What to Do

1. Make sure your evidence is strong.
2. You will probably want to terminate the employee immediately.
3. Notify the police.
4. Don’t deduct anything from the employee’s final paycheck.
5. Don’t discuss the situation with other employees or outsiders.

What does employee embezzlement mean?

Embezzlement is when an employee or someone else in a trusted position steals from your business. They use the money or other assets for their own use. Embezzlement is a crime — the person is usually charged with felony theft under state law. In certain circumstances it can also be a federal crime.

How serious is embezzlement?

Penalties Relating to Embezzlement The consequences of embezzling funds usually involves significant consequences including jail or prison time, hefty fines, counseling and restitution that must be paid to the victims. It is punishable by up to one year in county jail or up to three years in state prison.

Is the embezzlement of funds a business loss?

Embezzlement loss due to siphoning of funds of assessee company by the employees is a business loss allowable u/s. 28 of the Act. The fact that there is embezzlement in the assessee company is not in dispute.

When to claim loss due to embezzlement in India?

Loss resulting from embezzlement by an employee or agent in a business is, however, admissible as a deduction under section 10 (1) of the Indian Income Tax Act, 1922 [corresponding to section 28 of the Income Tax Act, 1961], if it arises out of the carrying on of the business and is incidental to it.

Is the embezzlement in the assessee Company in dispute?

The fact that there is embezzlement in the assessee company is not in dispute. The fact that the employees have siphoned off the funds of the assessee company and the assessee has filed criminal complaints against the employees for the frauds committed by them is also not in dispute.

What to do about embezzlement in the workplace?

Go over the policy in staff meetings. If employees do a lot of business travel, consider using an expense management app such as Zoho Expense or Expensify to control approvals and see scanned receipts all in one place.