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Inside Job

Proactive techniques in prevention and detection of internal theft

Inside Job

The days of the “hunt and peck” method in surveillance rooms are over. Surveillance rooms have hundreds—and in most cases thousands—of cameras that stretch from all over the resort complex to the central command center of the casino, the surveillance room.

So the question becomes, how, with that many cameras to watch and a surveillance staff that is typically less than 20 to 30 employees, do we watch everything? We quite obviously don’t have a surveillance person sitting behind every camera on property watching as incidents occur.

Instead, in today’s surveillance rooms we rely and require notifications from outside departments on anything significant. Examples of these are: high action play in gaming areas, jackpots, monetary escorts, employee bank variances, security incidents (trip-and-falls, fights, thefts, etc.) and of course, anything criminal or suspicious in nature. Also, a surveillance room’s staff must be highly trained, motivated and ready for anything.

Some surveillance rooms now use more effective, advanced methods than in the past to keep one step ahead. Some of these include:

1) conducting regular/routine audits of all outside departments to ensure policies and procedures, gaming regulations and state and federal laws are being complied with, and that internal theft isn’t taking place;

2) utilizing “interface” technology that gives us the ability to view “real time” what an employee is doing on a computer while watching his general activities with a camera;

3) data-mining departmental reports and financial statements for red flags and areas of concern; and

4) using analytics built into digital systems that not only expedite reviews of incidents but notify surveillance staff of problematic areas and employees.

These methods being utilized properly in a surveillance room can significantly increase the detection of incidents of theft occurring at a property, and can turn “reactive” surveillance rooms into “proactive” rooms.

What other techniques can be used by surveillance and other departmental management to prevent, detect and deter internal theft? Here are some suggestions of proactive techniques that every establishment should implement (if not already in place) that will assist in prevention and increase detection of internal theft:

Better Screening and Background Checks

Make “integrity” questionnaires part of your organization’s pre-screening process. Every potential candidate should have to take the questionnaire and score within a designated range to be able to continue the hiring process. These questionnaires can help ensure you are hiring a more honest, ethical employee.

Use public record information through the internet to assist with employee background checks. These records are usually free and are a cost-effective way to ensure the employee you hired doesn’t have skeletons in his or her closet.

Just running the employee’s name and date of birth through a Google search could find potential litigation against the employee, or in some cases, you may find the person made the headlines of a newspaper in a less-than-positive light. Some states even have civil and criminal court information that’s available to anyone who can access the internet.

It’s important to remember that just because someone resigned from a company and wasn’t “fired” doesn’t mean they have a clean slate. You never know; maybe the employee resigned in lieu of termination after being caught stealing and the employer decided not to prosecute to save money.

Remember, for liability reasons, a lot of companies give very little information about past employees. Some companies have even begun using an 800 number that will just provide information like position held and start and end date of employment. They will typically provide no other specific information as to why the employee is no longer with the company.


Policies and Procedures

Ensure you have strong policies and procedures in every department and that they are updated regularly.

Departmental standard operating procedures (SOPs) are a must for every department within a gaming establishment. The SOPs should be the core of the department, and they should outline how aspects of the job are done every day and how specific situations are handled. SOPs should be updated at least annually, and all employees should be required to sign and date them when they receive them to acknowledge that they have received and understand the expectations of the job.

When updating SOPs, learn from your mistakes and experiences, and make sure to create additions and revisions to your SOPs when necessary. The only way department heads can minimize opportunities for their employees to commit internal theft is to put controls in place in their SOPs to make it harder to steal. Another advantage to strong, structured policies and procedures in your department is that they can help you in unemployment hearings. If an employee denies in an unemployment hearing that they knew what their expectations were related to the job, you have documentation to support that they read and signed their job expectations and were held accountable.

Finally, strong SOPs help surveillance rooms conduct routine audits. Surveillance staff should read through departmental SOPs prior to conducting an audit in the area to ensure these SOPs are being adhered to.


Know Your Property

Inventory all critical and expensive equipment, materials and supplies in every department.

If you were to test inventory controls at your property over a high-value item you sell—like lobster, for example—would your property pass? If your executive management lets you, try it. Take a box of lobsters (or similar item) out of a freezer when no one is around and see how long it takes someone to report the box missing. In most cases, no one will report the box missing, and instead will pass it off as used product.

Too often, equipment, materials and supplies are noticed to be missing and not reported in a timely manner, or at all. Due to lack of proper inventory control, missing items are reported to security or surveillance teams to be investigated, and when the question is asked, “When was the item last seen in the area?” management’s response is, “I’m not sure.” In these cases, the question becomes, “At what point do we start the review?”


Surprise Audits

Implement routine employee bag checks of all employees leaving the property for the day. For this to work, it’s imperative that there is only one to two designated entry/exit points for employees to use, and that the bag checks are being conducted at all entry/exit points. It’s important to communicate to surveillance that the bag checks are going to take place so they can watch for any employees trying to bypass the bag check area and notify security of violators.

Basically, anything an employee is leaving property with should have a back door pass (signed off by their supervisor or security). If they aren’t found carrying a back door pass and have an asset of the property, they would need to be questioned to determine if the employee stole or not.

Conduct random surprise employee bank audits. These should take place periodically by either management of the area or internal audit. As business dictates, in areas of gaming and food-and-beverage, surprise audits should take place to determine if the employee’s bank is short, over or right on to the penny. In the case that a significant variance is found in an employee bank, surveillance should be notified immediately to investigate. These surprise audits can help identify employees stealing and also deter theft by keeping employees on their toes. 

Conduct investigations using covert (hidden) equipment. These types of investigations are very useful, and typically result in large cases of employee theft being discovered. With today’s technology, surveillance can install cameras the size of a pinhole in a room, cooler, storage area, etc., and no one will even notice it. It’s recommended that as a routine, surveillance rooms use a covert setup at least once a month in areas of concern.

Increase employee and management awareness of internal theft. Have surveillance management speak at new-hire orientations to increase employee awareness of reporting suspicious activities observed, and the different methods of how to report the information. Front-line employees in every department are the organization’s first and best line of defense. These employees will typically observe suspicious activity that may be a result of a co-worker committing theft well before departmental management or surveillance will. If they don’t know how to report these observations, they may ignore it and not report it at all.

Implement an anonymous employee “whistleblower hotline.” Every organization has to have a way for employees to report unethical or suspicious activities they witness, and they have to be able to do it anonymously. When information is received via the employee hotline, it should be confidentially e-mailed to at least three high-level executives so it can be reviewed and disseminated to the proper management. It’s also important to make sure that employees know about the hotline. This can be done by posting the number on employee paychecks and on flyers in the company employee hallways.

In all of our establishments, we are dealing with the impact of the current weakened economy, the housing crisis and staggering unemployment rates. Knowing these statistics, we would be silly to think that internal theft isn’t taking place at our establishments, and happening often. In fact, recent statistics compiled by the Association of Certified Examiners suggest it’s now more prevalent in society than ever.

Surveillance departments are known for “loss prevention” and “asset protection,” and typically don’t bring revenue to the bottom line. Utilizing these techniques, along with making sure employees caught stealing are prosecuted and required to pay restitution, will only increase the profitability of your establishment and bring more money to the bottom line.

Jessie Beaudoin, CPO, CSP, is the executive director of surveillance at the Hard Rock Hotel & Casino in Las Vegas. Beaudoin has over 10 years of casino surveillance experience specializing in detection and prevention of internal theft and fraud. He is currently a board member of the International Association of Certified Surveillance Professionals, and a member of the Gaming and Wagering Council, Certified Fraud Examiners, and ASIS International.

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