Meetings Question Vault · Warning signs of fraud
How to spot the warning signs of theft and fraud in your committee, board or workplace, why organisations stay silent, and what to do first.
“The person most likely to be stealing from you is probably the one everyone trusts the most.”
The warning signs nobody wants to talk about
Read that quote again, because it’s the single most important thing I can tell you on this topic.
Dishonest people are clever. They know that the more they’re liked and trusted, the less likely they are to be suspected. So they work hard, often for years, building goodwill, loyalty and a shield of trust that makes them almost untouchable. And all the while, they’re helping themselves to what isn’t theirs.
What inappropriate behaviour actually looks like
Moving funds into accounts they control.
False invoices, and reimbursements claimed without receipts.
Payments to family members or their own businesses.
Takings from fundraisers that are never banked.
Manipulating rules or selection processes to benefit themselves or people close to them.
Withholding reports and information, bullying, and failing to identify or escalate risk.
If any of this is landing with a familiar feeling, trust your instincts.
So why don’t organisations speak up?
Nobody wants to admit they were taken for a ride by someone they trusted and championed. In hindsight the signs are almost always there. At the time, the offender’s carefully built reputation makes them nearly impossible to see. Then there’s fear of looking negligent, fear of reputational damage, fear of being blamed for not noticing sooner. So the easy path is to sweep it under the carpet and “put it down to experience.”
The leopard doesn’t change its spots.
Why silence is dangerous
The dilemma nobody prepares you for
Sometimes, when a person is caught, they offer a deal. Partial repayment. Information about other wrongdoing. A confidentiality agreement that ties your hands in exchange for getting something back.
It’s a genuine dilemma. Pursue justice through the courts and potentially recover nothing. Or accept the offer, and effectively set them free to do it again somewhere else.
There’s no easy answer. But there is a clear starting point: get proper legal advice before you agree to anything.
And be aware that even a confidentiality agreement doesn’t necessarily stop police pursuing an offender, although it may restrict what your organisation can give them unless a court compels it.
Before you do anything
Every irregularity, every suspicious transaction, every implausible explanation.
Lay it before a trusted colleague or legal adviser before you act.
Sooner rather than later, and before any deal or accusation.
The very last thing you want is to accuse someone who is innocent. Protect yourself and protect others, but don’t stay silent either.
The bottom line
Theft and fraud in organisations happen far more often than people realise. Most offenders get away with it precisely because good people feel too uncomfortable to act. If something smells wrong, seek legal advice sooner rather than later.
If you let it go, someone else will pay the price.
Please note: I am not a lawyer and this article is general guidance only. Always seek appropriate legal advice for your specific situation.
Questions
Funds moved into accounts one person controls, false invoices, reimbursements without receipts, payments to family or related businesses, cash from events not banked, rules bent for personal benefit, and reports or information being withheld.
Often the person everyone trusts the most. Offenders deliberately build goodwill and trust, because it makes them far less likely to be suspected.
Mostly embarrassment, plus fear of looking negligent or damaging their reputation. UK research suggests around 85% of organisational fraud goes unreported, which lets offenders move on to their next target.
Document everything, discuss it with a trusted colleague or legal adviser before acting, and get legal advice early. Avoid accusing anyone until you have the facts.
Don’t agree to anything without proper legal advice. A deal may recover some money but can leave the offender free to do it again. This article is general guidance only, not legal advice.
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