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In case of theft

Internal theft/fraud is now classed as amongst the country’s fastest-growing crime-forms. Kevin Kevany looks at the latest tactics and technologies for deterring theft from businesses.

NZBusiness Editorial Team
NZBusiness Editorial Team
November 17, 2009 8 Mins Read
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Being a manager or owner of a small or medium size business enterprise (SME) in New Zealand means that you can get on with your life and not be bothered about all this security malarkey that seems to obsess the rest of the world. I mean no one could seriously believe that we would rate in the top 200 countries when it comes to armed heists, drug-lord shootouts involving a 100 gunmen or even huge internal frauds running into the millions of dollars. That sort of thing just simply doesn’t happen here; so why waste money on it?
If that’s a somewhat exaggerated version of your views on the security threat to you, your staff and customers, then you are probably the average SME operator. “We’re too small to be a target for that sort of thing,” you might say. Or, “It’s the big corporates with overseas operations that have to play in that game.”
But as hard as we might find it to believe, the whole world is becoming a less law-abiding and increasingly amoral place, fed by a daily diet of violence, scamsters getting away with flagrant con-jobs, failed bankers continuing to suck up multi-million pay-packets, while roadside bombs settle cultural differences.
A chat with Nick Mooyman, one of the dynamic young partners at Mi5 Security, would quickly leave you disabused, disappointed and certainly distressed by a list of just a sample of local internal theft case studies in local SMEs:
• In a South Island dairy, a cashier stole $300,000 over 18 months.
• In a rural bookstore, five out of nine staff stole $200,000 in eight months.
• A fast food restaurant caught its entire night-shift working together as a team to steal a large amount.
• A paint store’s hidden camera caught three-quarters of its employees stealing.
• A pizza cafe employee reset the BIOS time-clock each night on POS Register #3, to ‘re-ring’ the day’s sales – but with a half share for her!
• In just one year, a coffee-cafe franchise group’s owners caught and fired 25 employees for theft.
OK, not a zillion dollars involved to be sure, no bodies lying about in the aftermath – but in proportion to the takings of these operations, a very big problem, not helped by the fact that many caught up in cases like these think it’s a game, with minimal penalties for being caught and great rewards for ‘winning’.
Robin Hood halo
Many people may see a ‘Robin Hood halo’ over the much-publicized Somali pirates. But hidden from public view are the pirates on land who prey more quietly, but no less brazenly, on goods that are being moved around locally and globally by logistics companies, for example – with companies quietly removing the perpetrators and the police declining to prosecute.
None of that would surprise Armourguard’s general manager, Ian Anderson – a man who learnt his early security lessons in Nigeria, one of the most corrupt and violent countries in the world. He believes there are a couple of key trends “shaping the demand for security solutions in the next 12 months”, including a continuing rise in crime.
“The Police statistics for 2008 showed an overall increase in recorded offences; and given crime’s correlation with recessionary bottoms, we expect it to continue to rise, driving the demand for commercial and residential security solutions.”
How much of that growing demand will be offset by individuals and businesses spending less is still unknown, although organisations which cut costs in the security area do so at their peril, he believes.
“For small businesses, ill-thought-out cost cutting in this area is all too often a false economy which usually results in a gradual increase in things that go missing in the workplace.”
He points out that in the residential sector, ‘value’ is greatly attached to emotional rather than financial factors. But, when it comes to commercial markets, value is aligned more closely to financial benefits “associated with reduced risk and lower insurance costs, and less shrinkage of, or damage to physical assets.”
“As Kiwis we are far more interested in averting the threat of attack, robberies or fraud. We tend to avoid being involved in the apprehension, prosecution and conviction aspects,” says Anderson.
Synthetic DNA
Averting theft is exactly what Mi5 Security with its surveillance systems is all about. As is a newly-arrived synthetic DNA solution, which has cut burglary rates overseas by up to 70 percent – delivering hi-tech solutions, backed by sound research and innovation, to help us all keep the baddies out of our businesses, either as employees or violent robbers. In Anderson’s words: “Encourage them to go elsewhere, where the pickings are easier.”
SelectaDNA is a clear solution which can be used to mark valuables and property with a unique DNA code registered to its owner on the company’s secure database which is accessible by the New Zealand Police. The solution glows bright-blue under UV light and stays on valuables indefinitely, and equally importantly, on offenders’ skin for up to a fortnight and on clothes for up to six months.
“You Steal, You’re Marked!” very pointedly say the high-visibility warning stickers placed in windows to let criminals know items in commercial premises or a house are protected.
The good news extends to the Police being progressively equipped with UV light detection kits, so they can actively look for SelectaDNA on stolen property and at crime scenes.
Not only did the product arrive with a proven track-record in the UK and the Netherlands, amongst other countries, where typically burglaries dropped by 50 to 70 percent, but the company commenced a six-month trial in 1000 homes – as well as local schools and businesses – in Randwick Park, Counties Manukau on September 1. 
SelectaDNA Director, David Morrissey is confident the local trial will reflect the success achieved overseas. “The initiative is a concentrated bid to reduce home burglaries and theft in the area. Counties Manukau Police are actively participating in the trial, which is supported by Manukau City Council and Victim Support.
“We expect to see a significant drop in burglaries in Randwick Park as criminals become aware that stolen goods marked with SelectaDNA are virtually unsellable,” says Morrissey.
Reflecting the changing times and banks’ attitudes to their customers, BNZ has become the first local commercial operator to install SelectaDNA hydra spray units in its branches. Rather than triggering smoke bombs and other deterrents which can cause robbers to panic; with SelectaDNA, offenders are sprayed with a fine mist of invisible solution as they freely leave the premises.
Their security strategy manager, Owen Loeffellechner reports that branches which have installed the system have “embraced it” as well as welcomed the bank’s investment in a passive method of protecting them and their customers.

Set and forget
Nick Mooyman’s company Mi5 produces the ultra low-power ‘Eye Series’ cameras – the first to incorporate PSIS, a protected technique whereby a surveillance camera operates in a niche between CCTV and digital still cameras – “the best of both modes”, as he describes it.
This allows critical images of attacks, vandalism, thefts, etc to be captured and stored in high resolution, without the usual degradation in quality of CCTV still images.
According to Mooyman (a trained lawyer and typical of the new kind of person being attracted to the increasingly high-tech security industries) internal theft/fraud is now classed as amongst the country’s fastest-growing crime-forms, with the real costs “far worse than are ever publicised or even generally realised by business owners.
“In an Auckland ‘anonymous survey’, four out of five employees admitted they steal (or have previously stolen) from their employers. On average, 50 to 75 percent of ‘shrinkage’ or loss of inventory or money is due to internal theft. Yet 80 percent of managers polled do not believe their employees would engage in dishonest activities.
“The greater majority of businesses cannot tell and do not know how much they are losing. Even if they do suspect a problem, they are often slow to take meaningful corrective action, investigative steps, or to voluntarily request any outside assistance, until such time as accountants, business consultants, mentors, and the like start questioning them on company losses and shrinkage.”
Mooyman notes that very few management consultants, business advice/training programmes focus on or provide assistance to businesses in this regard.
“Most accountants admit they really do nothing for their clients in relation to loss-related issues. Yet profit retention is as important as profit generation – too many businesses are making money with one hand, but just losing it with the other.
“Just a single percentage reduction in shrinkage can result in a 10 to 25 percent boost in net profit. One hardware group lifted its bottom line 60 percent with a loss-reduction programme over a three-year period.”
Mooyman adds that in recent years it has become more commonplace for employers to utilise covert video surveillance to detect crime occurring in the workplace. Mi5’s Blue Eye compact digital surveillance camera, amongst other options, is capable of capturing and storing up to 65,000 high-resolution images inside a housing which is designed to drop in and look identical to a standard motion detector in a standard alarm system.
“This is now an accepted practice, provided the employer does not breach the privacy rights of the individuals concerned. Employers must remember their legal obligation to deal with their employees in good faith, as well as the implied obligations of trust and confidence (set out in New Zealand’s employment legislation).
“Once the employer has satisfied these employment obligations and followed fair procedure, the employee can legally be removed from the business. The case can then be handed to the Police, who at this point have a choice of whether to prosecute or not.
Naturally, Mooyman advocates that employers who suspect they may have an internal problem, use high quality covert surveillance equipment, appropriate to the application.
“A do-it-yourself approach often results in poor quality evidence and costs the employer more in the long term as they have to spend more money upgrading hardware to get the requisite calibre of proof.”
The ultimate deterrent
The last word is with Armourguard’s Anderson, who believes that the deterrent factor of a security guard or patrolman still has its place in the evolving high-tech security industry. His organisation combines the technological ingenuity of the giant Tyco operation and experienced, local security professionals.
“Late at night, when you think you might have forgotten to lock the back door or windows, after Friday drinks, say, it’s a whole lot easier to phone in and ask us to do the checking down in a now deserted industrial area on the edge of the city, than drive out there and potentially put yourself in harm’s way.
“We monitor 60,000 New Zealand businesses, homes and medical facilities, across the nation, plus all our Members of Parliament, so we are likely to have a patrol car quite near to you. Our philosophy is to ‘watch for the watchers’, so we are one jump ahead of those planning a robbery or something nefarious. That’s where the trained patrolman will always have the drop on an inanimate piece of technology.”
Interestingly, ASB Bank has recently tasked Armourguard with examining how they can make their premises safer for their customers. First BNZ, now ASB: can it be long before the other banks start being more concerned about us too as we going about our banking?

 

 

 

 

 

 

 

 

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