Internal Brand Protection: Why might your employees steal your intellectual property?

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Internal Brand Protection

Preserving your brand requires protecting your intellectual property. The Federal Bureau of Investigation (FBI) warns that insider threat of the theft of intellectual property causes far more damage and is much harder to detect than threats from the outside. The most efficient brand protection starts with understanding employee motivations for stealing your trade secrets. The FBI lists more than a dozen personal factors that lead to employee theft of intellectual property. These factors fall into three broad areas: money, emotions and working conditions.

Money

Money causes employees to steal in two ways. Some people always want more of it and some people always need more of it. This suggests that intellectual property theft occurs at all wage levels. A large debt to income ratio may leave a person overwhelmed to the point that they need the money that another person or firm would pay for your trade secrets.

Emotions

Revenge is the most obvious emotion that may drive an employee to steal intellectual property, but it is not the only one. Overwhelming feelings of empathy towards smaller companies and feelings of loyalty towards other individuals or businesses can also drive an employee to spy for outsiders. Finally, some people compulsively steal intellectual property. Consider the employee who steals office supplies because he is a kleptomaniac. This compulsion also drives an intellectual property thief.

Working Conditions

The way the working conditions may lead to a loss of intellectual property ties in with the emotional motivations. Happy employees are less likely to steal from their employees and well-paid employees are happy employees. In fact, a 2012 study at the University of Illinois at Urbana-Champaign found that when employers pay more in retail stores, employees are less likely to steal inventory. The study also reveals that higher wages promote feelings of loyalty and a desire to keep a high-paying job.

Santoni Investigations & Backgrounds offers brand protection by assessing potential insider threats to your business. Contact us today for a consultation.

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4 Ways a Private Investigator Can Support Your Business

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Avoid Unwanted Hiring Surprises

The success of your business depends on the strength of your people.  When making staffing decisions, a pre-employment background check can provide you with the truth about the candidate.  Criminal convictions and resumes that are inaccurate or exaggerated top the list of items uncovered in the employment background screening process.

Extra Diligence for Key Roles

For key or sensitive roles, you may want to request a full background investigation showing a candidate’s background in more detail.  Consider developing a complete footprint showing the locations where the applicant has resided so that you know where to look.  Be sure to search civil, criminal & federal court cases, obtain a credit report, verify education, credentials & employment,  screen for drug & substance abuse, check national sex offender registries, look for bankruptcies & judgments and always run a driving record.

Reduce Abuse of Employee Paid Time Off

Most companies outline generous and fair policies for employe paid time of (PTO), which make a substantial positive contribution to employee satisfaction and retention.  Unfortunately, PTO is often abused by employees who use the time for purposes not intended and often take time away from the workplace without adequate notice.

Employees who call in sick or have other unplanned absences cost your business money- both in direct terms of lost productivity, but also by decreased employee satisfaction by colleagues who have to “pick up the slack”from the PTO abuser.  While most businesses do monitor employee use of PTO, evidence of abuse is often plainly circumstantial: disproportionate unplanned PTO on Mondays and Fridays, for example.

Evidence of Employee PTO Abuse

When your business suspects an employee of abusing PTO, our  investigators can help validate or disprove your suspicions.  Through a variety of discreet investigative techniques, we can determine whether an employee is abusing your policies.  This may include database & desktop research to uncover their “digital tracks” on social media sites, discreet phone calls and even field surveillance to obtain tangible video evidence of their activities and behaviors.

Additional Reading:

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8 Reasons Why a C-Suite Executive contacts a Corporate Investigator & Employment Background Screening Firm

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CEO’s, CFO’, COO’s, CMO’s often don’t know how they can take advantage of a professional corporate investigation firm with experience handling legal investigations and employment background screening. Discreetly and compliantly obtaining verified information is something that an experienced corporate investigator and employment background screening firm can do for the c-suite executives.  Think of a professional and trusted investigation firm with a background screening division as the “secret weapon” used by the management team.

Our c-suite executive clients typically call when…

  1. They want to know more about a new supplier or distributor
  2. They need competitive intelligence or sample products from a competitor
  3. Product starts disappearing (internal/external theft)
  4. Worker’s Compensation Claims are costing the company time and money
  5. Volatile ex-employees and criminals pose threats to their people and resources
  6. Their employee background screening is costing them key talent
  7. Former employees have stolen customer lists or proprietary information
  8. Their brand is being infringed upon and their goodwill is being compromised
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Is Finding Assets Like a Game of Hide and Seek?

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Whether an attorney, business owner or embattled ex-spouse, the number one inquiry we receive is, “Can you find assets?”

In response to a client asking if we perform asset searches or asset checks, the first question we ask is “When you say ASSETS what exactly are you looking for?”  The prospective client oftentimes responds with, “I want to find bank accounts and liquid assets…”  While liquid assets held in bank accounts and equity type accounts are attractive, finding them is only one facet of actually collecting.  Having an active and enforceable judgment via writ, levy or garnishment is imperative as you will need to act quickly and strategically to recover any assets that are found via investigative research.

Prepare a Game Plan

Prior to conducting bank account research, it is best to do an address history and property search. These are conducted to determine if the debtor owns any property or has transferred any property pre-judgment.  Also it is vital to identify the counties in which the properties are owned so that an abstract of judgment can be filed to block a sale, transfer or re-finance without satisfaction of your judgment.

We also recommend that an asset search include an employment search, which is commonly referred to as a POE (Place of Employment) search.  If a debtor is actively employed, an attorney can work to garnish their wages and work to recover a debt owed to you.

There are also some other signs that will indicate whether a debtor either has the ability to pay or is truly suffering from financial hardship.  Some of these searches include a search of civil case filings for any active litigation or civil judgments.  We also search for evidence of Bankruptcy, Liens and Notices of Default.

While an asset search is often focused on tangible assets or employment, another key piece of information to look at is whether or not the debtor party has the ability to generate income.  That said, we typically look at professional licenses and certifications.  We also look at civil and criminal filings in which the debtor is involved to determine if he or she is employable.  If he or she has been convicted of a felony or found guilty of embezzlement or other white-collar crimes, it may be harder to find employment as companies screen for these convictions.

Stick to the Legal Game Plan When Searching for Assets

If the client has a judgment from a court, they have the right to obtain a full credit report, search for bank accounts and have their attorney conduct a Judgment Debtor Examination. This puts the legal system to work to uncover any assets that are hiding.

Business Asset Searches

When it comes to looking at privately held businesses, the size and scope has a direct impact on what information is reported and available.  Publicly held companies are required to report detailed financial and company information that can be accessed very easily.  Privately held companies can be required to provide some basic financial information to the state in which they are incorporated.

8 Key things to consider when conducting asset searches on businesses are:

  1. Property Ownership
  2. Business Credit Report
  3. UCC Filings
  4. Executives / Managers
  5. Sales / Revenue
  6. Domain Name Registrations
  7. Civil Litigation
  8. Judgments

Recommended Reading:

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When product disappears…

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Businesses are evaluated by their ability to deliver products and services to their customers or clients in a timely fashion while maintaining a high level of service and remaining profitable.

The key components of businesses that allow them to deliver on these promises are their supply chains and business processes.  Any disruption to the supply chain or business processes can cause a variety of issues (delays in material deliveries, delayed shipments, increased expenses, unhappy customers).

The Problem:

Unknown male is breaking into the yard of a client and is stealing precious metals at all hours of the night and early morning.  The aluminum that is being stolen has significant value and is costing the company thousands of dollars each week.  Additionally the ongoing theft is causing the employees to be concerned about their safety.

Implications:

Cash flow is impacted, as additional metal must be purchased to meet production goals.  The loss may have to be reported to an insurance carrier, which could cause a spike in premiums.  Employee’s time will be spent viewing security camera footage and possibly being interviewed, which decreases production.  The possibility of the theft being internal or coordinated by a vendor or partner must be addressed and investigated.  Time and resources must be devoted to investigate and stop the theft.

Process:

  • Review and preserve security camera footage
  • Interview neighboring business and request to review security camera footage
  • Stationary surveillance to identify suspect(s)
  • Conduct research of vehicle ownership records to positively identify the suspect
  • Notify law enforcement
  • Background investigation conducted on suspect to determine if he/she has a criminal history
  • Provide statements and turnover evidence to law enforcement (photos, video, research)
  • Training/Consultation on best practices to mitigate future theft

Results:

  • Arrest/Conviction of suspects
  • Secure facility
  • Restore employee’s faith in the company and overall personal safety
  • Bottom line is strengthened because supplies are being utilized to the fullest

The Facts:

According to an insurance research organization metal theft claims have risen by 36 percent since January of 2010.

In an article found in the Insurance Journal, according the NICB, “The damage caused by these thefts is often several times the value of the metal stolen, leaving the victims with hefty repair costs which are often passed on to insurance companies.”

The U.S. Department of Energy has estimated that metal theft costs U.S. Businesses around $1 billion a year.

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Surveillance…for what?

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The use of surveillance as a strategy is something that attorneys, insurance companies, brand owners and businesses are utilizing to develop crucial evidence & information.

Here are some example of how you might utilize surveillance:

  • Insurance Fraud / Workers’ Compensation (Determine employee’s activity level)
  • Premises Liability (Buildings, Offices, Construction Sites)
  • Asset Searches / Judgment Recovery (Employment, Businesses, Banks)
  • Job Site Monitoring (Misstatement of Time/Labor, Materials theft, Accidents)
  • Trade Secrets Theft
  • Non-Compete Violations
  • Competitive Intelligence (Raw Material Shipments, Finished Product, Staffing, Operations)
  • Political Intelligence (Discreet meetings, Alliances, Background)
  • Improper use of company time (FMLA, Workers’ Compensation)
  • Environmental Issues
  • Auto Accidents (Cross-walks, Lighting, Traffic Light Timing)
  • Threat Detection / Mitigation
  • Improper use of residential or commercial property
  • Trademark Infringement / Counterfeiting

In order to obtain the information and evidence that you need engage with a licensed and experienced private investigator who conducts surveillance on regular basis.  A trusted investigator will maintain current equipment, utilize a discreet surveillance vehicle and be able to conduct the surveillance investigation without being made or burned.  We also suggest that any invoices, reports, case notes or communications regarding your surveillance investigations should be directed toward your attorney to keep the information privileged and confidential.

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Why would You conduct Workplace Investigations?

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Workplace Investigations- Why?

Workplace violence, sexual harassment, Worker’s Compensation claims, theft (Intellectual Property, Internal, External), discrimination and data breaches can dramatically impact corporate culture and reputation; not to mention revenues.

A professional, trained, investigator that is experienced can provide your company and counsel with objective information you need to make crucial business decisions. Workplace investigations may include conducting interviews of any witnesses and involved parties.  Background checks on adverse parties and witnesses can prove to be useful to develop crimes of moral turpitude that can impact the credibility of their testimony.

Upon notice of Workers’ Compensation claims an employer should move quickly to secure statements from the injured worker, witnesses, and preserve any evidence (video/photographs).  If there is suspicions that an employee who was allegedly injured in the course and scope of employment and is collecting Workers’ Compensation benefits is believed to be working elsewhere or is conducting activities that are above and beyond their restrictions then conducting an activity check and or surveillance should be pursued.

When the decision is made to terminate an employee keep in mind that the situation could turn hostile.  According to OSHA statistics taken in 2012 over 2 million employees have reported being victims of workplace violence.  Steps should be taken to secure the employers facility via security personnel and the employee could be covertly followed to insure that he/ does not return to the employer’s location and cause a stressful and potentially threatening situation.

According to a study published by the Society for Human Resource Management workplace violence can cause the following issues in organizations;

  • A decrease in morale (29{2f3748b5ca5ab0ef62f1154c571df9c56b0d52fa28ba96fa4f869e5919b9e929})
  • A perceived decrease in safety (28{2f3748b5ca5ab0ef62f1154c571df9c56b0d52fa28ba96fa4f869e5919b9e929})
  • Less trust in coworkers (28{2f3748b5ca5ab0ef62f1154c571df9c56b0d52fa28ba96fa4f869e5919b9e929})
  • Increased levels of stress and depression among workers (24{2f3748b5ca5ab0ef62f1154c571df9c56b0d52fa28ba96fa4f869e5919b9e929})

Companies can mitigate workplace issues by conducting, diligent, pre-employment background checks on their employees, applicants, vendors & partners.

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Making Good Hiring Decisions: What Employers Need to Know and Do Before Hiring- Webinar

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I was honored to be a guest speaker of Linda Duffy, President/Founder, of Ethos Human Capital Solutions and Marla Merhab Robinson of Merhab Robinson & Jackson yesterday as they tackled many issues surrounding the hiring process.  We covered many of the key issues below.  If you missed the webinar you can listen to the whole thing by clicking here.

Here’s what we covered:

  • Use of ADA Hiring Guidelines
  • The rational for pre-placement physicals and when to use them
  • The risks and benefits of pre-employment drug testing
  • What should be included in pre-hire background checks
  • The at-will language and paperwork you need to complete to be in compliance with every new hi

The attendees asked some great questions following the webinar.  The top concerns amongst the employers and HR professionals were the new I-9 Forms and how to maintain compliance.  Whether or not conducting Worker’s Compensation searches as part of a pre-employment background check is useful and or legal.  Also, one key point that was discussed was the difference between job descriptions and essential job functions.

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Workers’ Comp- What is it costing you?

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Insurance costs rising? Corporate culture affected? Frustration? Decrease in production? Increased training costs?

These days as we meet with clients we seem to always hit a hot button when we get on the topic of Workers’ Compensation. The rising cost of Workers’ Compensation Insurance really impacts small businesses.

The main frustration that our clients have is that so many claims are filed and the insurance company would rather settle the claims than aggressively fight them off. Companies want to send a message to their employees that Workers’ Compensation claims that are fraudulent will not be tolerated. A settlement check from the insurance company sends a contrary message. We encourage clients to work in cooperation with their insurance carrier and investigator to develop the evidence required to defend claims.

Workers’ Compensation claims drastically impact a businesses ability to provide raises to employees, improve systems and keep them profitable.

We find that it is important to constantly remind employees of the negative effects of filing fraudulent Workers’ Compensation Claims. In fact employers often bring us in to present to their employees about the effects of Workers’ Compensation claims on the business. Additionally, during our presentations the employees are reminded that their employer will be thoroughly investigating all claims. We also recommend that employers conduct thorough pre-employment background checks on prospective and current employees.

What investigative services can be utilized to stop Workers’ Compensation fraud? This is a great question with a complex answer. First and foremost we would recommend that all employers make their employees aware of the need to report any and all claims immediately. We also recommend that personnel files are kept up to date in the event that a post-claim investigation is required. The most useful information in a personnel file to HR professionals, claims examiners and investigators are; current photographs, drivers’ license number, emergency contact person, updated address, job descriptions and training certificates.

Interviews/Statements- Commonly referred to as AOE/COE investigations can be conducted at the first notice of any injury/claim to obtain information from witnesses and the injured employee regarding the injury. This is a great way to document the specifics and let the employee know that injuries/accidents are treated seriously. Additionally information obtained in the AOE/COE investigation can be used later on should evidence of fraud come up.

Activity Checks– Discreet field investigations to determine the employees activity level. These checks involves checks can involve discreet interviews with neighbors to determine the employees activity level and determine if the subject is employed.

Surveillance– Discreet field surveillance can be conducted to obtained video recorded evidence of the injured workers activity level, evidence of employment and or evidence of actual injury.

Subrogation (Third Party Liability)- Investigation aimed at determining if a third party has any exposure to the liability. This type of investigation is very common when the injury was caused by machinery or equipment that is not owned or maintained by the employer.

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Santoni Worldwide Leads Investigation to Catch a Counterfeiting and Distribution Thief of Microsoft Software from China

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Santoni Investigations, an NTI Santoni, Inc. company, was involved in an anti-counterfeiting investigation / operation in conjunction with Microsoft and Federal Law Enforcement to solicit the sale of software from China into the United States. The successful operation yielded several targets, one of which was a significant player in the counterfeiting trade. The successful counterfeiting enforcement in this case involved a team of investigators, legal professionals and law enforcement.

The key player, who was later identified as Tony Nguyen d/b/a Sin Technologies, was one of the targets that Santoni investigators engaged with. Nguyen was involved in the importation and trafficking of counterfeit software that was coming from China.

According to sentencing records in the case of USA v. Nguyen (Case#: 2:12-cr-00783-DSF-1- United States District Court Central District of California) Tony Nguyen was sentenced to 5 years probation with a condition of 12 months home detention. It was also ordered that Nguyen pay $25,000.00 in restitution, $1,000.00 fine and a $100.00 special assessment. Nguyen was charged with, felony, trafficking in counterfeiting goods.

“We are pleased that our efforts lead to a significant victory for our client,” said Tim Santoni, president. He went on to say, “The Microsoft investigators, Federal agents and US Attorney’s office should be commended for their efforts in bringing this case to justice.”

The operation involving Santoni Investigations, Microsoft and Federal Law Enforcement led to numerous undercover purchases from various targets in the United States and China. Santoni investigators shared useful information and evidence, which was shared with Federal Law Enforcement. The search warrants executed and intelligence sharing provided Microsoft with useful information that they can use to protect their software and combat counterfeiting around the globe.

“The counterfeiting trade is something that hurts businesses and the United States economy in more ways than most people know,” said Tim Santoni.

Counterfeiting is a global trade that costs the United States government billions of dollars every year. According to statistics compiled by the IACC (International Anti-Counterfeiting Coalition), counterfeiting costs U.S. businesses $200 billion to $250 billion annually. Counterfeit merchandise is directly responsible for the loss of more than 750,000 American jobs. Since 1982, the global trade in illegitimate goods has increased from $5.5 billion to approximately $600 billion annually. Approximately 5{2f3748b5ca5ab0ef62f1154c571df9c56b0d52fa28ba96fa4f869e5919b9e929}-7{2f3748b5ca5ab0ef62f1154c571df9c56b0d52fa28ba96fa4f869e5919b9e929} of the world trade is in counterfeit goods. U.S. companies suffer $9 billion in trade losses due to international copyright piracy. Counterfeiting poses a threat to global health and safety.

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