It is a well-known fact that for theft or fraud to occur in the work place there must be three factors present says Mike Georgantis, the director of Icarus Investigations Ltd. These are pressure, rationalisation and opportunity.
Mr Georgantis explains these factors relate to the rationale behind a person stealing from or defrauding their employer.
Pressure as a motivator for fraud
Pressure is seen as the motivator for their actions, such as a gambling or drug addiction, overwhelming debt problems or simply needing money to fund a lifestyle they cannot afford.
Georgantis says pressure is a sphere that the employer cannot influence; these are choices that the employee makes, but are able to be recognised and identified by the employer. By knowing your and talking employees, you can identify the warning signs of gambling or drug addiction; identify those under financial pressure or living beyond their means.
Opportunity – the methods used for fraud
Opportunity is the method by which the employer will steal or defraud the company. This is where an employer under pressure sees a means by which he can steal from his employer to solve the financial pressure that he is under. Mr Georgantis goes on to say that this is a sphere that the employer has control over and must control. They do this by insuring that the company has strong internal controls and audit functions, segregation of duties for this handling cash for example. This reduces the opportunity and ability to steal.
Rationalisation as a justification for fraud
Rationalisation is in effect the moral compass of the employee. This is where the fraudster justifies in his mind that stealing from his employee to solve his financial woes is acceptable. “I will only do it this once and if no one finds out what is the harm”. An employer has the ability to influence the employee’s rationalisation. By having a strong and visible policy against theft and fraud and the employee knows there are consequences for their actions such a prosecution.
Mr Georgantis states that the employee who is considering taking such drastic actions will have second thoughts is he knows that is caught he will be fired and arrested by the Police.
Removing the opportunity
By removing either the opportunity or the ability of the employee to rationalise his offending, you will have prevented the theft occurring.
Mr Georgantis and Icarus Investigations Ltd has vast experience in fraud prevention is large and small companies. He recommends a proactive approach should be taken by all companies through a Fraud Risk Audit. Icarus can undertake this and complete a comprehensive audit of your cash handling, invoicing and financial management as well as your employees, identify weaknesses and recommend policies, controls and processes that will reduce your company’s susceptibility to theft and fraud, both internally and externally. In today’s economic times no organisation can sustain the financial loss that poor fraud risk management could allow to occur.
No company is immune to being defrauded
A former Skycity and Diocesan School for Girls executive has been arrested and charged defrauding her employers with $2.5M
www.stuff.co.nz/business/industries/75789040/SkyCity-silent-on-former-finance-executives-fraud
A Mediaworks employee has been charged with stealing $450,000 from her employee by using colleague’s company credit cards and false invoicing.
www.stuff.co.nz/business/78060378/Mediaworks-staffer-accused-of-stealing
A “blue Collar” worker stole in excess of $2.3M from Mighty River Power through a false invoice scam via companies set up for the express purpose of defrauding his employer.
www.stuff.co.nz/business/76776582/couple-on-trial-charged-with-stealing-23m-from-mighty-river-power
Please contact Icarus investigations Ltd and they can discuss your specific fraud prevention needs with you and tailor a package to meet your requirements.
