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Embezzlement in the Workplace: Signs to Watch Out For

By: LS Carlson Law April 17th, 2023

As a business owner, you put your trust in your employees to handle your finances and assets with care. Unfortunately, not all employees can be trusted, and some may resort to embezzlement to enrich themselves at the expense of the company. Embezzlement is a serious crime that can result in financial losses, legal liabilities, and reputational damage for your business. In this blog post, we'll discuss what embezzlement is, why it happens, and what signs to look for to prevent and detect it. If you suspect embezzlement has occurred in your workplace, you'll need the help of an experienced business litigation attorney to protect your rights and recover your losses.

What is embezzlement?

Embezzlement is a type of theft that occurs when an employee who has been entrusted with property or funds of a business or organization fraudulently takes or uses them for their own purposes. Embezzlement can take many forms, such as:

• Falsifying records or receipts to cover up the theft
• Writing unauthorized checks or making unauthorized wire transfers
• Using company credit cards or accounts for personal expenses
• Stealing physical assets or inventory
• Accepting kickbacks or bribes from vendors or customers

Why does embezzlement happen?

Embezzlement can happen for various reasons, such as:

• Financial need or greed: An employee may feel justified in stealing from the company if they are in debt, have a gambling problem, or want to live beyond their means.
• Opportunity: An employee may see a weakness in the company's accounting or internal controls and exploit it to commit theft.
• Rationalization: An employee may convince themselves that the theft is not a big deal or that they deserve the money more than the company.

What are the signs of embezzlement?

Embezzlement can be hard to detect, especially if the employee responsible is skilled at covering their tracks. However, there are some signs that may indicate embezzlement is occurring, such as:

• Unexplained or unauthorized transactions or transfers
• Missing funds or discrepancies in accounting records
• Unusual or excessive expenses or reimbursements
• Alterations or falsifications of financial documents
• Reluctance or defensiveness to provide information or explanations about finances
• Living beyond means or exhibiting sudden wealth

If you suspect embezzlement is occurring in your workplace, it's important to act quickly and discreetly to gather evidence and protect your rights. You'll need the help of a business litigation attorney who understands the legal and financial complexities of embezzlement cases and can advise you on the best course of action.

At LS Carlson Law, our business litigation attorneys have decades of experience helping businesses in Orange County and beyond deal with embezzlement and other forms of financial misconduct. We can work with you to investigate and prove the embezzlement, identify the responsible parties, and pursue legal remedies such as restitution, damages, and injunctions. We'll also help you strengthen your internal controls and procedures to prevent future embezzlement and protect your business from other legal risks.

Contact us today to schedule a consultation and learn more about how we can help you with your business litigation needs.

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