How do I protect my company from embezzlement?
When the worst case occurs and you suspect embezzlement, if you have an Allianz Trade Business Fraud Insurance policy, inform us without delay so we can assist in helping to protect your business from any further loss. We also recommend paying attention to the following points*:
1. The loss has been incurred – but no perpetrator of the embezzlement has yet been identified
- First of all, make sure no further loss of this type can occur.
- Don‘t be satisfied you‘ve “plugged a loophole”. Measures which only prevent the same type of loss happening again aren‘t sufficient.
- Analyse in detail how the crime was carried out. There is a high likelihood this will help you narrow down the circle of possible perpetrators.
- An undetected perpetrator will always find new ways to inflict loss on your company and may threaten its very existence. You should, therefore, arrange for an indepth audit.
- It may be advisable in certain cases to have the circumstances investigated in parallel by independent external assessors (financial auditors, tax consultants, a private commercial investigation firm). We‘ll be happy to assist in looking for an external assessor.
- Involve the police. Investigations into embezzlement by the police often help in clarifying the facts of the case
2. The loss has been incurred – a suspect has been identified or the perpetrator of the embezzlement has already been found
- Coordinate your further course of action with your Legal Department or lawyers.
- Ask your Internal Audit Department or other employees who you trust, and who couldn‘t have been involved, to determine the facts of the case.
- Collect and secure all evidence of the embezzlement.
- Question the suspect and any witnesses and put their statements on record.
- Keep the suspect away from any documents to prevent any possible cover-up.
- Secure all documentation, keys and business identification cards belonging to the suspect. Delete or alter any security access codes and passwords.
- Check whether it makes sense to provisionally suspend the suspect or move them to another position.
- Check the contract of employment and seek legal advice as to whether any periods of limitation need to be met if you intend to assert claims for compensation against the perpetrator.
- Demand a written acknowledgment of liability from the perpetrator in which he admits his liability and agrees to pay compensation due to a dishonest, fraudulent, malicious or deliberate criminal act of a specifically defined amount
3. Secure your claims – to a legally admissible extent
- Set off your claim for compensation against any remaining wages due.
- Check whether any embezzled assets can be recovered.
- Have any bank balances, life assurances, pensions or other claims against third parties assigned to you. Ensure any security interests in real estate are transferred and the title to any motor vehicles assigned to you. You‘re entitled to demand the perpetrator’s assets as security up to the permissible attachable amount.
- Take advantage of the help available from the courts where appropriate to secure or attach assets of the perpetrator, e.g. by seizure or a restraining order.
- Check whether there are any rights of recourse against third parties who played a part in causing the loss.
- Terminate the perpetrator’s contract with immediate effect in order to prevent any further losses from occurring.
Business fraud insurance can help protect your business against financial crime such as internet payment fraud
Allianz Trade is a European leader in Allianz Trade Business Fraud Insurance. From SMEs to multinationals, we give our business customers confidence in tomorrow.
Footnotes
* This checklist contains our suggestions for preventive measures. These proposals are however not binding. You are of course free to act differently.
