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Bank Employees Steal More Than Robbers, Statistics Show

January 14, 1986

MIAMI (AP) _ Federal statistics indicate that bank employees stole $382 million in 1984, nine times more than bank robbers, and experts say that’s only one example of increasing worker thefts which may cost businesses more than $1 billion yearly.

Up to 75 percent of the 119 bank failures last year may have been prompted by fraud and embezzlement, said Caridad Matthews, associate deputy U.S. attorney general.

″It seemed, superficially, to be a case of bad management,″ he said. ″But as the FBI looked into it, they realized (embezzlement) was a problem.″

In Florida, the FBI solved 319 cases of bank fraud and embezzlement in 1983, The Miami Herald reported Monday. The next year, they solved 509 such cases.

Banks aren’t alone with these losses, industry experts say. Employee theft is far more serious a business liability than shoplifting and burglary in the retail industry. Insurance companies paid out $344 million in 1984 on employee theft claims, nearly double the amount they paid out four years earlier, said Robert Hepburn, vice president of the Surety Association of America.

And insurance claims represent no more than 20 percent of actual worker embezzlement, Hepburn said. He estimated worker theft costs more than $1 billion a year.

″It’s a national problem,″ said Jerry Kenna, president of Profit Protection, a Miami security consulting firm. ″The averages at banks parallel other businesses, and I don’t mean just retail businesses.″

In the end, white-collar crimes cost consumers, analysts say.

″It’s becoming a real item of expense,″ said Melvin Kann, internal auditor for Southeast Banking Corp. ″The only option is to pass those costs on to the consumer. And we not only must prosecute the large guys, but also the real costly small guys, who make up the biggest share of the problem.″

Banks and savings and loan associations get hit hardest by in-house losses, which usually occur at teller stations and in the lending department, The Herald reported.

In the past four years, insurance for financial institutions has tripled.

Meanwhile, employees with sticky fingers are more often simply fired than both canned and prosecuted. The Herald reported that they may end up with similar jobs at different companies.

To combat the crime, companies are using polygraph tests on new employees, instituting new controls and are often more eager to prosecute. In November, U.S. Attorney Leon Kellner announced a ″fast track″ program for prosecuting bank fraud and embezzlement.

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