Who Commits Embezzlement in Organizations?

When it comes to embezzlement, the typical image of a fraudster may not align with reality. More often than not, embezzlers are trusted individuals within an organization—those you’d least suspect.

Understanding the common profiles of embezzlers can help businesses identify red flags and protect their assets.

The Common Traits of an Embezzler

1. Trusted Employees:
Most embezzlers are long-term employees who’ve earned their organization’s trust. They often hold positions of authority or access—roles in accounting, payroll, or administration where they handle financial transactions daily.

2. High-Level Loyalty or Familiarity:
People who know the "ins and outs" of an organization's processes can exploit familiarity to work around internal controls. This can include managers, financial officers, or even close business partners.

3. Under the Radar:
Many embezzlers exhibit no outward signs of dishonesty. Responsible, dedicated, and even well-liked, they exploit this unearned trust to commit fraud unnoticed.

What Motivates Them?

1. Financial Pressure:
Financial hardships, such as debts or sudden expenses, can push an otherwise honest employee to rationalize fraud as a short-term fix. Unexpected debt can surface for a variety of reasons including medical expense, accidents, divorce, and addiction.

2. Opportunity:
Poor internal controls—like unchecked authority over transactions or inadequate audits—create the perfect conditions for fraud. Without perceived oversight, employee temptation often increases. If your company isn’t actively preventing fraud, there is an increased risk.

3. Rationalization:
Most embezzlers don’t see themselves as criminals. They justify their actions as temporary ("I’ll pay it back") or deserved ("I’ve worked hard without recognition"). This mindset allows them to continue taking without guilt.

These three conditions constitute the Fraud Triangle.

Protect Your Organization

To help prevent embezzlement, organizations should keep an eye out for warning signs like unexplained changes in employee lifestyle, reluctance to share workload, or discrepancies in financial records. Strong internal controls, regular audits, and a culture of accountability can greatly reduce the risk of financial misconduct.

The reality of embezzlement often boils down to a combination of trust, opportunity, and personal pressure. Recognizing these patterns can help organizations stay one step ahead, protecting both their finances and the trust they value so deeply.

If you suspect your organization may be experiencing internal fraud, or if you have questions about when to consider hiring a forensic accountant, we’re here and we’re happy to help.