Hire and Rental News - May 2018

INDUSTRY in FOCUS kydeck’s owner, Leo Kriticos said a former employee is now in gaol serving previous charges of fraud and is also facing charges of fraud against his company. Since the businesses' loss, Leo has thoroughly reviewed his business practices and now has implemented strict monthly accounting procedures to ensure nothing like this can ever happen again. He wants to warn all hire industry members to beware employee misconduct and of the need to establish business practices to safeguard businesses from employee theft. Leo said it all began in 2016 when circumstances dictated he needed to work in the field, rather than the office. He left an office manager in place and provided access to all accounts so invoices could be paid. Leo said it started small with invoice payment details changed to the employee's own bank account details. So when he approved payment of an invoice to a client, his employee was actually paying themself. “The employee started stealing $5,000– $10,000 a month and little things like tools and harnesses would disappear on a regular basis,” Leo said. Leo and his fiancé went on holiday and when he returned to work, realised about $30,000 worth of tools and equipment had gone missing. He reported it to the police who required proof of purchase before they could begin to look for the stolen equipment. Leo’s fiancé, Tenaya, went through the accounts records to find proof of purchase information for police reports, but while Tenaya was reviewing the accounts, she noticed discrepancies in the figures. “Tenaya realised suppliers were entered into the accounting system with different bank details and dates to the invoices that had been approved for payment. Employee fraud: a cautionary tale With up to $88,000 lost to employee embezzlement, $40,000 lost to business sabotage and close to $1m in lost business as a result of loss of operating finance, Brisbane based Skydeck Australia offers a warning to all HRIA members to review business policies and procedures to protect against employee and workplace theft. “When Tenaya tried to query the discrepancies with the relevant employee, the employee said they were sick and not available.” It was also around this time Leo had calls from a client who queried why Skydeck hadn’t paid their bill. Leo said it was confusing because he clearly remembered authorising payment for that client and sighting the approved invoice. When Leo checked details on the bank accounts invoices had been paid into, the client confirmed it was not their account. Leo immediately suspended the employee he suspected may be responsible and looked deeper into the situation. It was at this time Leo involved Channel Nine's 'A Current Affair' program who televised a story on the Skydeck case. Deliberate sabotage Leo said he was amazed to realise the former employee had also deliberately set about sabotaging his business. “We believe after stealing money and assets from employers, our former employee liked to try and send the company into bankruptcy so they could not pursue the employee further. “We discovered our employee had been subtly undermining our business operation. For example: the employee had failed to renew our vehicle registrations; changed all our vehicle registration details with GoVia (the Queensland e-tag system for road tolls); not to mention annoying our customers when their invoices remained unpaid. “We received about $8,500 in fines for having unregistered vehicles on the road; we had about $10,500 in fines for unpaid road tolls; and we incurred about $7000 – $10,000 in late fees from our suppliers. “All in all, it came close to $40,000 in purposeful business sabotage,” Leo said. The damage doesn’t end there either. Before they left, the former Skydeck employee also completed detrimental computer sabotage and hacking which cost the company another $5,000. Continued on p26.. S 24 HIRE AND RENTAL NEWS • MAY 2018 Skydeck warns employee fraud and theft is more prevalent than business owners think

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