For the Love of Money

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For the Love of Money
Fraud Triangle
First Epistle to Timothy in the New Testament (1 Timothy 6:10) starts "For the love of money is the root of all evil
“In God We Trust”
What Causes People to Steal:
You can be heart broken.
You can be broke.
But never be heart broken and broke at the same time.
Fraud/ LoveTriangle
Need can be either real or perceived. An individual
might feel the need for a luxury car or vacation home.
There might also be more pressing needs, like a house
payment or credit card bills.
Opportunity arises when someone is given control
over funds without proper supervision. This could
happen in many ways, such as requiring only a single
signature on a check, allowing credit card purchases to
be approved by the person who is using the card or not
maintaining strict controls over which vendors are
used.
Fraud/ LoveTriangle
Rationalization is another critical aspect of the decision
to commit fraud. Most people do not have an innate
desire to steal and individuals who do so often convince
themselves that circumstances justify the crime.
Rationalization may take many forms. In some cases,
an individual may justify workplace theft by thinking
the money can be paid back later. Often persons
committing fraud think they are somehow “owed” the
money they take and therefore their crimes are
justified. A thief might also rationalize by arguing that
the organization is wealthy or wasteful, therefore stolen
money won’t be missed.
Fraud/ LoveTriangle
Realizing that fraud can happen at any level of
government, it is important to conduct a risk
assessment of your operation to find out where internal
controls may be weak. This would include looking at
your policies and procedures to determine if internal
controls and monitoring procedures are strong enough
to deter and detect fraud in its many forms.
Even with the best prevention methods, fraud and theft
can still occur, which is why detection measures are
critical as well.
What Causes People to Steal:
Opportunity
The phrase “crime of opportunity” does have a basis in actual statistics. When a person
sees an opportunity to commit a crime and gain an instant reward (such as a laptop
sitting on the seat of a locked car), the chances increase that they will take that
opportunity. Now, this isn’t to say that every time a person sees an opportunity commit
a crime, that they will do it – it should simply be regarded as a contributing factor.
Poverty
Many people believe that crime rates are affected by the state of the economy. In our
post, “Do Crime Rates Increase During Hard Economic Times?“, this topic was
explored a bit more in-depth. However, a person’s level of poverty can have an
influential effect on how likely they are to commit a crime. For example, if a man is
having trouble making enough money to feed his family, he may resort to crime as an
attempt to provide for them. If an individual has fallen on hard economic times, they
may see theft as an easy way to make some quick cash.
Anonymity
One of the most commonly cited factors that influences the likelihood that a person
will commit a crime is anonymity. When an individual believes that they can commit a
crime without getting caught, they are much more likely to steal. The fear of being
exposed during a criminal act may be the sole factor that prevents a person from
committing a crime.
Some Ways Employees May Be Stealing:
Under-ringing of sales and the tearing up order tickets are two longtime scams
in the food and beverage industry. An employee serves a customer in the
restaurant, and the customer pays the check at the meal's end, but instead of
putting the money and ticket in the register, the employee tears up the order
ticket and pockets the cash. The restaurant owner has no record of that order or
money tendered. Or an employee sold something for $17.50," and rang in
$7.50 The employee put the $17.50 in the register and at the end of the night,
would pocket the extra $10.00. Since the cash in the register drawer would
match the transactions listed on the register tape, the theft would not be known
Voided sales - the cashier voids the check or some of the items
on the check and keeps the proceeds
Over-rings - the cashier records an "over-ring" to reverse an actual sale.
Cashier records sales on the training key which does not feed into the cash
register's daily or cumulative sales total.
Cashing hot check for friends.
Some Ways Employees May Be Stealing:
Running the credit card through twice.
Returned drinks - bartender claims that a drink was returned
when in fact it was sold and pocketed the money.
Servers padding their checks with small amounts or using the same check over
and over using a common order. They may even give a verbal check and
pocket the money
Produce surplus food so that it can be taken home.
Employee steals and uses gift certificates (for example, they might take a two-forone coupon and attach it to a guest check for which the customer paid cash and
take the cash).
Some Ways Employees May Be Stealing:
Food theft or taking home supplies and employees giving food to their friends.
Bartenders may bringing their own bottles and pocket the sales
from them. Since they are using their on inventory, food costs
and sales will match up. '
Phony paid-outs - (paid outs are amounts taken from the till to pay for food
deliveries and other miscellaneous charges.
Staff leaving early and coming in at a later time to clock out.
Use the phone for long-distance calls.
Some Ways Employees May Be Stealing:
Customers will sometimes steal silverware, condiment bottles, salt & pepper
shakers and tips that are allowed to sit in plain sight at empty tables.
Employee steals cash and records it as "cash short."
Revisit the restaurant during closed hours and steal whatever is available.
Steal supplies , detergent, linens, paper towels, toilet paper, etc.
Borrow the manager's keys and duplicate the void key, then void out entire or
partial sales and pocket the money.
Ethics Orientation for State Officials
Incompatible Activities of State Officers and Employees
A person may not act in an official capacity to regulate his or her private activity. For example, an
employee who reviews license applications may not review his or her own license application.
Receiving anything of value from a person who is seeking to do business with the official’s agency where the
item of value could be reasonably interpreted as having been intended to influence the official is prohibited.
Persons who wish to influence government often seek to do so by bestowing gifts of food, drink, entertainment
and similar favors on officials. Unlike the Political Reform Act, which limits the amount of gifts, this provision
focuses on the circumstances surrounding the gift and whether it reasonably appears that the purpose of the gift
was to influence the official.
Section 19990 does not establish any particular penalty for violating an Incompatible Activities Statement.
However, civil service laws specifically provide that violation of an Incompatible Activities Statement can result
in disciplinary action against civil service employees. Violation of an Incompatible Activities Statement also may
constitute a violation of other laws as well. For example, using state resources for private gain may violate other
provisions of the Government Code and Penal Code provisions.
Remember These Points
Examine your agency’s Incompatible Activities Statement to be sure you are not in
violation of any of the provisions. Following is a list of important points.
Use of State or Government time, resources and prestige for private gain is
prohibited.
Acceptance of a gift is prohibited if it is intended to influence or reward the official,
and it is from a person doing business with the agency or regulated by it.
Violations may result in personnel, civil or criminal sanctions.
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