesembezzlement, Embezzlement and Internal Fraud, Uncategorized  •   post comments number1 comment

The world has always had a goodly share of liars, cheats, thieves and embezzlers. However, acts of embezzlement by highly trusted employees have reached an all-time high. These ultimate betrayals of trust show no signs of reversal unless a dramatic change takes place throughout the business world. These crimes are happening to every kind of organization across the country! Even as you read this posting, an embezzler or other internal fraudster may be ripping off your organization. I mean right this minute! But how would you know? That is the question, is it not?

If you are being ripped off, it will not come as a huge surprise to authorities. It’s been estimated that U.S. businesses and other organizations lose in the neighborhood of five (5%) percent of revenues annually to internal fraud/embezzlement. On a global scale, this translates to losses of approximately $3.7 TRILLION DOLLARS a year to internal fraud and embezzlement. Organizations I’m aware of that have been victimized recently by internal fraudsters include banks, real estate businesses, religious and nonprofit groups, automotive and truck manufacturers, wholesale and retail operations, scouting organizations, kids’ sports leagues, law and accounting offices, beauty salons, childcare facilities, government and law enforcement agencies, schools and universities, and medical, dental and healthcare facilities.

To help make my point as to the severity of the crime of embezzlement, here are brief highlights of seven (two in same case) embezzlers who were processed through the criminal court system during this month alone.

Texas: Two senior executives entered guilty pleas to embezzlement of $1,325,306.92 from their employer over a four-year period.

New Mexico: The former owner of an escrow services business sentenced to 12 years in prison for embezzling more than $800,000 from twelve clients.

California: The owner of an accounting, tax and bookkeeping service pled guilty to federal charges of embezzling more than $1.5 million from several clients.

Missouri:  Accountant pled guilty in federal court for two embezzlement schemes totaling more than $3 million over the past six years.

Minnesota: With his accounting employee on vacation, the company’s owner made a shocking discovery of embezzlement. The employee pled guilty to theft of $1.2 million over twenty years.

California: The headlines read,Financial predator’ who stole millions from business partners and two widows sentenced to 5 years.  This embezzler stole more than $6.9 million.

Knowledge Is Power

Each of the above cases could have been easily prevented or detected, had management known what specific actions to take.  Remember, you can control internal fraud and embezzlement within your own organization – far better than it has been controlled in the past. Here’s how: In a series of upcoming posts, I will show you not only how and where in the business process these devastating crimes occur, but also how business owners, managers or other concerned individuals can significantly reduce their  risks.

Goal

My goal in writing these posts is to help businesses everywhere reduce their risk to embezzlement and internal fraud. As for my expertise in dealing with this critical area, I should briefly mention that I have interviewed hundreds of internal and external thieves—including corporate executives and organized-crime professionals—to learn from them. In addition to those interviews, I have spent close to half-a-century within a variety of organizations analyzing their practices and procedures to help identify which methods are most vulnerable to these crimes. To sum up my level of expertise: I know what works and what doesn’t. (My complete bio can be found on this website.) I am looking forward to having you join me on my next post. Please let me know your thoughts.

Jack L. Hayes