The fast food restaurant shift manager was sitting in his car, under the shade of a tree in a parking lot. On the floor are unused disposable tank bags and a destroyed tank bag that had been sealed with the lock-up tank from the night before. The manager had opened the deposit bag and the passenger seat is full of contents: units, five, ten, twenty, and coins. You will use one of the unused bags to make a new deposit. The manager counted the funds multiple times, and his stress level increased. The amount is not enough to match a deposit slip for a deposit dated two days ago. Two days ago? What’s going on here? Why did you open a deposit bag today so that the funds match a deposit slip that is two days old? Did you know?
This is a theft scheme called “continuous deposits” and, unfortunately, it is not uncommon for store and restaurant managers to prepare deposits and make deposits with the bank. The employee steals all or part of the day’s deposit and compensates the cash stolen from the contents of future deposits to cover the thefts. The scheme continues as long as the administrator has access to the deposits.
The telltale sign of the “continuous deposit” theft scam is that the deposits that a particular manager takes to the bank are constantly validated by the bank several days after they should be. Deposits taken to the bank by the other managers are validated on time. The stress level of the manager who is plotting increases as the need to match deposit funds with unvalidated deposit tickets becomes increasingly complicated. As in the previous example, the deposit that the administrator opened is not enough to cover the previous deposit ticket. The manager will now have to wait to add funds from tomorrow’s deposit to hide his thefts.
If the company is using disposable deposit bags and the deposit was prepared by another manager, our shift manager involved in the robbery scheme makes the bank run with the deposit. As in the previous scenario, the manager on duty to continue with his robberies, must open the sealed deposit bag and remove the cash and the attached deposit slip.
Without intervention, these theft schemes can go unnoticed for a long time and the cash losses can be staggering. Experienced security and loss prevention professionals can easily reveal fraud with a little investigation. In my experience, the manager who engages in ongoing deposit fraud will readily confess when properly interviewed. They are so stressed about trying to keep the plan afloat, they are usually relieved that it is finished.
There are tried and true protocols for establishing robust loss control practices to prevent this type of scheme and ways to easily discover it. If you suspect that one of your employees has ongoing deposits:
1. Develop a table: at the top of the table, list these columns: Date, Shift (deposit), Deposit amount, Bag number, Depositor’s name, Bank verification date. Make a separate line for each deposit. On the left side of the chart, list the sequential days of the month. Complete the corresponding information as of the first of the month.
2. Analyze the table: Look for patterns and discrepancies, such as missing disposable bag numbers in the sequence, bag number “jumps”, and bank deposit validations. Look for a pattern in which the same manager takes deposits to the bank when discrepancies occur.
3. Action – Prohibit the suspect from accessing the deposits. If a continuous deposit scheme is taking place, a deposit will soon show an excessive shortage or missing altogether. Track deposit activity over the past few months to get a better indication of when discrepancies first appeared.
4. Prevention
* Requires all reservoirs to be sealed in disposable reservoir bags.
* Eliminate vinyl / canvas / zip bags
* Register the deposit bag number with the corresponding deposit.
* Require depositors to sign the deposits they take to the bank.
* Verify all bank deposit validation dates with business dates
* Develop robust cash and deposit audit programs that look for deposit bags and out-of-sequence validations.
* Ask a bank representative to notify you of “late” deposits (> 3 days late)
* Consider SMART safes or armored vehicle service
Taking deposits to the bank is a common practice for managing fast food stores and restaurants (QSR). It is plagued with problems such as time spent away from administrative responsibilities at the restaurant or store, exposure to traffic accidents and crime, and this “mobile warehouse” theft scheme. Although apparently the cheapest way to get funds to the bank, it can be more expensive if the manager is seriously injured or killed in a car accident or armed robbery during transportation. Stealing tens of thousands of dollars of deposits can pale in comparison. As new technology develops, armored vehicle service becomes more competitive and forms of banking become more progressive, it may be time to rethink how to get our money to the bank and eliminate exposure to our people and our profits. So what goes here? Why are certain deposits arriving at the bank several days late?
Now you know, and now you can do something about it.
