The Trusted Network of Private Investigators
Find an Investigator
Find an Investigator

Are Employees Using These Sneaky Tactics to Defraud Your Business?

  • October 16, 2006
  • by PInow Staff

Employees embezzle many millions of dollars from their employees each year. All businesses need to be aware of the most common worker scams.

In 2004, Lucy Magda pleaded guilty to stealing more than $2.2 million from her previous employer, the St. Catharines Standard. The Burgoyne family, who owned the newspaper, was forced to sell the newspaper to Southam Newspapers in 1996, a move that some experts claim was brought about by Magda's dishonesty. In 2006, a business manager of the N.C. Press Association pleaded guilty to embezzling $268,340 from his former employer. In 2006, an employee of Brock Cabinets was sentenced for five to seven years in prison after she was found guilty of embezzling $1.5 million from the company that hired her.

Findings from the University of Florida's 2004 National Retail Security Survey suggest that theft by employees means more than $14.6 billion in annual losses, which means that employee embezzlement and dishonesty is the single most expensive type of fraud affecting businesses today. Yet, many businesses are blissfully unaware of the impact their employees have on their businesses. Lucy Magda was considered an ideal employee at the St. Catharines Standard even though she stole from the newspaper for many years -- and only the quick eye of a temporary worker caught discrepancies that led to her arrest.

There are many ways that employees may steal from a business:

  • Stealing outright. Employees who have access to bookkeeping and cash in a business can simply pocket money. Even employees who have no access to money can steal company products and even business supplies that can easily add up to thousands of dollars in losses.

  • Disguising thefts as waste or some other reasonable loss. Many employees steal products or money and disguise the theft under some other loss. They may report stolen food or items as spoiled, for example. They may also report stolen money as money handed over for deliveries or other legitimate spending.

  • Giving services or products to friends and not ringing up purchases.

  • Incorrectly ringing up purchases and pocketing the difference. A common scam is to knowingly ring up a purchase incorrectly. If a client or customer does not notice the difference, the employee can simply cancel the receipt and keep the difference for themselves.

  • Ringing up charges but then canceling the transactions and pocketing the money. Bogus charges can easily add up to thousands of dollars and it can be hard to spot which transactions are legitimate from those that are not.

  • Giving customers smaller amounts of products and taking those amounts home. This sneaky scam victimizes customers and also gives any business a poor name. Unscrupulous employees in the food industry have ideal conditions for this type of fraud.

  • Wasting time on the job or simply not doing the job. This ensures that employees are paid for work that they have not done, which essentially steals from the payroll.

If you suspect that employee fraud is costing your business, it would be wise to take proactive steps now. Many experts now claim that employee dishonesty may be one of the leading reasons why businesses fail. Stopping deceitful employees in their tracks is a must to save a company, in many cases. Any business owner needs to start looking at accounts and bookkeeping carefully themselves to check for inconsistencies.

If any irregularities are found, it is imperative to call a private investigator. Simply dismissing a dishonest employee can bring about an unlawful dismissal suit, and in these legal disputes, the onus is on business owners to prove that they were justified in firing an employee. Private investigators should also be called in if you cannot pinpoint the source of theft. Investigators can identify who is stealing and can find specific ways to stop the process. They can also gather evidence so that employers can fire unscrupulous workers without fear of lawsuits. In rare cases, they can work to reclaim some of the money that employees have squirreled away from their embezzlement.

If you need to act now to save a business and stop theft, the Worldwide Directory of Investigators may be the answer. The specialized Worldwide Directory of Investigators allows anyone to find local, qualified investigative professionals who can start work on a case fast and can get real results.

About ( is a Worldwide Directory of Private Investigators that enables law firms, corporations, and the general public to find investigators anywhere. strives to be the most trusted resource on the web to locate qualified investigators. All investigators listed on are pre-screened and must meet specific listing requirements. was developed by the team that brought you the Process Servers Directory (

Visit to find investigators who can help with all your investigation needs.

More Information about Fraud Investigations: 

Search Articles

The Lawgical Promise

The Lawgical Promise guarantees our members are pre-screened to verify their qualifications.

Find an Investigator

Frequently Asked Questions