After Suelyn Farel got an email alert that someone had downloaded her entire customer database, she learned that two former employees had conspired to steal from her beauty products company.
Farel had allowed the staffers to keep working after they each gave notice in late 2017; when they left the New York-based Julien Farel Group, their passwords for its system were still active. The theft led the company's database provider to block Farel's access for four months while the incident was being investigated, costing the firm an estimated $70,000 to $80,000 in business. Farel felt betrayed.
"It was a huge eye opener. I'm someone who's very trusting and I love our employees," she says. "It really reminded me that I have to be careful, that possibly my judgment of the character of people around me is wrong."
In this Wednesday, March 13, 2019 photo, Deb and Kevin Durken pose for a photo in their boot store The Boot Shack in St. Cloud, Minn. The bookkeeper for the Durken's store forged checks and stole an estimated $225,000 over 10 years, Deb says. The bookkeeper was able to keep stealing because she was trusted to do her work unsupervised. (AP PhotoJim Mone)
Employees may steal from companies of any size, but small and mid-sized businesses can be more vulnerable because they lack practices and systems designed to prevent wrongdoing. Their technology may not be as secure as at a larger company, and they may not have the staffing to provide the kind of checks and balances that make it harder to steal. The more familiar atmosphere at some companies may make it easier for employees to plan and conceal a crime and keep on committing it.
Farel has since changed her policies. The day staffers give notice is usually their last and they lose their access to company email and the rest of the computer system. She keeps a list of everyone's passwords and makes sure they are disabled.
Farel has taken steps that should be standard operating procedure at all companies, says Shira Forman, an employment attorney with Sheppard Mullin in New York. If a current staffer is suspected of stealing, bosses should still "cut off access and stop the bleeding," Forman says.
In this Wednesday, March 13, 2019 photo, with Deb Durken in the background, Kevin Durken poses for a photo in their boot store The Boot Shack in St. Cloud, Minn. The bookkeeper for the Durken's store forged checks and stole an estimated $225,000 over 10 years, Deb says. The bookkeeper was able to keep stealing because she was trusted to do her work unsupervised. (AP PhotoJim Mone)
"One approach might be to put the employee on leave while you investigate, and have any kind of data access frozen while you do that," she says.
It's a good idea, whether an owner suspects or knows for sure that a staffer has stolen, to get legal advice on how to proceed, Forman says.
In the case of a theft via computer, owners need an electronic paper trail. The initial email from Farel's database provider said the download was made from an internet service provider in Brooklyn, so Farel knew the theft didn't take place at her office. She was also able to find out that the download occurred at the new employer of one of the ex-staffers. Farel reported the theft to the district attorney's office; the case has not yet been resolved.
There aren't definitive statistics showing how many companies have experienced employee theft because many cases go unreported. Owners may feel embarrassment and shame, and don't want to bring negative attention to their companies. But insurer Hiscox, which analyzed nearly 400 employee theft cases in federal courts in 2016, said 68 percent occurred at companies with fewer than 500 employees. Those companies lost a median $289,864.
Misplaced trust can be a problem for business owners who find it hard to imagine that a staffer, especially one who's been with the company for years, would steal, says Doug Karpp, a senior vice president with Hiscox.
"When you have five or 10 people in an office, you trust each other like family members," he says. Owners may feel so secure that they focus too little on what staffers are doing — allowing thefts to continue over an extended time, Karpp says.
The bookkeeper for Deb and Kevin Durken's store, The Boot Shack, forged checks and stole an estimated $225,000 over 10 years starting in 1999, Deb Durken says. The bookkeeper was able to keep stealing because she was trusted to do her work unsupervised. Deb Durken wasn't working at the St. Cloud, Minnesota, store during that time, but she noticed discrepancies when she checked invoices and bank statements. However, the couple disagreed about what to do, and they didn't investigate further. It wasn't until 2009 that the bank called, questioning a check that had no payee.
Deb Durken, a paralegal, played detective and figured out that the bookkeeper had written a series of checks without payees and then altered copies of checks in bank statements to look like they had vendors' names.
"I dreaded telling Kevin when he came home," Deb Durken says. "He was literally sick, felt betrayed."
The Durkens pressed charges and their former bookkeeper has made partial restitution. The couple has insurance against employee theft that has given them about $50,000. And the situation won't happen again, Deb Durken says. She's now handling the company's books.
Two employees have stolen from Leslie Saul's Cambridge, Massachusetts, architectural firm over a 30-year span. One was an intern who bought merchandise and used a car service, paying with company accounts; his parents made restitution for the $3,000 to $5,000 he stole. The second was a designer who downloaded images and client information and used them without permission to help launch a new firm. Saul doesn't believe her firm suffered any financial losses in that case.
Saul wonders if she needs to be more careful in hiring to ensure this doesn't happen again — although she has hired dozens of staffers who didn't steal. But she keeps in mind something a mentor told her years ago:
"'You can always teach skills but you can't teach who the person is — look for the person first and then the skills,'" Saul says. "I do think that's the greatest advice."
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UNITED NATIONS (AP) — The United States vetoed a widely backed U.N. resolution Thursday that would have paved the way for full United Nations membership for Palestine, a goal the Palestinians have long sought and Israel has worked to prevent.
The vote in the 15-member Security Council was 12 in favor, the United States opposed and two abstentions, from the United Kingdom and Switzerland. U.S. allies France, Japan and South Korea supported the resolution.
The strong support the Palestinians received reflects not only the growing number of countries recognizing their statehood but almost certainly the global support for Palestinians facing a humanitarian crisis caused by the war in Gaza, now in its seventh month.
The resolution would have recommended that the 193-member U.N. General Assembly, where there are no vetoes, approve Palestine becoming the 194th member of the United Nations. Some 140 countries have already recognized Palestine, so its admission would have been approved, likely by a much higher number of countries.
U.S. deputy ambassador Robert Wood told the Security Council that the veto “does not reflect opposition to Palestinian statehood but instead is an acknowledgment that it will only come from direct negotiations between the parties."
The United States has “been very clear consistently that premature actions in New York — even with the best intentions — will not achieve statehood for the Palestinian people,” deputy State Department spokesman Vedant Patel said.
His voice breaking at times, Palestinian U.N. Ambassador Riyad Mansour told the council after the vote: “The fact that this resolution did not pass will not break our will and it will not defeat our determination.”
“We will not stop in our effort,” he said. “The state of Palestine is inevitable. It is real. Perhaps they see it as far away, but we see it as near.”
This is the second Palestinian attempt for full membership and comes as the war in Gaza has put the more than 75-year-old Israeli-Palestinian conflict at center stage.
Palestinian President Mahmoud Abbas first delivered the Palestinian Authority’s application for U.N. membership in 2011. It failed because the Palestinians didn’t get the required minimum support of nine of the Security Council’s 15 members.
They went to the General Assembly and succeeded by more than a two-thirds majority in having their status raised from a U.N. observer to a non-member observer state in 2012. That opened the door for the Palestinian territories to join U.N. and other international organizations, including the International Criminal Court.
Algerian U.N. Ambassador Amar Bendjama, the Arab representative on the council who introduced the resolution, called Palestine’s admission “a critical step toward rectifying a longstanding injustice" and said that “peace will come from Palestine’s inclusion, not from its exclusion.”
In explaining the U.S. veto, Wood said there are “unresolved questions” on whether Palestine meets the criteria to be considered a state. He pointed to Hamas still exerting power and influence in the Gaza Strip, which is a key part of the state envisioned by the Palestinians.
Wood stressed that the U.S. commitment to a two-state solution, where Israel and Palestine live side-by-side in peace, is the only path for security for both sides and for Israel to establish relations with all its Arab neighbors, including Saudi Arabia.
“The United States is committed to intensifying its engagement with the Palestinians and the rest of the region, not only to address the current crisis in Gaza, but to advance a political settlement that will create a path to Palestinian statehood and membership in the United Nations,” he said.
Mansour, the Palestinian U.N. ambassador, reiterated the commitment to a two-state solution but asserted that Israel believes Palestine "is a permanent strategic threat."
"Israel will do its best to block the sovereignty of a Palestinian state and to make sure that the Palestinian people are exiled away from their homeland or remain under its occupation forever,” he said.
He demanded of the council and diplomats crowded in the chamber: “What will the international community do? What will you do?”
Israeli-Palestinian negotiations have been stalled for years, and Israel’s right-wing government is dominated by hard-liners who oppose Palestinian statehood.
Israeli U.N. Ambassador Gilad Erdan called the resolution “disconnected to the reality on the ground” and warned that it “will cause only destruction for years to come and harm any chance for future dialogue.”
Six months after the Oct. 7 attack by the Hamas militant group, which controlled Gaza, and the killing of 1,200 people in “the most brutal massacre of Jews since the Holocaust,” he accused the Security Council of seeking “to reward the perpetrators of these atrocities with statehood.”
Israel’s military offensive in response has killed over 32,000 Palestinians, according to Gaza’s health ministry, and destroyed much of the territory, which speaker after speaker denounced Thursday.
After the vote, Erdan thanked the United States and particularly President Joe Biden “for standing up for truth and morality in the face of hypocrisy and politics.”
He called the Palestinian Authority — which controls the West Bank and the U.S. wants to see take over Gaza where Hamas still has sway — “a terror supporting entity.”
The Israeli U.N. ambassador referred to the requirements for U.N. membership – accepting the obligations in the U.N. Charter and being a “peace-loving” state.
“How can you say seriously that the Palestinians are peace loving? How?” Erdan asked. “The Palestinians are paying terrorists, paying them to slaughter us. None of their leaders condemns terrorism, nor the Oct. 7 massacre. They call Hamas their brothers.”
Despite the Palestinian failure to meet the criteria for U.N. membership, Erdan said most council members supported it.
“It’s very sad because your vote will only embolden Palestinian rejectionism every more and make peace almost impossible,” he said.
Algeria's Permanent Ambassador to the United Nations Amar Bendjama speaks during a Security Council meeting at United Nations headquarters, Thursday, April 18, 2024. (AP Photo/Yuki Iwamura)
Israeli Ambassador to the United Nations Gilad Erdan speaks during a Security Council meeting at United Nations headquarters, Thursday, April 18, 2024. (AP Photo/Yuki Iwamura)
Palestinian Ambassador to the United Nations Riyad Mansour holds tears while speaking during a Security Council meeting at United Nations headquarters, Thursday, April 18, 2024. (AP Photo/Yuki Iwamura)
Representatives of member countries take votes during a Security Council meeting at United Nations headquarters, Thursday, April 18, 2024. (AP Photo/Yuki Iwamura)
Palestinian Ambassador to the United Nations Riyad Mansour, left, and United Nations Secretary-General Antonio Guterres speak before a Security Council meeting at the United Nations headquarters, Thursday, April 18, 2024. (AP Photo/Yuki Iwamura)
Palestinian Ambassador to the United Nations Riyad Mansour speaks during a Security Council meeting at United Nations headquarters, Thursday, April 18, 2024. (AP Photo/Yuki Iwamura)
Representatives of member countries take votes during a Security Council meeting at United Nations headquarters, Thursday, April 18, 2024. (AP Photo/Yuki Iwamura)
Israeli Ambassador to the United Nations Gilad Erdan speaks during a Security Council meeting at United Nations headquarters, Thursday, April 18, 2024. (AP Photo/Yuki Iwamura)
Palestinian Ambassador to the United Nations Riyad Mansour speaks during a Security Council meeting at United Nations headquarters, Thursday, April 18, 2024. (AP Photo/Yuki Iwamura)
U.S. Deputy Ambassador Robert Wood votes against resolution during a Security Council meeting at United Nations headquarters, Thursday, April 18, 2024. (AP Photo/Yuki Iwamura)
