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4 Tell-Tale Habits of Manufacturing Employees Who Commit Fraud

By: Kevin Brady

Discovering employee fraud in your manufacturing business can feel like a punch to the gut. Not only has someone been embezzling your hard earned profits, but they’ve been sitting right under your nose while robbing you blind.

Putting the brakes on employee fraud remains an ongoing challenge for many manufacturers, and even the biggest businesses aren’t immune. Employees who commit fraud often go years without detection, manipulating their authority and tenure at a company to stay under the radar while cashing in big.

Despite this, fraudsters often exhibit tell-tale habits that can serve as red flags to management that an employee may be up to no good.

1. They Live Beyond Their Means

You know how much you’re paying your employees, so you should have a decent guess as to what kind of lifestyle they can afford. If someone on your staff has been taking extravagant vacations, purchased a whole new wardrobe and just bought a brand new car, you may want to ensure that their influx in income isn’t coming from your company’s bottom line.

2. They Are Struggling Financially

Everyone is bound to hit financial speedbumps, but if an employee’s financial problems become unmanageable, they may be tempted to skim the difference from your business. Bankruptcy, hardship withdrawal from a benefit plan, collection calls, divorce or an addiction to drugs, alcohol or gambling should serve as warning signs that your employee may be in over their head and could start looking for ways to cash in on your business.

3. They Are Really Close With a Vendor or Customer

Fraud isn’t always a solo affair. Keep an eye out for employees who are unusually close with a client or vendor, and pay special attention to purchasing documentation or invoices received from or sent to those external parties.

Remember, while your office manager’s best friend’s brother may be giving you an amazing deal on office supplies, you may wish you’d gone with another vendor once you discover that the pair had been working together for months in a fraud scheme that has cost you thousands.

4. They Won’t Share Any of Their Duties

You may relish an employee who hasn’t taken a vacation in years and is consistently the first one in and the last one out the door at night. The trouble is, their steadfast dedication may have less to do with helping your business grow and more to do with avoiding detection.

If you have an employee on staff whose reluctance to share duties is borderline hostile, take a second look at what exactly they are working on. It may turn out that their refusal to share duties or take time off is to avoid anyone accessing their computer or files and exposing their fraudulent activity.

What If I Suspect Fraud In My Company?

If you suspect fraud in your organization, you’ll want to sit down with a fraud expert as soon as possible. When it comes to suspected fraud, you want a seasoned investigator who has the expertise and knowledge to spot a fraudster and, if needed, help prosecute them.

To identify different types of fraud, you can tap into free resources like webinars, whitepapers and blog posts to beef up your knowledge of common fraud schemes hitting the business world and prevention strategies to stop fraudsters from targeting your company. 

Need Help?

Contact us online or call 800.899.4623.

Published September 22, 2016

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