Tom Mattison is a 77-year-old business owner who thrives on giving. The military veteran volunteers his time helping his community and would give the shirt off his back to help a fellow Marine. What he doesn’t appreciate, however, is someone taking … from him … behind his back, which is what was happening to him for years.

Mattison is the owner of Tom Mattison Septic Service in Midway Park, just outside of Jacksonville, N.C. He’s been pumping, installing and inspecting septic systems and clearing drainlines in eastern North Carolina for five decades. He was not aware, however, that for at least six years his bank account was being drained while he was out jetting lines.

The story Mattison tells is as old as commerce itself. A trusted employee wrongfully takes something that belongs to his or her employer. Only when it happens in one’s own company, however, does a person really sit up and take notice. Mattison, who says his office manager skimmed $18,000 or more from his company, doesn’t want you to wait until it happens to you. He wants other pumpers and cleaners to learn from his experience.

How it happened

Mattison says an employee who worked in the office at Tom Mattison Septic for seven years was paying for manicures, plants, train tickets and other goodies for herself with the company credit card.

“I work out in the field,” Mattison says. “I can’t be in the office answering the telephone and doing all the paperwork. I need a trusted employee in the office and I thought I could trust her.”

After a second office worker was hired last year, the longtime office manager refused to share her computer passwords, which raised a red flag. Mattison became even more uneasy when the new person quit without warning, so he invited his daughter, a mortgage banker, to go with him to the credit union one Saturday morning and have a look at the business accounts. The following Monday morning Mattison and his daughter were waiting for the office manager at the door with a box of her personal belongings. She left without denying any wrongdoing, Mattison says.

Over the next several weeks Mattison, his daughter and the second office employee (who was persuaded to return to work) carefully went through the accounts, compiling stacks of evidence to share with a county sheriff’s department detective. The former office manager has been charged with felony larceny by an employee and the case is pending.

What’s disheartening for Mattison is that a person he had known and trusted for years committed this crime.

“I treated her like one of my daughters,” he says. “This came as a total shock to me.”

Mattison says he doesn’t expect to get his money back but he hopes his former employee gets some jail time, sending a message to others that they won’t get away with stealing from employers.

Tips for avoiding employee fraud

Office procedures have changed at Tom Mattison Septic because of the embezzlement incident. All passwords have been changed and Mattison knows the new ones. Here are a few other steps for any business to take to protect hard-earned revenue:

Limit the number of different credit cards issued in your company’s name. Credit card offers are hard to refuse, and saying yes to them can benefit a company by racking up airline miles and other rewards for using multiple credit cards. But having multiple cards makes keeping track of purchases more difficult.

Don’t entrust any one employee to all money-handling duties. Assign one employee to authorize purchases and another to pay the bills. More eyes on invoices means less of a chance for stealing.

Be observant. Make a mental note of changes in an employee’s lifestyle. Things like a divorce or a serious illness in the family may make a person feel desperate for money and tempted to skim from company funds. Often embezzlers tell themselves it’s “a loan” they’ll pay back, but then it snowballs out of control.

Also look for signs that an employee has a gambling problem or a drug addiction. Observing doesn’t mean accusing, of course. But if someone or something seems a little off, keep an eye on the books. Even small things can signal trouble. For example, if you know how much an employee earns and wonder how they can afford to go out for pricey lunches and drink Starbucks coffees every day, something might be amiss.

Other ways to protect your company

Dump the stamp or the computer signature. Mattison says he signs all checks personally now rather than having a signature stamp lying around or signing electronically.

Do random checks of bank and credit card statements and question even small purchases you don’t recognize. Thieves often test the waters with $5 and $10 purchases and then up the ante if no one catches on.

Consider bonding employees who will be making purchases or paying bills. A fidelity bond is employee-dishonesty insurance covering a business in case of employee theft or fraud. If a bonded employee embezzles, the payout received by the employer can be used to recoup some of the loss and to take legal action. Rates vary depending on how many employees are covered and the amount of coverage.

Don’t sign checks without seeing the corresponding invoice. And avoid signing blank checks.

Consider conducting criminal and credit checks on job candidates. Make sure this is legal in your state, however. Some states have outlawed this practice. And always check references before hiring someone. Often what a former employer won’t say speaks louder than what they will say.

Insist that employees use their vacation time. Often schemes reveal themselves when the employee involved is not there to keep up the ruse.

Work with your bankers. You may be able to provide them with a list of approved vendors so they can notify you if checks are written out to anyone else.

Look at statements from vendors over a few months’ time. If you notice that all invoices from a single vendor are in numerical order without skipping any numbers, you are their only customer, you are writing checks to a fictitious vendor or they have a strange accounting system they should explain to you.