The Summit Investigative team has successfully conducted thousands of internal theft investigations of all types and sizes, from cashier
fraud within a small family owned hair salon chain to the pre-release theft and sale of a holiday
season DVD release from a major Hollywood motion picture studio.
The case study below is an example of our ability to handle the
"Big Ones," major cases involving millions of dollars of potential
loss, potentially hundreds of witnesses and months of intensive investigation.
Tony Jarana acted as lead investigator throughtout this entire case.
Internal Theft Case Study: The Disappearing Discs
A law firm contacted
an investigative agency on behalf of their client, a
manufacturer of audio Compact Discs (CDs) and video discs (DVDs). An
event occurred that brought to light a major internal theft issue
within the manufacture's company.
The manufacturer had been contacted by the company's largest customer, a major
Hollywood motion picture studio concerned that an unauthorized copy of
one of their as-yet unreleased holiday season blockbuster DVDs was being screened at a
local branch of a national video rental chain almost three weeks prior
to the DVDs official distribution and release.
Taking Action at the First Sign of a Problem
The video company’s Loss Prevention (LP) manager contacted the studio’s LP department when he became aware that the disc was being shown and that it might be a bootleg
where it came from, the video chain investigators were able to determine the source of the
illegal disc within 72 hour. The video store’s assistant manager had
received the disc from a friend who had purchased it from an
employee of the DVD manufacturer.
The studio contacted
the disc manufacturer to inform them there was a major security breach at their facility and they had possession of the
illegal disc confiscated from the video store to prove it. The manufacturer was told to immediately stop
production on the $9 million DVD order.
Finding Larger Problems Than can be Handled Internally
Upon conducting an cursory
initial investigation, the manufacturer provided local police with the
names of three employees suspected of being involved with the internal
theft. A short time later, the police located G.D.,
one of the primary suspects, and found 57 of the unreleased DVDs in his car.
While finding there
was a good chance that this was not a single, isolated incident, and
there were probably more employees involved, the police were unable to
continue an internal investigation for the company. Their primary focus
was the distribution of the stolen property.
Concerned about the
potential loss of the $9M order, as well as any future business from the
studio – not to mention the legal issues involved in a potential Loss of
Sale suit – the manufacturer realized a bigger problem existed than
could be handled internally. Having decided they would have to make an official response to the
situation, they contacted the investigative agency immediately.
Combating the Environment of "Take Whatever You Can Get Your Hands On!"
Prior to these events, the DVD manufacturer's management had been acting
under the unofficial position of
overlooking the "occasional" removal (theft) of single discs for employees’ personal
philosophy was that they threw away more discs than employees could ever take home,
and security to prevent this kind of theft was more expense than the
material they were losing. This was the beginning of the workplace environment of “take whatever you can get your hands on!”
We began preliminary investigation by talking to parties already involved, the local police
detectives and suspects already arrested. The suspects, G.D.
included, began to give up names of sources and other people
involved in an attempt to cooperate and lessen charges
G.D. was asked to submit a written statement summarizing his
activities, but he declined. He also initially agreed to a
second meeting with investigators at the
company's facility, but later called and cancelled. The
investigators are now working with the FBI in an effort to prosecute
G.D. for theft and interstate distribution of stolen goods. [Note:
Here is link for complete summary of events surrounding
the attempts of our investigators to interview G.D.: Report of Ongoing Suspect Investigation / Interviews]
Internal Investigations: Immediate and Decisive Action Secures Future
Based on the information provided, we were able to recommend a course of
action for an internal company-wide investigation, to which the
- Within four weeks of implementation, the investigation
significant results that the movie
studio felt confident the situation was being addressed and
the problem was being controlled. The movie studio decided to allow the disc
manufacturer to resume production of the new DVD.
- The manufacturer's quick response to the situation saved the
$9M project, and their willingness to make changes to prevent a
reoccurrence maintained future relations with the studio that last
to this day.
- Ten weeks of investigation netted more than a dozen
admissions of theft, as well as numerous other felony arrests of company employees.
- Based on our findings, the manufacturer implemented numerous
policies and security procedures changes, including the hiring
of more security officers.
Internal Investigations: Snowball Effect Can Lead to Unexpected Benefits
The cost of conducting an investigation will pay for itself via
its affect throughout the company, whether you solve the particular
case or not. It is important to understand the "snowball effect" an
internal investigation can create within your company.
When you decide to conduct an investigation,
you are doing more than just solving the one case. The more
you investigate, the more that seems to be discovered, uncovering
problems and issues you were not even aware of, like finding a convicted
sexual predator that lied on an employment application when conducting
background checks for an internal theft issue.
importantly, you want to ensure that all of your employees are aware that the company will
vigorously respond to any loss issue it sustains in a very methodical,
concrete manner. The initial investigation acts as a deterrent and helps
create a safer, more worker-friendly environment and a "Culture of Honesty & Integrity.”
This type of corporate culture empowers people that
normally wouldn’t come forward when they should to be more conscientious and
speak up more quickly, and more often – a concrete result of the snowball effect that
generate a very positive effect to the business.
As an added bonus, when undesirable elements get weeded out of the workforce,
employees feel the company is trying to do something to improve the
working environment, which tends to cause improved morale and
For an In-Depth Look at This Case...
For a more detailed, in-depth look at this case, you can read:
For more information about Tony Jarana or how Summit Loss Prevention Consulting can help your organization, Call 317-363-8312 or send email to info@SummitLossPrevention.com.