Suspected Fraud – How to Begin Investigating

Employee fraud is much more common than most people think. Whether it’s asset misappropriation, fraudulent accounting and financial reporting, corruption or any other illegal activity designed to gain an advantage, it can be something that’s fairly innocuous or it can be something that destroys a business completely.

After you’ve recovered from that sinking feeling you get when you suspect fraud within your workplace, you need somewhere to start investigating before calling in formal law enforcement. Here’s how:

Stay calm!

Regardless of the type or extent of the fraud, it’s vital that whoever is investigating remains completely objective and neutral in their approach. Do not be tempted to confront the suspect straight away without a plan and do not ever base an accusation on an assumption without evidence. If you follow the proper procedurally fair process during the investigation, you’ll ensure that your evidence will be as watertight as possible and beyond unfounded criticism.

Look at all angles

Fraud is often very difficult to find a trail of evidence for, especially when attempting to find witnesses. Therefore, it’s important to brainstorm all angles to find all sources of evidence. Think about things like CCTV, driver logs etc., and whether these can add to your investigation.

Don’t assume the suspect is the suspect

We mentioned that it’s vitally important not to assume anything and this is quite important in regards to pinpointing the primary suspect. You might see a discrepancy that has cropped up from nowhere, you may have heard from a whistleblower or associated employee who has noticed something odd or you might have noticed the fraud due to a customer giving feedback.

Whatever the case, you’ll have a lot of information to sift through, so it can be easy to instantly assume the person you’re seeing in the middle of these discrepancies is the main suspect; however, oftentimes the fraudster sets up their fraud activity using a stolen identity – usually that of another employee. Obviously, it would be a horrible situation to point the finger at an innocent person, so tread carefully!

Let all involved have their say – and record it

After or during your gathering of initial evidence, it’s wise to allow all involved parties to express their opinions or points of view freely. Seek permission from each person you talk to to record all fraud-related conversations (via either a physical recording, video or note taking), as this could go towards evidence. It’s wise to offer the recorded discussions to the individual from whom it came so that they can check the veracity of it or dwell on what they’ve said. This often prompts people to think of new facts that can help.

Investigating a fraud in the workplace can be a daunting position to find yourself in, but it doesn’t have to be a disaster. By following the above steps and calling in a workplace mediation provider (like Emverio Workplace Solutions) or the legal authorities for follow-up, you’ll be giving your investigation the best possible start and the greatest chance of being solved. Just remember that you should never assume anything! If you have a suspected fraud or just want to chat to us about our services, give us a call on 1300 414 179 or click here.