Exposing Employee Theft in New York

What You Need to Know Before It’s Too Late

Have you ever had that nagging feeling that something just isn’t right in your business? Maybe inventory is disappearing, cash isn’t adding up, or an employee’s sudden luxury purchases don’t quite match their paycheck. If so, you’re not alone. Employee theft is a growing problem for businesses across New York, and it can hit hard, draining your profits, breaking your trust, and leaving you scrambling for answers.

It’s infuriating to think that someone you hired, trained, and trusted could betray you. At Horn Wright, LLP, our business fraud litigation attorneys know the stress and frustration this causes, and we’re here to help you take back control. Whether you need to investigate, recover stolen assets, or take legal action, we’ll guide you through every step. The key is acting fast. Waiting too long could cost you even more.

The Ugly Truth: How to Investigate Employee Theft Without Losing Control

Identifying Red Flags in Employee Behavior

Not every thief gets caught in the act. Many hide their tracks well, making it crucial to spot the warning signs before losses spiral out of control. Keep an eye out for:

• Mysterious financial discrepancies – If sales number, invoices, or cash deposits don’t line up, it’s time to dig deeper. A sudden increase in transaction voids, duplicate payments, or missing receipts could indicate fraud. Pay close attention to employees who have control over financial records without oversight.
• An employee who never takes a vacation – Sounds hardworking, right? Or maybe they’re afraid time off will expose their wrongdoing. Many fraud schemes unravel when someone else temporarily takes over financial responsibilities. If an employee resists taking breaks, there may be a reason they don’t want anyone else looking at their work.
• Unexplained lifestyle changes – If someone suddenly starts driving a new car, wearing expensive jewelry, or taking lavish trips, and it doesn’t match their salary, ask questions. A drastic upgrade in their personal life without an apparent source of additional income can be a major red flag. While a raise or inheritance is always possible, don’t ignore the signs.
• Odd working hours or excessive access to sensitive data – Frequent late nights at the office, unauthorized logins, or unusual file downloads could mean someone’s up to no good. Employees committing fraud often work outside of regular hours to avoid detection. Review security logs and access records to track unusual patterns.
• Whispers from coworkers – Employees often notice shady behavior before management does. If rumors are circulating, listen. Small comments about a coworker living beyond their means, frequently mishandling cash, or acting secretive with financial reports should not be ignored. Many fraud cases are uncovered because an employee trusted their gut and spoke up.

If these red flags sound familiar, it’s time to take action.

Conducting Confidential Internal Investigations

Jumping to conclusions could backfire, but ignoring the problem could make things worse. Here’s how to investigate theft without losing control:

Start gathering evidence quietly. Review security footage, audit financial records, and document inconsistencies. The more documentation you have, the stronger your case will be. Look for patterns rather than isolated incidents, as consistent irregularities often point to long-term theft.

Keep it on a need-to-know basis. You don’t want office gossip tipping off the suspect. Limiting information to key personnel helps maintain control of the situation. The fewer people who know, the less chance the employee will try to cover their tracks or destroy evidence.

Interview employees the right way. Ask open-ended questions and pay attention to their body language. Instead of making accusations, frame questions in a way that encourages employees to share information. Subtle nervousness, contradictions in their responses, or defensive behavior can indicate dishonesty.

Consult with an attorney. You need to ensure you’re handling this legally. One wrong move could mean a wrongful termination lawsuit. An attorney will help you navigate New York labor laws and ensure you don’t violate employee rights while conducting your investigation.

Decide your next move. If you confirm theft, figure out whether to recover assets, terminate employment, or take legal action. Consider the severity of the theft, the impact on your business, and whether pursuing legal action is the best course. A lawyer can advise you on the best strategy, whether it’s pressing criminal charges, filing a lawsuit, or negotiating a restitution agreement.

Take Back What’s Yours: Recovering Stolen Money and Property

Legal Procedures for Asset Recovery

Losing money to employee theft is bad enough. Getting it back shouldn’t be a nightmare. You’ve got options:

• File a civil lawsuit. You can sue for stolen funds, damages, and even legal fees. This is often the best course of action when theft is substantial, and the employee refuses to take responsibility. Courts may award not just the amount stolen but also additional damages for the harm done to your business.
• Push for a restitution order. If the employee faces criminal charges, the court may require them to pay you back. Restitution orders are legally binding and ensure that the thief takes financial responsibility for their actions, which can help you recover losses faster than a drawn-out civil lawsuit.
• Garnish their wages. If they still have a job elsewhere, you may be able to take a portion of their paycheck. Wage garnishment can be a useful tool for recouping losses over time, especially if the stolen amount is significant. However, this process requires a court order and compliance with state regulations.
• File an insurance claim. Some policies cover employee theft. Check yours to see if you qualify for reimbursement. If your business has coverage for internal theft or fraud, filing a claim can help you recover stolen funds without having to go through lengthy legal battles.

Negotiating Voluntary Returns vs. Legal Action

Sometimes, confronting the employee with evidence is enough to get your assets back without going to court. If they admit to theft, you might work out a repayment plan. But if they deny everything despite clear proof, legal action may be the only way forward.

• Small losses? A quiet repayment plan may be faster and less costly. If the employee is remorseful and willing to return what was stolen, negotiating a settlement can save time and legal fees. However, ensure that the agreement is legally documented to avoid future disputes.
• Larger-scale fraud? A civil suit or even criminal charges might be necessary. When theft is significant, a lawsuit ensures the employee is held accountable. Criminal charges can also deter others from attempting similar fraud in the future.
• Multiple victims? If other businesses have been hit, working with law enforcement could increase your chances of justice. Organized or repeated theft may indicate a pattern of criminal behavior. Reporting the crime and collaborating with authorities can help prevent further losses and bring the perpetrator to justice.

Take Action Now: Protect Your Business with Horn Wright, LLP

Every day you wait, your business could be losing more money, more trust, and more stability. At Horn Wright, LLP, we take swift, decisive action to help business owners like you fight back. We uncover fraud, recover stolen assets, and hold dishonest employees accountable.

If you suspect an employee is stealing, don’t hesitate. The longer you wait, the harder it becomes to get justice. Contact us today, and let’s put an end to employee theft before it costs you even more.