Using Order, Honesty and Respect to
Keep White Collar Criminal Activity Absent from your Workplace

Creating an atmosphere in your company that encourages trust and has high expectations for honesty and order is important to reduce the risk of the theft of money, goods, or intellectual property. 

The National White Collar Crime Center (NW3C) reported in a June 2008 article that estimated losses due to traditional and new white collar crimes can range from $20 to $90 billion annually.  When losses due to intellectual property theft are included, the NW3C reported that the number jumps to $240 billion a year.  

Sometimes referred to as economic espionage, the theft of a company’s process, idea, client list or design can be as devastating as the loss of thousands or hundreds of thousands of dollars right out of the company’s coffers.  A thief will often have to use a sophisticated plan to steal that much cash but other criminals can do just as much damage by very simply picking up and walking away with hard copy versions of intellectual property left casually laying around on a desk, near a copier or in an in-box. 

Here are a few ideas to keep white collar criminal activities absent from your business:

Set a good example for order.  Keep common areas and rest rooms immaculate and attractive.  Expect your employees to do the same in their office, cubical or immediate area where they work.  Place recycling containers or shred boxes near copiers and printers to make it easier to properly dispose of paper no longer needed.  Make it obvious where things belong.  If setting a good example isn’t effective enough, then set written guidelines for a clean and orderly workplace.  You may think it’s obvious that your prospect files should be kept in a drawer, but your employees may think it’s perfectly fine to leave it on their desk every day, and night, right next to their phone.  Besides the obviousness of looking good, an orderly workplace reduces waste and clearly increases the security of confidential information.

Set a good example for honesty.  The NW3C also reports that employee theft is often found in workplaces with high rates of other deviant behavior.  When an employee observes a supervisor in a dishonest act, even a minor one, the tone is set.  White collar criminals eventually caught often believe they were smarter than the owner or their supervisor.  Be vigilant and put proper internal controls and whistleblower policies in place to let your employees know you demand and expect complete honesty from every employee in every area of your business. 

Set a good example for trust and respect.  But don’t be shy to verify.   It was good advice from Ronald Reagan during the Cold War and it works well in business today.  “Praise in public, punish in private” should be your company’s mantra.  Understand too, that the term “embezzlement” means theft or fraud committed by an entrusted employee, one that you may never suspect.  Be respectful and non-threatening, but be vigilant, applying regular verification of employee’s activities throughout your organization.  A recently released study by the Association for Certified Fraud Examiners (ACFE) includes alarming statistics.  Almost half (49.1%) of the 500 of randomly surveyed Certified Fraud Examiners (CFE’s) believe that economic pressure was the largest reason for an increase in fraud over the last 12 months.  Other factors stated by the CFE’s included increased opportunity (27%) and increased rationalization or the belief that they were “owed” the money or property they stole, or felt it “served them right” for perceived mis-treatment or disrespect.  

Even with these few ideas in place and working well, businesses can fall victim to traditional and new white collar crimes.  For additional information on internal controls or advice on implementing these or other strategies, call the fraud prevention and detection experts at William Vaughan Company at 419-891-1040.