Crimes committed by employees of companies, known as internal crimes cause greater harm than crimes that are evident (external crimes) and covered under known criminal laws. Crimes committed by respected employees general termed “white collar or occupational crimes” are committed by individuals or a group of employees in the course of a legitimate occupation for their own financial benefit. Employees who commit this type of crime try to rationalize their offense by saying that since the company has so much money; it is okay to steal from the company. Even small companies can suffer devastating consequences because other employees might have the same idea.
When many employees are siphoning off small amounts of money, the total loss caused by these thefts can ruin the company. Company employees are trusted and regarded as assets, but over the years employees’ thefts in various forms have not only had direct impacts on company profits but also indirectly reduce it. Shrinkages, pilfering, fraud embezzlement are more serious concerns than robbery, burglary, and vandalism. External crimes can be prevented if non-employees of the company are prevented from entering the company premises or being able to access company information either electronically or physically. These unauthorized entries or accesses can detect, delayed and, denied and the same cannot be said for internal crimes.
Company employees have unrestricted access to premises and facilities for the performance of their jobs coupled with inadequate supervision by the management which increases theft, fraud, shoplifting, and embezzlement. Internal crimes are problematic and not easy to detect and punish because of company unwillingness to prosecute employees because it might damage the company’s reputation. This study will examine internal crimes, why employees steal and if internal crimes are easy to prevent. Although the employees are stealing from the company, they adopt an attitude of innocence as if they are doing nothing wrong.
Companies have to make up for such losses by increasing costs which results in consumers paying higher prices for the service/product and employees might have to face salary cuts or even the loss of their jobs. This ripple effect continues further because, with decreasing profits, investors or employees might not be able to pay off their loans, and it becomes much harder to obtain credit. When all these frauds become public knowledge, investors lose faith in the stock market and refrain from investing freely. Other employees also suffer life-shattering losses because scandals like Enron can wipe out their retirement funds