When headlines blast that someone has been caught embezzling money from their employer, many think that it is an anomaly in the business world. The truth is that while it should be something that doesn’t happen at all, it’s actually more common than people realize. Of all businesses, small companies are at the highest risk.

In a 2022 survey conducted by the Association of Certified Fraud Examiners (ACFE), it was found that an average organization loses over 5% of its yearly revenues to fraud. This is more than twice the global median rate of 2%. Somewhat surprisingly, businesses with less than 100 employees on staff were the most likely to be affected, accounting for over 30% of all reported cases.

So, what can be done about this problem? One of the most effective methods is to hire a private investigation agency with trained and experienced corporate investigators. Corporate investigators are specialized professionals who have the skills and knowledge necessary to uncover fraudulent activity in the workplace. They use investigative techniques such as surveillance, interviews, and research to detect any potential illegal activities or unethical behavior.

 

What is a corporate investigation?

A corporate investigation is a thorough examination of a company, organization, or business that is conducted with the purpose of uncovering any unlawful activities carried out by internal staff members or outside parties. This type of investigation can be highly effective in protecting the company’s interests and maintaining an efficient workflow for its operations.

A thorough corporate investigation can uncover violations of the law or any other type of misconduct. The investigator must be knowledgeable in laws and regulations related to the organization and its operations. The investigator also needs to understand the workings of the internal control system within the corporation and how it is designed so that any fraudulent activities will not be overlooked.

 

Types of Corporate Investigations

 Employee theft Investigations

Employee theft is a serious issue within any company that can cause significant financial loss and damage to the organization. It doesn’t matter whether it is a small or large item that was stolen, the effects can be devastating. Employee theft may involve higher-level staff such as managers or supervisors, or even members of the same team working together to defraud the organization. It can involve stealing large amounts of cash, equipment, or even the intellectual property or trade secrets of a company.

To prevent and identify such employee theft, organizations need to take steps to ensure their security measures are up-to-date and effective. Installing CCTV or other types of surveillance cameras is one common method to record any abnormal activity. All suspicious activity should be reported immediately and organizations can enlist the help of a corporate private investigator to uncover the truth. Corporate private investigators are experienced in surveillance and interviewing, so they can track down the responsible parties even when there is no security video evidence.

Organizations should also have strong policies in place regarding employee theft and ensure that all staff members are aware of them. Suspicious activity should be reported immediately in order to take the necessary steps for prevention and investigation. Furthermore, organizations should ensure that their security measures are up-to-date and effective to prevent employee theft from occurring in the first place.

Lastly, staff members need to be regularly reminded of the consequences of employee theft so they understand just how serious the issue is. Ongoing education and training is always recommended.

It is important for all organizations to be aware of the risks associated with employee theft and take active steps to prevent and identify any suspicious activity. Enlisting the help of a corporate investigator as well as having a strong security system in place are essential to combating employee theft and protecting an organization from financial loss or damage.

 

Sexual Harassment Investigations

Another reason for an organization to hire a private investigator is to root out sexual harassment. According to the US Equal Employment Opportunity Commission:

“It is unlawful to harass a person (an applicant or employee) because of that person’s sex. Harassment can include “sexual harassment” or unwelcome sexual advances, requests for sexual favors, and other verbal or physical harassment of a sexual nature.

Harassment does not have to be of a sexual nature, however, and can include offensive remarks about a person’s sex. For example, it is illegal to harass a woman by making offensive comments about women in general.

Both victim and the harasser can be either a woman or a man, and the victim and harasser can be the same sex. Although the law doesn’t prohibit simple teasing, offhand comments, or isolated incidents that are not very serious, harassment is illegal when it is so frequent or severe that it creates a hostile or offensive work environment or when it results in an adverse employment decision (such as the victim being fired or demoted). The harasser can be the victim’s supervisor, a supervisor in another area, a co-worker, or someone who is not an employee of the employer, such as a client or customer.”

According to the National Sexual Violence Resource Center, over 60% of women say they experience sexual harassment in the workplace. Most of the sexual harassment is inflicted from above: superiors and supervisors tend to harass their subordinates. This is most often done by requesting sexual actions subtly or making sexual comments towards the employee. This often escalates to sexually suggestive behavior, or full-blown unwelcome advances. Although many companies now have sexual harassment policies, unfortunately, they are seldomly implemented and frequently sexual harassment continues unchecked.

Sexual harassment at the workplace is still all too common, with more than 85% of victims choosing to stay silent and not report it. This can be incredibly detrimental to an employee’s attitude towards work, leading them to experience a decrease in their productivity level, distractions and in worst cases, complete neglect of their duties or even a resignation from the organization.

In cases like these, a private investigator can be instrumental in identifying the cause of such issues and putting an end to any inappropriate behavior within the workplace. Through thorough investigations, they can find evidence that will help protect victims of sexual harassment from further mistreatment while also ensuring a safe and comfortable atmosphere for everyone in the workplace.

 

Fraudulent Activity Investigations

Fraudulent activities can have a dramatic and devastating impact on businesses, corporate organizations, and other entities. Fraud has the potential to cause irrevocable damage to an organization’s reputation, bottom line, and ultimately, its success. There are numerous types of fraud activity that may be perpetrated against an organization. Some of the more common may include:

 

  1. Misappropriation of Assets

    Misappropriation of assets is a serious form of financial crime that involves manipulating, falsifying, and/or stealing company funds or resources. It can include activities such as altering financial statements to reflect inaccurate profit and loss figures, forging signatures on cheques, inflating expenses incurred to the company, and fabricating receipts. These fraudulent activities can result in significant financial losses for the company and can lead to criminal charges for the individual or group responsible. Additionally, it can have a negative effect on the reputation of the business and create distrust among stakeholders. It is important that businesses take steps to identify potential misappropriation of assets and develop policies and procedures to prevent it from occurring.

 

  1. Vendor Fraud

    Vendor fraud is an insidious and unfortunately common form of fraudulent activity that is perpetrated by an employee within a company against the organization. The main method used to execute this sort of crime involves abusing arrangements with vendors utilized by the enterprise. This could take many forms, such as the individual in question calling upon a vendor to drastically overcharge for shipping. Another common example is when a business owner allows another person to use their credit card, which the employee then uses to purchase items for themselves as well as services, such as airfare, hotels, and more. They might also offer kickbacks or bribes to vendors in exchange for services that are not being provided by the organization.

 

  1. Accounting Fraud

    Accounting fraud is a serious issue that often involves the active participation of an employee or accountant. It can take many forms, such as when staff set up a fake supplier and charge the company for nonexistent goods and services. Another way is when an employee conspires with a supplier to bill the company for considerably more than what was provided. organizations need to be aware of the risks and implications associated with accounting fraud. Internal audit teams should continuously monitor the organization’s financial system for any irregularities or discrepancies. They should also review past transactions for any suspicious activity and take prompt action if anything is found. Additionally, companies should put in place measures which ensure that all payments are regularly reviewed and approved by a designated and trusted staff member. By doing this, companies can ensure that accounting fraud is identified and addressed as soon as possible.

 

How a private investigator trained in corporate investigations can help your business

Private investigators serve as an independent set of eyes that can not only detect corporate fraud and malfeasance, but also help to prevent it from occurring in the first place. These investigators can carry out a wide range of activities to uncover any wrongdoing – including background investigations of suspected staff members, thorough research and financial investigations aimed at detecting embezzlements, bribery, account manipulations, and so on.

Some private investigators specialize in undercover work, which is when the private investigator is given fake or “cover” employment as a staff member to blend in and discover illegal activities. An undercover investigator placed in the right area can provide a treasure trove of information for a company regarding their employees and contractors.

When it comes to corporate investigations, investigators serve as trusted advisors that can provide invaluable insight into an organization’s operations. They possess the necessary skills and private investigators specializing in corporate investigations can also assist with due diligence investigations, which are important to conduct before a company is acquired, purchased, or goes through a merger. These types of investigations help to ensure the secondary company or new business owner is not going into business with a company that may actually be a liability.

The importance of a corporate investigator to a corporation cannot be overemphasized as an expert private investigator aids in both precautionary measures and in the ability to weed out bad actors. For a free consultation and case review, please do not hesitate to contact us. Your business may very well depend on it.