Who's minding your store?
I ask, because it seems there are a growing number of stories in the media of how dealership workers are ripping off their employers.
Even our provocative dealer columnist, Peter Brandow, is involved in a situation in which a family friend allegedly embezzled thousands of dollars from his three dealerships. Brandow trusted the friend enough to name him CFO and essentially hand him control of the finances.
Apparently, the firm responsible for the Brandow Group's annual audits failed to either catch the embezzlement and or notify the Brandow family it was occurring.
Brandow is suing the audit firm and his, now, former CFO. In one way, Brandow was lucky — he only had to sell one store because of the losses incurred. If he had caught on to the theft any later, he likely would have lost all of his dealerships.
Last year, long time California dealer, Cal Worthington, learned two employees stole a hefty sum to feed a Vegas gambling habit.
And earlier this year, a CFO for a luxury dealership in Florida was caught with his hand in the cookie jar — also, to pay off large gambling debts. The owner became suspicious when the CFO rejected her offer to hire someone to help with the accounting. An independent audit revealed the reason.
In Queens, New York, the Federal Bureau of Investigations currently is investigating a car theft ring involving at least two dealerships. Complicit managers at the two stores (with different owners) were sending new vehicles to a lot where a gang would steal them. The vehicles then were sent to the Dominican Republic.
The scheme turned up when a New York City police officer was shot and killed when he stumbled upon a theft that was in process. And that's when the FBI began investigating.
One store had at least 30 vehicles stolen in the last 12 months.
There are countless other stories of similar, unfortunate events.
The point is not to cause you to suspect your employees, but to caution you against blindly trusting your employees. Ronald Reagan coined the term, “Trust but verify,” while he negotiated a nuclear arms treaty with the former Soviet Union while he was president.
But the sage advice applies to dealers, also.
It's easy to think your employees won't steal from you. But who can predict or know what evil lurks in the hearts of men?
Telling someone you're going to check up on their work or putting processes in place to limit the opportunity to steal may seem offensive, especially if the employee is a family friend or a relative.
But as the owner of your business, it's your responsibility and right to trust, but verify. Besides, as a leader of an organization, in setting up periodic checks, you'll be creating an environment that hinders that sort of activity. If an employee knows their work will be audited and checked, it's likely they won't engage in stealing.
If an employee balks, that may be a sign something is going on. Or it simply could mean the employee is offended. There are ways to approach it so it does not appear you're targeting any specific individual.
Just remember, it is your business and your money. Don't let the possibility of hurt feelings keep you from protecting your investment and life's work.