Quiz yourself on these business crime situations.
Situation 1
A property manager covered her theft of cash payments by manipulating financial reports.
Would this action be?
A.) Fraud
B.) Employee Dishonesty
C.) Embezzlement
The answer is B, employee dishonesty. In fact, this property manager from a condominium association stole more than $45,000.00 in cash payments from association members.
Situation 2
An employee from an undisclosed trucking company intentionally stole money by accessing wire transfers using another employee’s login profile. Once caught and terminated, he continued to steal money by way of remote access to the system.
This is an example of:
A.) Employee Dishonesty
B.) Fraud
C.) Embezzlement
The correct answer is C, embezzlement. Although this behavior was also dishonest, the company trusted this employee to move the funds to the appropriate recipients intended. This action resulted in a loss of more than $400,000.00.
Situation 3
A bank employee initiated a series of wire transfers to fictional entities created by the employee. Once the funding was received by the fictional account holder, it was then transferred to overseas accounts.
What type of business crime would this be?
A.) Employee Dishonesty
B.) Embezzlement
C.) Fraud
If you guessed C, then you are correct. This type of fraud is known as ‘Funds Transfer Fraud’. In this instance, the loss of money was well over one million dollars.
Lack of insurance coverage for business crime could mean trouble when it comes to loss of; money, resources, time and reputation. You don’t want to get caught off guard without sufficient coverage in the event of an incident. Take this last situation from Travelers Insurance into consideration when debating the purchase of a ‘Business Crime’ policy… A sales supervisor stole payments from customers totaling $1.6 million in loss. The employer was under insured at $500,000.00 and was left on the hook for $1.1 million.
Don’t let this happen to you. Contact the team at Haylor, Freyer & Coon, Inc. to ensure that you have the right coverage for your business.
