Embezzlement: What It Is and Why You Should Care
If you own a small business or work in finance, the word embezzlement probably makes you uneasy. It’s simply when someone who handles money steals it for themselves. The person might be an employee, a manager, or even an outside contractor. What makes it tricky is that the theft often looks legit on paper until someone digs deeper.
Common Ways Embezzlement Occurs
First, many thieves use fake invoices. They create a bill for a service that never happened, then approve payment from the company’s account. Second, payroll fraud is popular – an employee adds a ghost worker to the system and collects the salary every month. Third, cash‑skimming happens in retail or hospitality where cash is taken before it gets recorded. Lastly, online transfers are a newer avenue; a hacker with access can move funds to a personal account under the radar.
How to Detect and Prevent Embezzlement
The best defense starts with strong checks. Keep separate duties so no one person controls both recording and disbursing money. Run regular audits – even surprise ones – to catch odd patterns early. Use software that flags duplicate vendors or unusual payment amounts. Encourage staff to report suspicious activity; a simple anonymous hotline can save you big losses.
When something looks off, act fast. Review bank statements line by line, compare them with invoices, and ask for receipts. If an employee claims a cash shortfall, investigate the source before accepting explanations. Remember that catching embezzlement early limits damage and sends a clear message that theft won’t be tolerated.
In many cases, the culprit hopes no one notices. By staying vigilant, setting up clear controls, and fostering an open culture, you reduce the chance of a costly breach. Keep these tips handy, and you’ll protect your business from hidden theft.
Ex-Attorney Tom Girardi Convicted of Massive Client Embezzlement Scheme
Tom Girardi, a former high-profile personal injury lawyer, has been convicted of embezzling millions from his clients. The U.S. attorney's office revealed that Girardi misappropriated funds from client trust accounts at his law firm. The conviction comes after a long investigation, uncovering that Girardi stole around $15 million from clients between 2010 and 2020. This case marks a devastating fall from grace for the once-renowned attorney.
read more