Stealing a Slice of the Company Pie

A reader of this column I'll call Stan received some jarring news upon returning to work after Christmas: His boss had been fired for doubling her paycheck for nearly five months.

"She was not very smart about the way she went about taking the money," wrote Stan, who works as an IT manager at a carpet distributor in Dalton, Ga. "She simply added money to her paycheck since she was in charge of payroll. She was found out by a year-end audit by the company accountant."

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While Stan's former boss faces potential criminal charges, Stan and his coworkers are left holding the emotional bag, wondering why their office manager of two years felt compelled to steal from the company that had trusted her.

"It has been difficult for the office staff to come to terms with the theft," Stan said. "She was our friend and the theft was a violation of that friendship and our trust."

Most people who've been in the workforce at least a few years have a firsthand or secondhand story like Stan's to share. In fact, the Association of Certified Fraud Examiners reported in 2008 that U.S. companies lose 7 percent of their annual revenue to employee theft -- from inflating expense reports and abusing company credit cards to selling stolen inventory on eBay and flat-out embezzling.

During economic crises, consumer experts like to warn us about the growing tsunami of scams out there: foreclosure rescue rip-offs, executive marketing shams, bogus home-based jobs, you name it.

But does this mean employers should also expect to see the same diminished ethics from cash-strapped employees feeling the financial pinch? Is this deep recession we're in cultivating a new crop of mini-Madoffs?

It's the Economy, Stupid

Thom Burke, vice president of human resources at international staffing firm MPS Group, thinks so.

"In tough economic times, you'll see an increase in employee theft just like you'd see outside the workplace," Burke said.

"Thirty percent [who steal] are managers. If you have access [to company assets], that's when a situation is going to occur."

According to Burke, employees help themselves to a piece of the company pie for many reasons -- and not always because they're facing financial peril. They may be miffed about not getting a raise. They may be peeved about having their salary cut. Either way, they probably think the organization's too big for anyone to notice them skimming a bit off the top.

Burke's not alone in his view of crimes against corporate humanity.

A November 2008 survey of nearly 400 U.S. companies by the Seattle-based Institute for Corporate Productivity found that 24 percent have seen an increase in the theft of inventory, electronic equipment and office supplies (beyond the occasional pilfering of pens and Post-it notes). And 18 percent reported a rise in financial crimes like padding expense reports and otherwise lifting company funds.

Anatomy of a Corporate Crime

Call me a goody two shoes, but I find taking such chances with your employment record (not to mention your criminal one) outstandingly short-sighted -- especially in a job market where employers have their pick of the workforce litter and are looking for any excuse to lay off less productive employees.

Convinced that something wasn't adding up, I consulted a couple of forensic accountants who specialize in business fraud.

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