What Do You Do When You Discover Your Employee is Cheating on You

He’s acting strange. He doesn’t meet your stare. There are questions about his work. You dig deeper. What is wrong with your employee? Then you find out. Your employee is cheating on you and has committed fraudulent acts against your company (and even your clients!). Your first instinct? Scream blue murder, wring his neck, shake him senseless then throw him to the dungeon (er, I mean jail). Paints a nice picture, doesn’t it? But you’ll have to admit, your own method of taking “revenge” on your thieving, lying fraudster of an employee will not really get anything done. It guarantees satisfaction - yes, but guarantees results? Definitely not.

So what do you then when you discover that your employee is committing fraud against you and your company? There are a lot of options available for you and you can have your pick of them. Listed below are just some of the things that you can do when this thing happens to you:

Breathe Deeply and Relax

First of all, you need to calm down. Get your emotions under control. Stop thinking about how you’ll exact your revenge. Instead, start thinking rationally about your next steps (like not killing your employee). Do you want to get legal help? If yes, get an appointment with a lawyer you can trust. Or do you just want expert advice? Best of all, start thinking this – what is the extent of your employee’s fraud in your business? Then go to the next step.

Dig Deeper

So you have already uncovered his fraudulent activities. But are you sure that is ALL? To reassure yourself, dig deeper into his past months’ activities. Find out how long he has been doing it, who are the clients affected and if anybody else is aware of what he was doing. Go through the papers or documents he handled, his drawer, his table, his computer, your computer system and everything else you can think of that might possibly give a clue to his dealings. Only when you have exhausted all efforts to do so, can you finally say stop and enough and that’s it. BUT say stop only when you are really satisfied with the output of your “investigation” and not because you’re just plain tired or afraid of what you will find out. As the boss (and the owner), you have every right to find out the extent of his (fraudulent) activities. Of course, you can always ask him, your employee, but would you really trust his word now that you what he is capable of doing? Not likely.

Get Legal Help

Or at least consult a lawyer, one you really trust. This doesn’t mean that you are really contemplating filing a legal case against your employee (although this is a better alternative than “revenge”). But you need to know what are your legal rights, what are the documents that you need to gather (as evidences) and how do you go about. If you want to file a legal case against your employee, you need to take this a step at a time. The last thing you want is for your employee to walk away free due to a technicality on the actual case.

Obtain Outside Advice

Know somebody who went through the same thing? Or you think you know of somebody who may have possibly experienced the same thing. Then go to him or her for an advice. Ask this person if he or she has experienced this before and what did he or she do. However, do make sure you really know this person and that he or she will keep the matter confidential. It is always good to get a third-person opinion but one must be careful who one talks to, otherwise, everything can just blow up on your face.

Talk to Your People

Even if you try to keep everything hush-hush, chances are your other employees have a pretty good idea of what is happening in your company. You can opt to talk to them and tell them what is really going on. Tell them the truth about what happened, what you have discovered so far and what are the initial steps you’re taking. Then, get their cooperation by telling them not to discuss anything outside of the company (not even to the clients) because of the sensitive nature of the situation. If your employees are really concerned about your company and you, they will keep mum on the matter.

Be Ready

Lastly, make all the necessary preparations for when you will talk with your erring employee. Follow your lawyer’s advice to the letter. Gather your documents and prepare your thoughts. Prepare all necessary papers and memos. Then prepare yourself. You will eventually (if you haven’t done so already) talk to your employee and you need to be calm and collected when you do so. Just remember, you already know what he was up to and you have the documents to back you up. This, among everything else, is what will keep your confidence up (and your temper under control).

One last note, fraudulent activities are done because of certain weaknesses in the company’s internal controls. You need to find out what these weaknesses are and correct them. Make your corrections fast and announce them when you talk to your people. This way, you head-off any possible repeat of these activities and this gives an assurance to your concerned employees that you are on top of the matter.

Note: This hub is based on a true story of one of my friends. To date, there is still no end in sight to his problem but he and his (ex) employee have already signed an agreement and the latter just made his first payment. Most of what is written above he has already done them. It’s just a matter of him recovering from this setback. Fortunately, his business and his clients were not overly affected.