The results of a recently released report reveal a disturbing trend for which companies need to watch out. MNP LLP, an accounting and business consulting firm, reviewed the details of over 200 convictions for business fraud across Canada between 2012 and 2018. The results showed that Ontario had the highest number of fraud convictions of any province: 122 in total. The report did not indicate how many of these cases also resulted in civil business litigation.
What the report did reveal is that the targeted companies’ supervisors trusted the majority of the individuals who committed these crimes. The perpetrators were in positions of authority within the companies for which they worked. In many cases, they had the authority needed to cover up their transgressions. They could take funds directly from the company without their superiors knowing, often for extended periods of time.
What can employers do?
The report noted that even when people within the organization suspect a superior of fraudulent activity, they often do not come forward for fear of repercussions – especially if they are not believed. The report recommends allowing employees to anonymously report possible fraud in order to remove this fear. It may help organizations identify wrongdoing before a company’s losses reach into the hundreds of thousands – or even millions – of dollars.
If the evidence supports criminal charges, it may also be worth exploring whether the company can pursue restitution through Ontario’s civil courts. Business litigation covers a variety of topics, including employee fraud. Whether the matter can be worked out through an alternative dispute resolution method or ends up in court, preparation and solid evidence are key – especially since the individual who accused of fraud will more than likely have attempted to cover their tracks.