Internal Fraud in Workers’ Unions—Theft of Member Funds Staggering
Think internal fraud in workers’ unions is not a problem? Think again!
- In what is being called the largest union embezzlement in American history, the trusted administrator of this union’s benefit funds was indicted on charges of embezzling over $40 million.
- This fraudster was found guilty of embezzling over $24 million from various labor union pension plans.
- A former benefit fund manager for this union pleaded guilty to embezzlement and mail fraud. He admitted embezzling $341,000 from the union,
No matter how trustworthy you perceive your workers—there is always the possibility of internal fraud in workers’ unions. However, you can reduce your risk to internal fraud in workers’ unions:
1) Recognize the Threat: Those in charge must recognize that internal fraud in workers’ unions is a possibility. The profile of an employee who commits these crimes generally holds a position of trust, has the greatest opportunities, is least suspected, and has little or no supervisory oversight.
2) Job Applicant Process: Controlling internal fraud in workers’ unions starts at the initial hiring point. Risk can be reduced by conducting a thorough background and credit history check.
3) Multiple Tasking: One of the most effective measures to prevent acts of internal fraud in workers’ unions is to not give a single employee the ability to affect every stage of a critical work process.
4) Supervisory Oversight: Proper supervision is necessary to ensure that adequate internal controls are in place and enforced. Spot-checks send a message of alertness and increase the chance of detecting internal fraud in workers’ unions.
While these strategies will help to deter internal fraud in workers’ unions, you are encouraged to read Business Fraud: From Trust to Betrayal to learn much more about ways to prevent internal fraud in workers’ unions.