It often starts small — a missing check, a slight drop in bank deposits or a transaction that doesn’t quite make sense. But what looks like an innocent oversight may actually be a warning sign of something far more sinister: embezzlement.
Embezzlement can happen in any business — large or small. And it’s often committed by the person you trust most. That was the case years ago in my husband’s downstate medical practice, where “Diane,” a trusted lead secretary who always kept a Bible on her desk, quietly siphoned tens of thousands of dollars over the course of three years.
Diane handled the money: deposits, cash, and credit card transactions. She started with small amounts of cash — just to test the waters. When no one noticed, she got bolder. A few personal purchases appeared on the company credit card. Then more. Before long, she was using the practice’s card at Victoria’s Secret, the grocery store, the nail salon—even making her car payment with it.
As a busy physician, my husband assumed declining revenue was due to changing insurance reimbursements or increased overhead. But the real problem wasn’t economic — it was internal. Diane wasn’t acting alone, either. The bookkeeper was complicit and had set up two separate sets of financial records. Personal expenses were carefully disguised as business purchases.
I got involved in reviewing the records and was shocked at what I found. Over 200 pages of bank statements and credit card transactions revealed an elaborate scheme orchestrated by someone with only a high school diploma — but a criminal’s instincts. In total, the loss was around $80,000. While we couldn’t prove the entire amount, Diane was prosecuted and sentenced to probation. She’s still paying restitution—$100 per month—17 years later.
The memory of that ordeal came rushing back recently when we paid a Florida gutter installation company on time, but the business claimed they never received our check. We obtained a copy of the cleared check from our bank — there was no endorsement on the back.
Yet the company’s bookkeeper sent invoices with late fees and demanded that we pay again in order to avoid being charged $500 for collections. Only when I reached the owners directly did the issue suddenly vanish with a “Paid in Full” notice. It smelled fishy — because it probably was.
What’s the lesson here? Smart business owners are always on alert. They don’t leave the finances to just one person. They look for the unusual. They stay involved, ask questions, and make it clear that accountability matters.
If you own or manage a business, here are several tips to protect yourself from embezzlement:
Separate the financial duties. The person who handles cash or writes checks should not be the one reconciling accounts. Always have checks and balances in place.
Personally review bank and credit card statements. Don’t rely on someone else to catch anomalies. Reviewing statements monthly helps you identify red flags early — before the damage is done.
Conduct surprise audits. Unannounced financial reviews keep employees honest. They send the message that no one is above scrutiny and that hidden issues will be uncovered.
Modern tools like QuickBooks Online or Xero provide traceable histories of transactions, making it harder to hide or alter records without detection. So be sure to use accounting software with audit trails.
Require mandatory vacation time. Many embezzlers avoid taking time off because they know that if some else were to do their job for a week or two, their cover could be blown.
Watch for changes in revenue patterns. If your business income suddenly drops without explanation, don’t assume it’s the market. It may be time for a deeper dive into the books.
Most importantly, set the tone from the top. Employees are less likely to steal from an owner who’s engaged and attentive. Be present. Ask questions. Make it known that you’re involved.
Embezzlers count on being overlooked. They test boundaries. If no one is watching — or asking questions — they push further. But business owners who build transparency and oversight into their operations can stop fraud before it ever starts.