Employers on lookout for fraud

By Stephanie Armour
USA Today

Cost-cutting employers are increasingly scrutinizing workers' phone calls, corporate credit-card charges and expense reports.

Often, they're getting an eyeful:

• Investigations by inspectors general and the General Accounting Office have found hundreds of thousands of dollars in credit-card abuses by government workers.

  A May GAO report warned of "a lax control environment" that led to fraud and abuse. Workers used credit cards for online porn visits, Louis Vuitton purses, a home stereo system and a car engine.

• A former secretary at New York-based Bear Stearns pleaded guilty this year to using erasable ink to cheat her boss out of about $800,000.

  Anamarie Giambrone allegedly wrote personal checks on a managing director's behalf, then erased the payee's name. She faces two to six years in prison.

• Dallas-based commercial hauler Bluebonnet Waste Control gave drivers two-way radios that could double as wireless phones but took away the phone privileges because too many personal calls were made.

  "You can tell them not to call their wife every five minutes, but you can't do anything to stop their wife from calling them," says Lynne Lueb, a treasurer for the company, adding that the safety of drivers also was a concern.

Employers are instituting controls to thwart unexpected expenses, experts say. One example: Nearly 45 percent of employers monitor the time that workers spend on the phone and the numbers called, according to an American Management Association study.

That's up from 35 percent in 1994. Many get logs of all phone calls made by an employee and review them line by line for personal calls.

Businesses will lose an estimated 6 percent of revenue — $600 billion this year — because of employee fraud and abuse, according to an April report by the Austin, Tex.-based Association of Certified Fraud Examiners.

"It's hard to look at the people you work with as thieves, but losses in small businesses can be catastrophic," says Joseph Wells, association chairman.