You lock the doors to your business. You're insured against fires and floods. You teach safety, and warn your employees against taking unnecessary risks in the shop or in the field. But, what are you doing to protect your company against fraud?
Yesterday, we ran a news item on GlassMagazine.com about a six-year embezzlement scheme at Architectural Glass Art and Glassworks. The former chief financial officer of the businesses was indicted by a grand jury of stealing more than a half a million dollars from the companies, according to an Oct. 20 article from WLKY.com. The embezzlement was devastating to the companies, forcing executives to lay off employees and eventually turn Glassworks over to new ownership, officials said in the article.
"We trusted her," an AGA and Glassworks official said of the former CFO in the article. This rang eerily similar to something Gloria Hale, president of Hale Glass, said to me last year during an interview about the embezzlement that occurred at her company. "If I was listening to this story last year, I would have said 'that would never happen to me. I have a trusted employee handling money,'" Hale said in the interview.
With all the pressure glass companies are under in this market, I imagine business owners have less time and energy to spend monitoring activities inside the company, keeping alert for fraud. Hale offered some tips to other glass company owners that we published in the December 2010 issue of Glass Magazine. Take a look to make sure you are protecting yourself by instituting policies and procedures at your company that make embezzlement impossible.
This news story about AGA and Glassworks came on the heels of an email I received from a glass shop owner about a different, but equally dangerous, type of fraud—ordering scams. I've spoken about this topic many times during the last four years, like here and here, for example. However, I think it needs to be reiterated frequently, particularly since I receive regular emails from business owners in and out of the industry saying they've been targeted. (And I've received a number of fraudulent orders myself). These scammers are out there and constantly pursuing businesses. Do your customer service reps and sales employees know the red flags for fraud? If they (or you) need a refresher, here they are.
If you have any other tips, or if you want to talk about fraud (or being the target of fraud) at your company, please comment below or send me an email.
Devlin is senior editor for Glass Magazine. Write her at email@example.com.