Payroll and Expense Fraud Hamburg

The relationship between a company and its field staff, drivers, external contractors and other employees is based on trust. The lack of supervision and the relative independence of these professional groups tempt some employees to pass private costs on to the company – repairs to their own car billed via the company vehicle, trips to visit their grandmother, a rendezvous presented as a business meal, and so on.

In trusting employment relationships, such audacity is sometimes only noticed after months or even years. The financial damage to the company is enormous, and unfortunately the total can hardly be quantified retrospectively and is therefore only partially recoverable from the offender. Case law shows no leniency when it comes to fraud; the severity of the penalty depends not only on the amount of damage caused but also on the frequency of the offence (see also: fraud Section 263 of the German Criminal Code).

The commercial detectives of Kurtz Detective Agency Hamburg will be pleased to inform you about possible preventive measures and ways of proving working time, payroll and expense fraud: +49 40 2320 5053.

Opportunity Makes Thieves – and Fraudsters: A Case Study

In addition to inflated expense claims for business travel, hotels and catering, falsified work records are also submitted. A common pattern emerges: the greater the distance between the field employee and the company branch, the more brazen the misconduct.

For example: a Franconian company distributes its goods nationwide, with field staff each covering a relatively large region of Germany. One employee is responsible for the Ruhr region, another for Lower Saxony, a third for Berlin and so on – typically two to three field employees share a federal state. Client appointments are organised by headquarters and passed on to the field staff. It is unlikely that an employer from Franconia will travel to Hamburg to monitor employees. Consequently, the employee can be confident that they can carry out their duties – or idle away the time – unobserved.

A Quiet “Working Day” Without Supervision

This particular field employee, who lives in their assigned Hamburg region, starts the day by sleeping in, enjoying a leisurely breakfast with their spouse and then attending to work as it suits them. Their schedule lists eight client visits for the day; they cancel the first six, marking them with notes such as “not reached”, “reschedule appointment”, “client ill” and so forth. After having lunch with their spouse, they get into the company vehicle and visit the two remaining clients. In the meantime, their spouse uses their own car to go shopping, collect the children from school or visit relatives. The employee returns home, switches to their spouse’s car and drives to a petrol station. The fuel receipt is then submitted to the employer. This pattern is repeated on two out of five working days each week.

Various Offences Cause Damage on Multiple Levels

In this case, the field employee defrauds their employer in several ways:

• They claim leisure time as working time (working time fraud).
• They submit their spouse’s fuel receipt as an expense (expense fraud).
• Missed appointments have alienated clients.

Final Clarification by Our Hamburg Detectives

In this example, it took several months before the employee’s conduct was noticed, as even the clients who were not visited despite scheduled appointments did not report this to headquarters. Ultimately, however, the low closing rates and lack of profitability attracted attention. The business owner therefore contacted the detectives of Kurtz Investigations Hamburg to investigate the suspicion of working time fraud. After one week of surveillance, the misconduct was uncovered; after two weeks, the regularity of the offences had been proven in a court-admissible manner.

If you are unsure about the loyalty of your employees, we will be pleased to advise you on how to monitor your staff and freelance workers discreetly. The extensive experience of our detectives enables Kurtz Detective Agency Hamburg to conduct case-specific investigations nationwide. Contact us: +49 40 2320 5053 or by e-mail at kontakt@kurtz-detektei-hamburg.de.