Spectacular fraud is no longer the sole province of Wall Street and the Bernie Madoff's of the world. Now it has come to cabinet shops.
In case you missed it, a woman was arrested and charged with embezzling more than $9 million from her employer, a cabinet shop in Southern California. She apparently spent a great deal of the money on designer clothes, including some 400 pairs of shoes.
But the really sad thing about the story is that the money lost from the business was so significant, especially in light of the economic downturn, that the company had to lay off valuable employees.
Why should you care?
This story is disturbing from a multitude of angles besides the obvious one of why there wasn't more oversight by the company owners over this woman who was the firm's chief financial officer. How can an owner of a business small enough to have only one person in charge of the finances be so out of touch as to not miss $9 million?
The owner reportedly didn't know anything was amiss until American Express called to ask why the woman's personal AmEx bill was paid for with a company check. How can a person be so greedy that her personal desires for a stylish lifestyle are so important that she's willing to sacrifice fellow employees' jobs or even the future of her own company?
We have entered a sad time when far too many people are functioning in the every man (or woman?) for himself mode. The little guy may figure the fat cats in the big offices are sitting pretty, so what does it really matter if the little guy cheats a little, takes a little, shares a little in the greed seen on high.
In a small business like a cabinet shop, it may come down to petty theft or cheating on hours or just not putting in the kind of effort that is expected.
In times like these, no one can afford that. The poor, misguided guy who thinks his little thefts are getting him even might lose his job and his freedom if he's caught. The business could lose even more. It could start with lost clients as shoddy work and bad attitudes filter out to the customer.
In more extreme cases, it could jeopardize the entire company, costing more jobs and livelihoods. When so many companies are struggling, it wouldn't take much to get there these days.
Staying in control
As a business owner, you need to stay in control and make sure everyone is on your team, understands the goals, and is working diligently to achieve them. If they aren't, they already are too expensive to keep even if they haven't yet bought 400 pairs of shoes with your money.
But also as a business owner, you have a daily responsibility to know what's going on in your business. You need to know if individual employees may have an axe to grind or a misguided view of the world and what they are entitled to. You need to know whether employees truly understand how they benefit from the success of the business.
And you need to take action when employees stray from the path you've chosen.
This is not to say, that you shouldn't be able to listen to constructive criticism and suggestions. Your best employee and best team player may be the one who convinces you to change course for the good of the company. You need to foster that kind of behavior, too.
A business owner who leads a really cohesive team has far less to worry about from employee theft, and he has a lot more going for him to get the company and everyone who is part of it safely through any trouble.
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