6 Strategies Employers Use to Crack Down on Workplace Fraud

When it comes to workplace fraud, Colorado employers are often particularly cautious.

They have reason to be—research from the Association of Certified Fraud Examiners found that an average company loses an estimated 5 percent of its revenue to workplace fraud every year. This means in Colorado alone, businesses may lose more than 10 million to fraud on an annual basis.

To cut their losses, companies across the state are stepping up their fraud-prevention efforts. Below, we’ve listed six strategies that employers use to crack down on fraud in the work place.

Conducting background checks. When you apply for a job, you can be almost certain that your prospective employer will conduct a background check to learn about your criminal history. If you have any criminal convictions that have not been sealed from your record, a potential employer may see you as a high-risk candidate and deny you for the position.

Checking references. To weed out high-risk applicants, many employers will also contact references and past employers to ask about past instances of fraudulent or unscrupulous behavior.

Separating roles. Many employers know to assign approval and reconciliation duties for all roles to separate employees in order to prevent fraud. To make it difficult for fraud to be committed in the workplace, employers may separate the following roles:

• The requesting of company purchases from the approval of company purchases
• The approval of company purchases from the settlement of financial reports
• The approval of company purchases from the handling of checks
• The management and reconciliation of accounting records from the handling of checks
• The sorting of mail and listing of checks received from the deposit of checks
• The sorting of mail and listing of checks received from the management of the accounts receivable records

Auditing. To catch fraud, theft, and other undesirable behaviors, employers may perform routine audits. You employer may regularly go through business expense reports, sales reports, and vacation and sick day records to try and pick up on infringements. They may even monitor your social media and email account usage to determine whether you are breaching company policies.

Looking for signs. Supervisors and company fraud-prevention personnel are briefed on common red flags of fraud, including:

• Sudden changes in behavior or attitude
• Rarely taking vacations or sick days
• Frequently working overtime
• Acting protective of your workspace
• Preferring to work after hours or at home
• Unexplained profits and losses in records

Encouraging anonymous reporting. Your employer may set up a hotline that enables your coworkers, managers, and clients to make anonymous reports if they suspect fraud. This could include activities like mortgage fraud for housing, where someone misrepresents information to obtain a mortgage, or expense report manipulation. To encourage reports of fraud, your employer may introduce a firm no-retaliation policy for whistleblowers. Your employer may follow-up on all anonymous reports of fraud and theft with a thorough investigation.

The Penalties of Workplace Fraud

If an employer believes you have committed fraud, he or she not only may terminate your employment, but file criminal charges against you. Colorado law enforcement will take over from here, and if you are found guilty, you may be penalized with incarceration, fines, and a lifelong criminal record. However, it’s important to remember that having a criminal background doesn’t necessarily close all doors. Our tips for applying to jobs with a criminal background can offer guidance on how to navigate the job market successfully despite past mistakes. You may also be required to pay restitution to your employer for the money you are believed to have defrauded from the company.

If you have been charged with workplace fraud, or believe you may be the target of investigation, you should consult with a criminal defense attorney with experience in Colorado fraud cases. Your attorney can investigate your case and help you build the most powerful defense possible, putting you in the best position possible to have your fraud charges reduced or dropped.