Embezzlement in California is a crime that can occur in any workplace – no matter how big or how small. According to the Association of Certified Fraud Examiners, organizations lose 5% of their yearly revenues to fraud. Embezzlers often take great care to hide their crimes, so embezzlement is often difficult to spot. But some signs can indicate embezzlement is taking place within your business.
California embezzlement
California Penal Code Section 503 PC defines embezzlement as a crime of fraud or theft that involves someone taking property that is entrusted to them. Embezzlement is often committed by employees, high-ranking executives or financial advisors. But no matter who commits the crime, some signs can indicate someone is committing embezzlement.
Spending habits
If an employee who handles business money starts living beyond their means, that could indicate embezzlement. For example, an employee might suddenly buy expensive items they couldn’t normally afford. Items could include a luxury car or a large home in an exclusive neighborhood.
Records tampering
An employee committing embezzlement might falsify accounting records or hide financial transactions. This is an attempt to hide their theft. If you notice accounting errors, it’s possible the errors are on purpose. False receipts or invoices are also red flags.
Isolation
An employee who commits embezzlement might isolate themselves from their coworkers and superiors. They don’t want anyone close enough to realize a crime is taking place. If an employee becomes angry or defensive when asked about their work, it could mean they’re hiding something.
Embezzlement is a crime that can cause substantial harm to your business. If you suspect someone is embezzling, have evidence before making a claim. You’ll likely have to start with an internal investigation and suspend the suspect’s business access and privileges.