Episode Details

Embezzlement is on the rise, but only a few incidents ever get reported to law enforcement. Why do people steal and how are they doing it? What can business owners do to help prevent these crimes and what should they do if they suspect them?

Our guest today is Kelly Paxton. She has more than 25 years of investigation experience and is a certified fraud examiner and private investigator. She started her career in law enforcement as a special agent for the US Customs Office of Investigation in 1993. She has worked white-collar crime, fraud, money laundering, embezzlement, and conflict of interest cases. Kelly is also the proud owner of Pink Collar Crime, a passion of hers about embezzlers in the workplace.

• [1:02] - Kelly has always been interested in money. She started her career in finance but had a client arrested for fraud. She then became interested in investigating why people steal money.
• [1:57] - Kelly's goal is never to put someone in jail. Her goal is to find out why the person stole the money and to hopefully see the money returned to the victim.
• [2:32] - Why do people steal money? Generally speaking, Kelly says most people will steal because they think that money will help them fix their problems.
• [3:51] - Most people are good people, but life happens, and most people think money fixes it.
• [4:11] - Embezzlement is stealing money from business. Kelly defines Pink Collar Crime as petty amounts stolen by low to mid-level employees, primarily women, from the workplace.
• [5:40] - In the 80s, this was a shift in thinking. Up until then, most people hadn't thought about embezzlement as a common crime.
• [6:17] - Kelly explains that in embezzlement cases, there is a lot of victim shaming. Due to this, only 15% of embezzlement cases are reported to law enforcement.
• [8:01] - Most victims like the employee and that is how the employee is able to steal. Trust is not an internal control.
• [8:46] - 60%, or 3 out 5, of all dentists have been ripped off.
• [9:13] - Kelly calls embezzlement "the crime of main street."
• [10:01] - Financial audits are not always when losses are noticed. Tips and hotlines are actually more effective in finding out about these problems.
• [11:06] - 90% of bookkeepers in the United States are women. Women push back against the title "Pink Collar Crime," but should be pushing back that women are in lower-level positions as a whole.
• [12:30] - Kelly shares an example of a woman who stole millions of dollars over 20 years. When she was arrested, she was exhausted because she could never take a vacation as she was afraid of being caught.
• [13:48] - Another warning sign is a control freak, especially when it comes to changing computer programs.
• [14:53] - The number one way people embezzle from the workplace is forged or unauthorized checks.
• [16:28] - It is never good to be ripped off, but there are good things that come from it, including connections with other people and lessons learned on how to manage the business moving forward.
• [18:36] - The principle doesn't pay the principal, meaning the principle of being ripped off doesn't pay the loss.
• [19:16] - At the end of the day, you have to get back to work. The money is replaceable. The trust is difficult to get over.
• [21:00] - Intuitively, you trust a coworker more than you trust a st