An embezzler is an individual who illegally and fraudulently converts funds or property entrusted to them for their own use. The perpetrator of embezzlement, or financial fraud, steals money or possessions that they were given in trust by their employer or another party.
Embezzlement is a serious form of theft, and offenders can face jail time if caught and convicted. Businesses and other organizations must take measures to protect themselves from this common form of financial crime.
Common Examples of Embezzlement
Embezzlement can take place in a wide variety of settings, and in some cases, an individual may not even realize that their actions could be considered illegal. One of the most common examples of embezzlement is an employee using their access to company funds in unapproved ways, such as making unauthorized purchases or taking cash out of an account.
Other examples of embezzlement can include:
- Inflating expense accounts
- Padding a payroll
- Forging an employer’s signature for a financial document
- Using a company credit card for personal expenses
- Misappropriating funds intended for taxes
- Split-billing schemes designed to deceive customers or insurers
Ways to Secure Your Business Against Embezzlement
The proper financial protocols and internal controls are the first step in protecting your business from embezzlers. Establishing robust accounting systems, detailed audits and regular reviews of financial reports will help to detect any suspicious activities. A fraud-prevention plan should also include establishing a code of ethics for all employees and clear policies about the proper use of company resources.
Hiring qualified and experienced employees can also reduce the threat of embezzlement by increasing transparency and accountability. Educating staff about the legal consequences of financial misdemeanors can also discourage wrongdoers from taking risks.
Finally, businesses should invest in advanced cyber security and monitoring systems, and make sure that all access to company funds is securely monitored and tracked. With the right safeguards in place, any potential criminal activities will be quickly identified and addressed.
The Bottom Line
Embezzlement is a serious form of financial fraud that can have devastating consequences for businesses and other organizations. By implementing the right anti-fraud measures and sensitively managing staff, businesses can minimize the risk of embezzlement and protect their bottom line.