Nicole Knox is an attorney that specializes in white-collar criminal defense cases. She shares her insight on how to keep small businesses from becoming a victim to theft and white-collar crime.
(Photo courtesy of Nicole Knox)
What steps can be taken to minimize employee theft/embezzlement for small businesses?
There are three basic steps a small business owner can take.
Be involved. When a small business owner is involved in decisions and procedures relating to operating costs, payroll and daily accounting methods, the owner reduces his or her risk of loss due to theft or embezzlement. As a hands-on small business owner, you acquire the knowledge required to notice unexplained losses and your employees are less likely to engage in fraudulent practices when they are subject to enforced anti-fraud policies and procedures.
Involve a third party. Hire an independent auditor to prepare an annual financial report, and hire a certified public accountant to prepare your taxes. Independent financial reports and tax preparation allow you to objectively review your financial progress and provide an additional layer of security should your finances ever be subject to further scrutiny.
Insure your investment. Even if you are diligently overseeing the financial activity of your business, you are not immune from traditional fraud. Additionally, technological advances make cyber crime a growing risk to small businesses. As a result, small business owners should prioritize purchasing an insurance policy that protects against losses incurred from traditional fraud or cyber crime.
What are the legal steps that should be followed if a business has discovered a theft of intellectual property or embezzlement of funds?
If a small business owner discovers the theft of intellectual property or embezzlement, then he or she should immediately consult with an attorney. Hiring an attorney is important to protect the owner from allegations of involvement in misconduct. I always remind my clients that it is a long road from a criminal investigation to a jury trial, and it is imperative to involve an attorney as soon as a small business owner suspects an investigation may ensue. If you do not hire an attorney to advocate for your interests during an investigation, then you give the opposing party a head start to develop the evidence. I always prefer to be involved in a case from the beginning because it levels the playing field, which allows me to better protect a client’s liberties.
Robin D. Everson is a native Chicagoan who resides in Dallas, Texas. Her appreciation for art, food, wine, people and places has helped her become a well-respected journalist. A life-long lover of education, Robin seeks to learn and enlighten others about culture. You can find her work at Examiner.com.