Employee Theft & Fraud

Based on EPIS, Inc., past successful investigative techniques, we are often able to expose careful hidden and difficult to detect fraudulent claims. Incorporating EPIS, Inc's exclusively structured interview process in the investigative services; it provides not only additional information, but a more complete summary to the investigation. Using our multi-dimensional approach to these issues, EPIS, Inc can more effectively solve these business problems and minimize exposure to loss.

Issues commonly trouble businesses today include:

  • Drug and Alcohol Abuse
  • Embezzlement
  • Management Fraud, Dishonesty, and Incompetence
  • Employee Fraud
  • Other Brach of Trust and Fiduciary Issues
  • Product Diversion
  • Theft of Proprietary Property or Information
  • Brides and "Kick-backs"
  • Conflict of Interest

Above are the list of investigations approach to solving these problems and eliminating the threat of litigation to businesses.

Did You Know

In today's industry employee, fraud is on the rise, from $350 billion in 1997 to an estimated $778 billion in 2004. Insurance Fraud is the second most costly white-collar crime in the our industry

Red Flags of Internal Fraud

Background of the perpetrator:

  • Excessive gambling or investment habits
  • Strong challenge to beat the system
  • Undue family pressure such as divorce
  • Overwhelming desire for personal gain
  • Jealous about the success of others
  • Is experiencing financial difficulties, or has a high debt load
  • Has close personal relationships with customers and vendors
  • Brags about winning money gambling
  • Secretive about their work
  • Previously involved with issues of dishonesty
  • Avoids taking vacation or sick time
  • Insists on performing tasks that could be and should be performed by others
  • Appear to be living beyond their means
  • Recent change in lifestyle
  • Feels their pay is not commensurate with responsibility
  • Recently demoted, received disciplinary action, or believes their job is in jeopardy
  • A wheeler-dealer attitude
  • Employee, or spouse, involved with a privately held business
  • Unconfirmed suspicions about a drug or alcohol problem

Profile of the victim business:

  • Lack of segregation of duties
  • Lack of physical safeguards
  • Lack of independent checks
  • Lack of proper authorization on documents and records
  • System permits overriding of existing controls
  • inadequate accounting system
  • A company with 100 employees or less
  • Has never taken any action to protect the company from internal theft
  • Has not punished past acts of dishonesty
  • Poor internal controls:
    • Does not monitor scrapped products or materials
    • Employee posting cash receipts and accounts receivable responsible for collecting same

Line of attack:

  • False disbursements
  • Kiting
  • Skimming
  • Improperly posting credits
  • Borrowing against accounts receivable
  • Creating fictitious receivables
  • Lapping
  • Diverting or reselling scrap and excess materials
  • Altering documents
  • Concealing or destroying evidence
  • "False exculpatory" (lies)
  • Voids and under-rings
  • Swapping checks for cash
  • Creating fictitious refunds and discounts
  • Charging theft to inventory

Red flags:

  • Increased number of adjusting journal entries
  • Shipping documents not matched to sales reports
  • Expenses charged to petty cash have risen dramatically
  • Cash refunds or charges to petty cash made without proper documentation or approval
  • Incomplete or false customer information
  • Sequentially number receipts or invoices are missing
  • Employees receiving gifts from customers or vendors
  • Inventory counts are altered to match perpetual inventory
  • Inventory shortages cannot be explained
  • Differences in the physical and perpetual inventory charged to cost of sales
  • False credits to inventory to conceal unrecorded or understated sales
  • No source documents to justify inventory write-offs
  • Returned merchandise not returned to inventory
  • Unverified write-offs to accounts receivable
  • Sales reports not matched to shipping documents
  • Customer always waits for favorite employee to serve them
  • High number of altered or voided transactions

Business operations:

  • Shortages in inventory cannot be explained
  • Variances in general ledger accounts cannot be explained
  • Vertical analysis of profit and loss is unusual
  • Increased cost of sales without explanation
  • Diminishing cash and cash flow
  • Increased accounts payable and receivable
  • Increasing reclassification of income and expenses

Investigating suspected fraud:

  • Protect any evidence (records) that could be destroyed
  • Move quickly and quietly
  • Retain competent, experienced counsel, certified fraud examiner, and auditor
  • Do not believe the perpetrator will ever tell you the entire truth
  • All employees involved with the dishonesty should be interviewed without notice
  • Organization should decide upon the penalties, termination? Prosecution?
  • Do not react emotionally
  • Do not reveal your suspicions to the perpetrator(s)
  • Do not change operational procedures until suspicion is confirmed
  • immediately protect Fidelity Insurance Coverage

Detection of fraud:

  • Investigate all customer complaints
  • Where segregation is not possible, diligently monitor
  • Require two signatures for payments over a specified amount
  • Insist the bank return canceled checks
  • Insist two people reconcile bank statements
  • Create the perception of detection
  • Compare receipts with deposits
  • Reconcile all accounts monthly (entries and canceled checks)
  • Review unusual endorsements on checks
  • Perform surprise cash counts
  • Compare credit memos by period
  • Match shipping documents, sales invoices, and customer orders
  • Match deposits between accounts
  • Use the computer to analyze: missing invoices by number, numerical sequence of documents, sales volume by employee, or returned merchandise by employee
  • Segregate incompatible duties, custody of assets and accounting for assets, and control over revenue and expenses
  • Require authorization for disposing of assets
  • Purchase Fidelity Coverage Insurance

Summary of the perpetrator:

  • The theft was easier to commit after the first time
  • The theft has been continuous
  • Is currently experiencing a high level of stress (concern for the consequences)
  • Most frequently it is the person you trust the most
  • Has the technical skills to pull off the theft secretly
  • The activity is clandestine
  • The activity violates the employee's fiduciary duties to the organization
  • Initially, they intended to repay the money "borrowed"
  • In the beginning, they usually kept track of the theft
  • Recognizes they will never be able to repay the money
  • The stolen assets are rarely recovered

Client Reviews

Empire Pacific Investigative Services

4.8

Based on 88 reviews

Kim J.
My Son found Mike at Empire Pacific because we needed a detective in order to find someone. We had spend a lot of time and money on many search people websites and never found anything current on the person we were trying to find. We hired Mike to do an initial check to find the person. Mike called and said on the initial check that he had found what we needed, he said the second step would be to go look by foot and there would be a fee per hour. About 2 hours later Mike called and told us he had found the person and gave me his current phone number. I called and sure enough it was the person I was looking for. Now this shows how honest Mike is because he could have easily billed me for a few extra hours of leg work (which is paid per the hour) and I would not have known he already found the person. Mike was very attentive when I called and either picked up his phone or called me back very fast. I would highly recommend Mike, he is vey good at what he does and is respectful, honest and FAST!
Agustin C.
Mike Hakimi from EPIS is a true professional. He helped me with my case. He delivers effectively and fast! I was trying to find someone that nobody has heard from him from since the late 90's, I was very unsure he was still around. I needed to find him and interview him for my movie project. A key character. And Mike incredibly found him. Don't hesitate hiring Mike for any type of service.
Shera C.
Very pleased with Mike and his staff. Thank you for handling this surveillance case on such short notice. I was very pleased with your services and will do biz again with you for sure. I will be in touch:) 5 Stars!!!
Lance R.
Mike and his team are as professional as it gets. Very prompt to reply and understand the finesse needed in this service. I appreciate his expert feedback and how to best proceed in the most efficient way possible. Thank you again!!!

-LRR
Yossi S.
I have highest, highest praise for Mike at Empire Pacific Investigative Services. I had to take someone to court and I was concerned whether sheriff is efficient enough to do the serving or they will just attempt and I pay for nothing. I talked to Mike about serving this particular person and on top of it I try to force future steps of collection and Mike was extremely helpful to show me in and outs of all the options that I have and how he can help me.

My concern was the person that I am suing would play hide and seek, not available during the day and difficult to catch. Sure enough Mike served the paper within 2 to 3 days and informed me accordingly.

I am so happy to know Mike and would not hesitate to recommend him to anyone that has needs for his services.
Kevin O.
I was searching for a family relative, for over 40+ years with no such luck. So I decided to find a private investigator. I contacted Mike at Empire Pacific Investigative Services and in the same day he found the person I was looking for easily. I was so blown away! This service is AAA+ and I would definitely use them again, again and again! Thank you Mike!
Deborah O.
Top notch experience with Empire and Mike!
No lag time or waiting around. He gave me the difficult diligence I needed within the week.
Professional, friendly and available whenever I need the.
Prompt response time and easy to reach!
Thanks Mike! I'll be using your services again. Wouldn't go to anyone else!

Deb Olberding
Magda S.
I had very good experience with Empire Pacific Investigative Services, Mike was very determined and efficient, detail oriented and reliable. His work effect exceeded my expectations.
Yossi S. Los Angeles, CAV
0 friends
4 reviews

11/20/2017

I have highest, highest praise for Mike at Empire Pacific Investigative Services. I had to take someone to court and I was concerned whether sheriff is efficient enough to do the serving or they will just attempt and I pay for nothing. I talked to Mike about serving this particular person and on top of it I try to force future steps of collection and Mike was extremely helpful...

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Agustin C. Los Angeles, CA
10 friends
3 reviews

4/26/2018

Mike Hakimi from EPIS is a true prfessional. He helped me with my case. He delivers effectively and fast! I was trying to find someone that nobody has heard from him from since the late 90's, I was very unsure he was still around. I needed to find him and interview him for my movie project. A key character. And Mike incredibly found him. Don't hesitate hireing...

read more…
Marcus B. Ewa Beach, HI
32 friends
86 reviews

2/27/2018

I contacted Mike at Empire to do some research for me on an old insurance claim. It ended up not being along the lines of work that he was an expert in but what was so great about the experience was that Mike went out of his way to find me someone that did specialize in the area. If you are considering a couple options on who you need for your investigation you...

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Magda S. New York, NY
27 friends
2 reviews

3/21/2018

I had very good experience with Empire Pacific Investigative Services, Mike was very determined and efficient, detail oriented and reliable. His work effect exceeded my expectations.

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Shera C. Orange, CA
8 friends
24 reviews

2/27/2018

Mike's firm is awesome. I gave them short notice to conduct surveillance and they totally delivered. Thank you and your staff for handling this assignment for me on such short notice...

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Jonatan C. Chatsworth, Los Angeles, CA
0 friends
8 reviews

8/25/2017

I have worked with a few private investigation firms, and in my opinion, Empire Pacific Investigative "Mike Hakimi" is the best one...

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