Embezzlement case help (Employee caught stealing)

[nacc]

HI need help regarding starting an embezzlement case against an employee who was caught stealing money from the company.
He was actually receiving funds from customers in his own account instead of company account. he would take money from the customers who were thinking paying into the company account but the money was going in his personal account. he robbed the company tens of thousands of pounds.
what are our options, shall we complaint in police or get our own lawyer and start the case etc

any help would be appreciated.

kind regards

 

[Newchodge]

Call the police you cannot easily take a prosecution yourself. Is he still employed?

 

[Mark T Jones]

The first thing you need to solid, forensic evidence - or a full confession.

These things are tougher to make stick than you might imagine.

has the employee come clean?

 

[Michael Loveridge]

From a purely practical point of view it's probably more important to try and recover the money than have him prosecuted. Do you know anything about his apparent financial position? Does he own his own house? The reason you need to know is so that you can assess the chances of recovery, and decide whether to throw money at lawyers.

As tens of thousands of pounds are involved it may be worth consulting lawyers about getting a freezing injunction. This is a court order that effectively freezes his bank accounts, so as to stop him emptying them and transferring the money out of the jurisdiction. You can obtain one within literally a couple of days, and you don't need to tell him that you've applied for it, so the first he will know is when he can't operate his bank account.

However, it's all about timing. If, as I assume he does, he knows that you're on to him, he may already have emptied his accounts so that an injunction would be a waste of time and (a lot of) money.

In any case, if he does own his house and there's equity in it you should be able to recover at least some of the money by, if necessary, forcing a sale of the house.

You need to consult a firm of good litigation solicitors as a matter of urgency.

 

[nacc]

From a purely practical point of view it's probably more important to try and recover the money than have him prosecuted. Do you know anything about his apparent financial position? Does he own his own house? The reason you need to know is so that you can assess the chances of recovery, and decide whether to throw money at lawyers.

As tens of thousands of pounds are involved it may be worth consulting lawyers about getting a freezing injunction. This is a court order that effectively freezes his bank accounts, so as to stop him emptying them and transferring the money out of the jurisdiction. You can obtain one within literally a couple of days, and you don't need to tell him that you've applied for it, so the first he will know is when he can't operate his bank account.

However, it's all about timing. If, as I assume he does, he knows that you're on to him, he may already have emptied his accounts so that an injunction would be a waste of time and (a lot of) money.

In any case, if he does own his house and there's equity in it you should be able to recover at least some of the money by, if necessary, forcing a sale of the house.

You need to consult a firm of good litigation solicitors as a matter of urgency.

HI yes he bought the new house and drive nice cars go on holidays etc. he has taken money in his personal accounts so he cannot hide it.

 

[IanSuth]

record everything, put it all in a single document, the invoices that the misappropriated payments relate to etc, it will make the Police/CPS's job easier and easier for you to demonstrate as near to exact level of your loss if you get a to a point of being able to recover it

 

[Frank the Insurance guy]

First I would report it to the police and let them deal with the criminal act - if he is charged than that is your evidence that he has stolen from the business and will make it so much easier for you to take legal action to recover the money.

You also need to start looking into quantifying the loss - I suggest a difficult conversation with your client asking for a copy of all invoices they have paid.

Has he done this with any other clients? - May be worth sending a general note to all client's to check their systems to ensure they have your correct bank details, ending in XXXX, and if not, to get in touch for confirmation of the correct account (you can then assess if there are other client's affected!)

 

[UKSBD]

Were the clients giving him cash which he was banking or did he give them his bank details to pay in to?

If the clients paid money in to the employees account, has the employee stolen money from the business or the clients?

Can the business still invoice the clients for the funds not received?

 

[WaveJumper]

As @Newchodge asked above is this person still employed and I would suggest you need to follow your disciplinary procedures to the letter as much as this may aggrieve you.

 

[Paul Norman]

It would be interesting to hear back what, if anything, has happened subsequently here.

Normal procedure would be to suspend whilst establishing the facts. Unless you have already established them, in which case this is gross misconduct and the person should be dismissed.

Personally, giving the scale of the crime, I would involve the police, too.


You cannot allow this person to remain employed. Not even for 5 more minutes. Assuming, as I said at the outset, you have reasonable certainty that they did the crime

 

[UKSBD]

Personally, giving the scale of the crime, I would involve the police, too.

May be the threat of involving the police would be a better way of getting the money back?

OP - Does he know you know yet?

If not, get all your evidence together 1st and tell him if he pays every penny back you won't inform the police. If he does pay you back it's up to you then whether you report him or not.

 

[nelioneil]

In addition to the advice above, it is wise to contact your insurers to advise of the situation.

 

[MOIC]

@nacc

What were your/his customer’s paying for?

Did you not see discrepancies in your inventory?

Did your accountant not pick this up?

An odd couple of thousand, I can understand getting lost in the system, but ‘tens of thousands’ enabling him to ‘buy a new house, drive nice cars and go on holidays’ seems a huge flaw in your financial control as well as your accountant.

Was anybody else complicit in this fraud?

I would get a detailed analysis of the running financials of your business and tighten those up, at the same time as trying to recover the funds from the employee you mention.

Could there be similar irregularities within your business you’re not aware of?

That would be my concern, as well as recovering ‘stolen’ money.

 

[Bob Morgan]

Sounds like a job for my little man in Fulham!

 

[clyde123]

I had this sort of situation many years ago. Sales / delivery person pocketing the cash. I had copies of delivery notes and all. The police didn't want to know, but I sort of forced the issue and it went to court.
He got off with it. The court decided he had never been properly instructed by his direct manager how to deal with the money !!!
It wasn't a huge amount, I pushed it on principle, and was REALLY ticked off when he got not guilty. Life's like that.

 

[WaveJumper]

Unfortunately over the years I have been involved in investigating quite a few fraud cases generally the companies will not take the matter to court as they don’t want their systems put under scrutiny so its all brushed under the carpet.
Two which I was involved in and did end up in court I could understand why many don’t the defence team try to rip you apart and being accused of terminating the contract of a one parent family member with two children too support does make make you somewhat angry when they have embezzled five figure sums . Both of those cases the individuals were found quilty but I don’t ever remember the companies getting their money back

As said above making sure you have water tight systems is paramount to any business, checks and balances need to be in place and checked religiously and anything out the norm follow up on it ASAP

 

[Mr D]

HI yes he bought the new house and drive nice cars go on holidays etc. he has taken money in his personal accounts so he cannot hide it.

Just because he has taken money into personal account doesn't mean its still there.


The paper trail showing the money arriving does not mean you will get any back. Perhaps you will get some, factor in your thinking that it may take years and you may recover nothing even.
Then anything you do recover is good.

More than once I've come across in the press stories about people stealing large sums from employers. The authorities never did recover all the money, some of it simply could not be traced and a lot of it had been spent.
Someone goes on holiday, perhaps spends a couple of grand. If that is your money then you aren't going to recover that!

 

[IanSuth]

It can happen to the biggest company

2 I can think of local to me , both involved accountants, 1 caused his employer an estate agent to nearly shut, selling off their lettings business to get enough to pay the staff redundancy, that was due to a gambling addiction.

Richard Worth estate agents saved despite £2m fraud

Richard Worth estate agents was saved despite the £1.98m fraud committed by its bookkeeper

www.getreading.co.uk

The other was this - not mentioned in the story is the fact he actually sponsored a local Rugby team pretending the sponsorship was from his employer (Toys-R-Us) when it was from the monies he had stolen from them. The fact he managed to embezzle £3.6m in 2 years beggars believe as to their lax systems

BBC News - Toys R Us accountant stole £3.6m for prostitutes

news.bbc.co.uk

 

[Mr D]

It can happen to the biggest company

2 I can think of local to me , both involved accountants, 1 caused his employer an estate agent to nearly shut, selling off their lettings business to get enough to pay the staff redundancy, that was due to a gambling addiction.

Richard Worth estate agents saved despite £2m fraud

Richard Worth estate agents was saved despite the £1.98m fraud committed by its bookkeeper

www.getreading.co.uk

The other was this - not mentioned in the story is the fact he actually sponsored a local Rugby team pretending the sponsorship was from his employer (Toys-R-Us) when it was from the monies he had stolen from them. The fact he managed to embezzle £3.6m in 2 years beggars believe as to their lax systems

BBC News - Toys R Us accountant stole £3.6m for prostitutes

news.bbc.co.uk

While in theory any system has flaws, a decent one should have multiple checks.
One company I worked for the manager fiddled a considerable amount (tens of thousands at least, possibly 6 figure sum). The person checking was a little old lady, someone who effectively had no clue. Is a Asda receipt for £180 all accounted for or is part of it personal use by the manager? Not checked. Just the receipt was glanced at in a big pile of receipts every couple of weeks and filed.
Could well be the receipt was her own spending on a different day and pocketed the cash from petty cash for it - no one would know.
A system where there was a check on spending - just not a very good one and potentially 15 years of fiddling that could never be investigated.

Could never get the company to see its internal processes were poor. And most stuff blocked by the manager or her chair - the old lady checking the items!

 

[Blood Lust]

HI need help regarding starting an embezzlement case against an employee who was caught stealing money from the company.
He was actually receiving funds from customers in his own account instead of company account. he would take money from the customers who were thinking paying into the company account but the money was going in his personal account. he robbed the company tens of thousands of pounds.
what are our options, shall we complaint in police or get our own lawyer and start the case etc

any help would be appreciated.

kind regards

Can happen easily in small companies as they arent required by law to have audits. Audits check the robustness of internal controls and counter theft measures.

For a small company it can be useful to make sure the person taking orders isn`t the person who takes payments. Also customers should have the paying in details on their invoices. So that they too can spot if payment is going to the right place.

The worst I have ever seen is a manager letting an accounts assistant take home the hard drive every evening with the accounts software files on. So they could feel special and important. I mean come on.

 

[Nexilis HR Solutions]

Hi,

From an HR point of view, if the person is still employed, you need to suspend them immediately. Bear in mind though that this would have to be suspension with full pay. Once this is done, you then need to pass this over to the police as this is a criminal matter as well as an employment matter. Gather all of your evidence for the police, this evidence can also be utilised for an internal investigation which you will also need to complete as part of the disciplinary process. You will have to hold an internal meeting also to present your case to the employee so that they have a right of response to the evidence, this would be as a fact find meeting rather than a disciplinary meeting. You can then hold a formal meeting for gross misconduct if the evidence is solid enough (I would recommend you get this reviewed by an independent person with no pre-conceived ideas of the matter) or wait for the police to press charges and for it to go to court. The latter option is the longest route (considering the employee will need to remain on full pay whilst suspended) but the least risk-averse if the courts find him guilty. If you dismiss him through your internal processes whilst the criminal case is ongoing and then he is found not guilty through the courts, you may find yourself then in an employment tribunal for unfair dismissal. It's a difficult position for you as the employer to find yourself in, I really feel for you as these matters are long and frustrating.

 

[Gyumri]

"HI need help regarding starting an embezzlement case against an employee who was caught stealing money from the company."

If the case is clear cut - in other words unarguable that he has embezzled the money, then an ex-parte feeezing injunction as suggested would oblige him to acount for his assets and freeze them up to the value of your claimand you could then go for summary judgment in a matter of months if there can be no real prospect of a defence succeeeding.

However, the embezzlement by your employee might pale into insignificance compared to the solicitor's fees at £500 per hour for starters that you would need to pay excluding counsel's brief fee and refresher. You might end up thinking that you've been robbed twice.

The police are unlikely to take any interest as they would say it is a civil offence especially if the employee says he has simply been acting as an authorised agent to collect money.

 

[simon field]

Goodness me what a dramatic thread! Is life expectancy long enough to do all this shite?

 

[Gyumri]

Simon is right - between the ages of 30 and 60 there are only 360 months!

 

[oz07]

It's funny what the police will and won't investigate. I think a lot depends on their expectation of an official 'result'

 

[Financial-Modeller]

If the OP has evidence of:
1. the employee advising customers to pay monies into his personal account, and
2. customers confirming payment, and
3. payments over a sufficient period of time that the employee had a chance to rectify a genuine mistake and transfer funds received in error to his employer

then surely any concerns about a future Employment Tribunal can be disregarded on the basis that no ET would be able to possibly find in favour of the employee.

Remember that if the CPS choose not to prosecute, there is the option of a private criminal prosecution.

Obviously a criminal prosecution significantly increases the chances of subsequent civil action being successful and recovery of the funds, if they are recoverable. Much depends on whether he has retained the funds.