I must admit, I used to be quite naïve. While I was fascinated with newspaper stories and movies of how crooks stole money, those stories always felt like fiction because they happened to someone else. After all, I thought, I only work with law-abiding citizens with solid sets of ethical principles – no one I know would ever steal money or product from their employer. Right?
Wrong. Along came our very own John Robie – an unethical colleague who saw no problem in stealing from us. I’ll tell you more about our Robie case in a few moments. (By the way, Robie was Cary Grant’s character name in the movie To Catch a Thief.)
If you have ever wondered how you could handle a potential theft in your workplace, I encourage you to attend an upcoming Spectrum Consulting webinar I will be leading called Stealing at Work – Investigation Strategies. This webinar, which will include two or three real examples, will be held on March 14, 2018 from 9 a.m. – 10 a.m. and has HR and SHRM credits available.
How We Caught a Thief. Several years ago we had a senior manager, who I will call John, who convinced the founder of our Company that having a company Sam’s Club charge account would allow him to save our Company lots of money on office expenses. He then arranged to have the Company’s small accounting department pay the Sam’s Club bill each month and charge the whole bill to “office expense” in his profit center. Since he was operating a profitable market at the time, no one really studied the content of his expenses. Life was good.
But then John’s life became not so good. We decided to split John’s market into two business units because our service lines were beginning to diverge. So we promoted a young woman, who had been reporting to John, into a new Branch Manager position. She would now report to another person and would be responsible for her profitability.
The new Branch Manager started to ask John questions about expenses, especially the office expenses, which she thought were too high. At one point John said to her, “You don’t need to worry about those charges they are monthly charges that you will see and it’s just a part of the expenses for the office.”
The new manager was (and still is) very bright and did not believe John’s various explanations. She then told her new supervisor that she did not trust John and that it was likely John was using the Sam’s Club account to make personal purchases and that we might want to investigate the account more deeply.
We did investigate and a little later I will share with you what happened. But first a few words about the investigative process.
The Investigation and Interview. Once the senior manager was tipped-off we immediately designed and followed an investigative process that we still use today internally and in our consulting with outside companies. Here are the seven steps:
- Develop a plan for how you will investigate. The plan would include gathering physical evidence as well as which people you want to interview. The plan also includes who will do certain portions of the investigation and who should be present during interviews.
- Gather physical evidence. This may include credit card statements, video camera footage, etc. The gathering assignments are usually assigned to one person or another.
- Analyze physical evidence. Once evidence is collected two or more people should review the evidence and decide what the evidence suggests, what additional evidence is needed, and who should be interviewed.
- Witness interviews. In some cases, like this case involving John, third parties have information that helps investigators get a more complete picture of what happened. I suggest you prepare questions in advance of the interviews that help you confirm facts. Always have at least two investigators participate in these interviews.
- Analyze information from witness interviews. During this analysis determine what facts you confirmed, what additional evidence you might want to gather, and determine if there are any new witnesses whom you should interview.
- Prepare for suspect interview. The interview with the suspect is very, very important so it should be planned very well. Planning should include drafting and ordering the specific questions you want to ask and then how you will ask follow-up questions. There should be at least two investigators present during this interview. Depending on the situation, I usually suggest only one person ask the questions. Finally, you should plan in advance what your actions will be if the suspect either confesses or denies allegations; what will you do next?
- Final action. Depending on the results of the suspect interview, you will need to follow-up with whatever you planned before the interview. Because each case is different I have not tried to address the many possible outcomes in this article.
What Happened in the John Case? After we learned from the new Branch Manager about her suspicions about John’s Sam’s Club account abuses, we followed the above process. After we obtained about a year’s worth of detailed statements from Sam’s Club we analyzed them. We discovered John indeed made many personal purchases including groceries, electronic equipment, and even living room furniture. We planned and executed his Suspect Interview very carefully. By the end of that interview John confessed to misusing the Sam’s Club account for personal gain. We terminated him at the end of this interview and we were able to recoup a portion of the money he stole from our Company. We chose not to prosecute John.
A Word about Control Systems. Theft most often happens when need, opportunity, and justification meet. Need might be that a person has a shortage of cash to purchase what they want personally. Opportunity is the mechanism by which they can take cash and, hopefully, do so without detection. In John’s case this was his carefully designed Sam’s Club arrangement. And justification is how the thief mentally accepts and lives with the act. Examples of justification could be, “Look at all the profit I bring in, the Company won’t miss this little amount; they don’t pay me what I’m worth; they don’t appreciate me; or the owners make piles of money and they should give me more.”
When you think about need, opportunity, and justification the only one of these three that organizations can really influence is opportunity. And the best way to minimize opportunity is to increase the quality of your control systems. In our John example a stronger control system would have required that some other approving authority (i.e. supervisor, accounting manager) look at each item on the Sam’s Club bill to verify that the amount charged as office expense was legitimate.
As I mentioned earlier if you need to catch a thief or want to learn more please attend our upcoming Spectrum Consulting webinar called Stealing at Work – Investigation Strategies. This webinar, which will include two or three real examples, will be held on March 14, 2018 from 9 a.m. – 10 a.m. and has HR and SHRM credits available.
I often say that good control systems protect people from the darker side of oneself – or sometimes help a Company catch a thief.