The typical office embezzler often isn't who you might suspect

Embezzlement costs American businesses billions of dollars each year. According to the Association of Certified Fraud Examiners, the typical organization loses about five percent of its annual revenue to fraud.

But just what kinds of companies are being affected, and who are the perpetrators? A new report by Hiscox, an international insurance firm, tries to answer those questions, and its findings are both surprising and revealing.

The study, which looked at employee theft cases that were active in the U.S. federal courts in 2014, found that embezzlement isn't just an issue for big corporations or the financial services industry. In fact, according to the report, 80 percent of the victimized businesses had fewer than 100 employees. Enterprises with less than 500 employees experienced a median annual loss of $280,000 per year due to employee theft.

The typical embezzler is an employee with long tenure at their place of work. The median age of the perpetrators was 50, with women representing 60 percent of embezzlers. And, contrary to the stereotype, more than half of embezzlements were committed by employees not involved in financial or accounting functions.

Just over half of these employee thefts schemes, 53 percent, were undertaken by employees with senior roles in their organizations. And while a little more than one-fifth of embezzlement cases took place in the financial services sector, Hiscox said that retail and healthcare companies had the largest median losses per year, at $606,012 and $446, 000, respectively.

Other organizations vulnerable to embezzlement were non-profits, municipalities and labor unions.

Nearly 75 percent of embezzlement cases involved what the report calls outright funds theft, meaning the stealing of cash or the misuse of bank deposits or transfers. Small businesses, defined as having fewer than 50 employees, were the organizations most likely to suffer from check and credit card fraud.

Hiscox advises small business owners to implement the following steps to combat employee theft:

  • Have bank statements sent directly to your home for review to ensure they won't be falsified prior to reconciling accounts.
  • Review payroll reports from time to time, and check for anomalies.
  • Sign all checks yourself, or keep a signature stamp locked up and secure.