FRAUD IS NOT JUST SOMETHING THAT HAPPENS TO THE OTHER GUY, IT CAN HAPPEN TO YOU TO!

Ever hear stories of broker/owners losing tons of money because of fraudulent activity? Chances are someone in your peer group has had it happen to them. Whether external or internal, situations happen where someone tries to steal from you. This can range from something as simple as an agent not being charged for something to someone taking money from your bank account. Always trust your instincts…if it sounds wrong it probably is! Many a broker/owner has been fooled by a supposedly loyal employee who is stealing from them. Here are some of the signs to watch for:

• You ask questions and the answer doesn't make sense to you
• A staff member has gone through a personal crisis
• There are relationships between your staff and your agents

The following examples are True stories of Fraud for each of the above

• An administrator was writing checks to herself and manipulating information in the computer to cover it up. When the broker asked about the bank reconciliation that didn't seem to make sense, she said that the broker just didn't understand…$250,000 stolen from the trust account!
• A staff member's spouse came down with a terminal illness. After an extended period of time fighting the disease, life just didn't seem fair any more. This translated into the broker's lifestyle not seeming fair either…$62,000 stolen!
• An agent was dating the administrator in an office. The administrator was paying the agent out twice on deals, once this week and once next week…$95,000 stolen!

External fraud can also happen. Someone gets their hands on a check from your company and then fraudulently creates phony checks. Ask your bank if they have a Positive Pay Service. You transmit them a file each day of your checks issued and only a check that matches a number and amount is cashed. Check your bank reconciliations, review your financial statements, and stay vigilant!