Seminar to flush out fraud

Employee fraud, which may cost U.S. businesses as much as $400 billion a year, is always an inside job.

Schemes involving banking and investment fraud are likely in growing areas like Springfield, said Todd Graves, U.S. attorney for the Western District of Missouri. "People looking for chances to swindle other people are going to be attracted to environments like that," Graves said.

In an effort to help identify fraud, a prevention seminar will held June 20 at the Clarion Hotel, 3333 S. Glenstone Ave. "Fraud Prevention and Protection of Your Internal Assets" will address employee fraud and the rising incidence of fraud in Springfield and nationally.

The program, sponsored by the Greene County Prosecuting Attorney's office and the Springfield Area Chamber of Commerce, will feature five speakers from outside the area who regularly deal with issues involving employee fraud in the workplace. Graves will be the keynote speaker.

Stealing on the rise

Speaking on theft in general in southwest Missouri, Greene County Prosecutor Darrell Moore said, "Our whole property filings are skyrocketing" not only in the areas of white collar crime, but in the areas of burglary and forgery as well. "The felony caseload here has increased 125 percent since 1998."

Employee fraud in the United States is a monstrous problem. It "probably equates to between $15 billion and $400 billion a year," said speaker Darryl S. Neier, director of a litigation support group for Sobel & Co. LLC, an accounting firm in Livingston, N.J.

He said the wide range in that cost estimate is because "a lot of fraud goes unreported due to embarrassment of the company. They don't want to alert their stockholders, things of that nature."

Dual controls

Neier will speak on how employees hide their crimes using accounting tactics. He said the trusting nature of some companies can lead to disaster, and he recommended segregation of employee duties be clearly defined for all.

The person "processing the checks for signature should not have authorization or the stamp to sign the check (and) should not be the person who's reconciling the checkbook," he said.

Mark Stingley, a partner in Bryan Cave LLP's Kansas City office, agreed. "Dual controls" should be in place to eliminate the same person writing and depositing checks, he said. His talk will address legal agreements between employers and employees and how far employee monitoring can go.

Simply not taking security seriously is a fundamental problem with a large number of companies, said Mike Schirling, lieutenant with the Burlington, Vt., police department. Em-ployers should establish a system to notify employees about security policies and inform them what they can and cannot do, he said.

Tighter screens

Some potential employee problems can be pre-empted by up-front behavioral interviews and doing reference checks, said Eileen Levitt, president of HR Team Inc., a Columbia, Md., human resources consulting firm. She recommended a "slow to hire, quick to fire" policy for employers.

Levitt said fraud is often right under people's noses. From the employee in payroll who gives herself annual raises to the one who diverts company funds into his own account, the problem is across the board, she said.