Employee fraud doesn’t just hit the bottom line, it damages trust, morale, and business confidence. For many business owners, the idea that someone they’ve employed could deliberately steal from them feels almost unreal – until it happens.
Whether you’re a small local operation or a larger enterprise, employee fraud is a real risk and being prepared can make all the difference.
In one of the most striking local cases, a long-term employee in Perth was charged with stealing more than $1.2 million from two separate companies over approximately ten years. The woman allegedly made hundreds of unauthorised transfers from her employers’ accounts into her own, with one business only discovering the issue during an audit.
The impact was serious.
- One of the businesses reportedly went into administration as a result.
- The company owners described a devastating breach of trust that affected employees and owners alike.
This isn’t an isolated act of dishonesty, it’s a reminder that fraud can occur quietly over time, especially when internal controls are weak.
Recent investigations and criminal actions show that employee fraud takes many forms.
- A long-serving Sydney consultancy employee allegedly used his former firm’s credentials to submit false tax returns, redirecting refunds into his own accounts.
- In other corporate fraud cases nationally, employees have siphoned funds through payroll manipulation, bogus invoices, or personal use of company credit cards, sometimes amounting to hundreds of thousands or even millions of dollars.
These aren’t small mistakes; they’re deliberate misguided financial actions that can leave businesses exposed.
Why fraud happens
Employee fraud isn’t only about greed. It can arise from:
- Lack of oversight
- Insufficient checks and balances
- Unclear separation of duties
- Trust without verification
In many cases, employers don’t realise there’s a problem until it’s already large, or until cash flow, tax reporting, or audit processes raise red flags. One business here in Perth only discovered the theft after hundreds of suspicious banking transactions were uncovered during a deep review.
Practical steps to protect your business
While you can’t eliminate risk entirely, you can dramatically reduce your exposure with strong internal controls.
1. Segregate Duties
Ensure no one person has full control over recording, authorising, and reviewing financial transactions.
2. Regular Audits
Carry out both scheduled and surprise audits of:
- Bank reconciliations
- Payroll records
- Expense claims
- Vendor payments
Frequent checks make it harder for fraudulent activity to go unnoticed.
3. Limit Access
Restrict system and payment authorisations so that only those who absolutely need access have it.
4. Automate Alerts
Set up systems that flag unusual patterns e.g., large transfers, changes to payee details, or frequent manual bank entries.
5. Encourage Reporting
Create clear channels for staff to report concerns confidentially. Sometimes the first hint of fraud comes from within the team.
Don’t wait for a crisis
Too many business owners assume “It won’t happen to us.” But fraudsters aren’t always outsiders, sometimes they’re people you trust every day with company finances. The case above is a stark reminder that internal breaches can be catastrophic, both financially and emotionally, when trust is violated.
Start reviewing your controls today, because detecting fraud early can mean the difference between a minor loss and a business-ending blow.
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