Expense and Payroll Fraud

Claiming Bratwurst and Caviar as Business Expenses

Unless a flat-rate per diem arrangement has been agreed upon, every business trip and business meal requires a precise expense report, ensuring that the travelling employee is reimbursed for additional costs incurred through work. Usually, the difference is reimbursed based on the actual amount of meal, accommodation, and travel expenses, as well as any other relevant items, alongside the usual costs for food and drink at the workplace. As it can sometimes be difficult to itemise every expense down to the last detail, errors and negligence can occur, particularly if the employee or accounting department is not meticulous. However, if the off-site employee deliberately manipulates expense reports – for example, claiming a fancy candlelight dinner with their fiancée as a work meal with colleagues – this constitutes fraud under § 263 of the German Criminal Code (StGB). Expenses are reimbursed tax-free, which may increase the temptation for small “errors” at the company’s cost; after all, “it’s just a small amount” – as many expense fraudsters likely believe.

 

Our detectives in Bonn (+49 228 2861 4084) regularly track such fraudulent employees as soon as company or HR management contacts us regarding inconsistencies in their staff’s expense reports.

Typical Perpetrators: Field Staff and External Contractors

The risk of expense and payroll fraud is particularly high among field sales personnel and also among external service providers, suppliers and subcontractors whose activities are difficult for the company to verify. Unlike employees working on-site, it is often not apparent exactly what has been consumed or ordered at the company’s expense and in what time frame which tasks have actually been performed. Trust from employer to employee must exist in these cases, and it is therefore easily abused by disloyal employees acting in their own interest. Frequently, fraud and contradictory claims only come to light months or even years later and are thereby difficult to reconstruct and, consequently, hard to pursue in court.

 

Eyes and ears open are therefore essential in every company to identify and hold the bad apples to account. Our experienced private detectives in Bonn assist you here; they investigate at the first justified suspicions and also retrospectively where submitted claims appear suspicious: kontakt@kurtz-detektei-bonn.de.

“The Company Thanks You” | A Distorted Work Ethic

The attitude of many field staff and employees on business travel is “no claimant, no judge”, because they believe the proverb “out of sight, out of mind” also applies. All too often they are right – but whoever overdoes it will sooner or later be caught, and the company’s eyes will then quite literally be our corporate detectives in Bonn. Often, the performance of contractually agreed working time, which should be self-evident, is felt to be “extra work”, a favour to the employer. A consciousness of wrongdoing is lacking when claims are embellished or forged. The employees concerned imagine themselves to be in the grey area of the misapplied notion of a “victimless” misdemeanour (“everyone does it”) or even in the right when miles driven are conspicuously “rounded up”, repair work on their private car is presented as business expenditure, or private taxi journeys and restaurant visits are claimed as company costs.

 

All these and many other examples of false claims not only destroy the precious trust between management and staff, but are by no means trivial; quite simply, they constitute fraud. In serious cases the Criminal Code provides for imprisonment from six months up to ten years. Deploying our detective agency from Bonn can not only lead to catching the suspect(s) in the act and bringing them before the courts, but also, by starting investigations at an early stage, prevent further damage to the company.

Deterrent Effect through Detective Deployment

The more detailed and comprehensive a company’s rules on expenses and other claims, the more difficult it becomes to commit fraud undetected. Accordingly, risk and inhibitions rise and a deterrent effect sets in. The importance of precise regulations and functioning control mechanisms must not be underestimated. After all, payroll and expense fraud cause damages in the millions every year, although precise figures are hard to obtain because companies naturally have little interest in publicly disclosing how often and how easily they have been duped by disloyal employees. Moreover, the exact amount of loss becomes increasingly difficult to reconstruct the longer the period since the offence or the longer the duration of the fraudulent activity. Wherever possible, other employees should not be informed that colleagues have been able to enrich themselves through false claims – unless management succeeds in setting a deterrent example. This may include immediate dismissal on the basis of the court-admissible evidence collected by our corporate detectives in Bonn, a civil claim for damages against the fraudulent claimant and/or a criminal complaint for fraud.

Various Options for Retroactive Evidence-Gathering

In many cases of claim fraud it is necessary to produce forged documents in order to make the submitted receipts appear credible. This offence (Section 267 of the German Criminal Code) includes, for example, forged signatures, backdated receipts and altered sums of money, which allow a company, where appropriate, to take legal action even against an employee who has already left the company. This course of action is particularly relevant when the fraud is discovered only retrospectively. In such cases our Bonn private detectives can also assist – not by surveillance, but by conducting investigations and authenticity checks.

 

Our measures include, on the one hand, document analysis to verify originality by our forgery and handwriting experts and, on the other hand, enquiries into alleged client visits, hotel stays, restaurant visits and travelled routes. We visit the relevant places and persons and are often able to gather numerous witnesses. Plausibility checks frequently lead to strong further indications and thus valuable arguments in legal proceedings.

Inefficient Field Staff, Inconsistent Claims, Concrete Signs of Fraud? Kurtz Detective Agency Bonn Provides Case-Specific Help.

If you or your company’s accounts department have justified suspicions due to contradictory expense reports, tips from customers, employees or business partners, or other inconsistencies that suggest one of your staff—whether internal or external—is falsifying or embellishing their expense or hours claims, obtain free advice from our detectives in Bonn on the next steps in your case.

 

In consultation with you and according to your personal wishes, our private detectives will become active in the form of enquiries, surveillance, analyses, covert interviews, undercover placements within the company and much more to either substantiate your suspicions or to allay your concerns about the probity of the employee in question (the latter occurs far less frequently). Utmost discretion and professionalism are a matter of course for us. You can reach us on: +49 228 2861 4084.

Author: Maya Grünschloß, PhD

 

Kurtz Detective Agency Bonn

Zeppelinstraße 8

53177 Bonn

Tel.: +49 228 2861 4084

E-Mail: kontakt@kurtz-detektei-bonn.de

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