Nailing Corrupt Employee(s)

Have a couple of corrupt employees in our procurement dept who are shamelessly manipulating contracts to vendors by bringing in their own intermediary.

If such employees are caught red handed, what action must be taken. Can a FIR be filed for fraud? or should the next step be a legal notice?

What will help the company recover the amount they have cheated the company fastest?

Welcome inputs of this helpful circle. more  

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The matter should be brought to the notice of Higher authorities in same department for departmental action and also for initiating criminal actions/prosecution appropriately, depending upon te facts and circumstances. Legal notice is not generally required. more  
NOT SO  EASY ......   With warmest regards, BK Dhaigude, Pune. *If you are willing to admit your faults, you have one less fault to admit! On Saturday, April 9, 2016 2:46 PM, Sudesh Rai wrote: more  
Please check, some of the high officials must be involved in the process. The departmental vigilance team (if genuine) should be made alert to deal with such situations. more  
I am not aware the role you play in your organization; but the situation has to be handled with greater care and alertness, since if you fail to prove their guild, then it might land you in deep trouble. BTW, the fraud committed by the employees in the procurement dept is not new, as almost all the companies face this situation; it is not avoidable; as the saying goes, the guy who extracts honey from the tree, cannot help licking the honey on his hands; Most of the reputed organizations recognize the fact that their employees could commit frauds against the company, as such, publish the anti-fraud policy of their organization; does your organization have one such policy; if it has, then follow the policy and take appropriate action; The best way to prevent such occurrences is to define a process consisting of checks and balances including internal audit; that is a different case altogether. Coming to your current predicament: 1. first ensure that the fraudulent act has been committed 2. the act has resulted in a major loss to the organization 3. find out the employees who could have committed the fraud 4. gather documentary evidence or visual evidence of the involvement of the suspected employees; this can be done by allocating an honest employee into the department, saying the workload has increased, necessitating posting another hand therein; 5. find out the reach of these employees; whether they can turn the tables against you in collusion with senior employees/executives; 6. if you still feel you can pursue with the charges against the employees, consult your HR dept and legal dept and as per their advise, inform the employees about their act and the implications of their act; 7. inform the employees the possible punishment that might accrue to them, for their involvement in them; given them an opportunity to them, to present their side of the story; 8. if the employees are important to the organization then the matter becomes tricky; if you lose them, it might affect the organization adversely; if so, give them a warning, an increment cut, recover the loss, levy a fine (interest) and put them under another honest senior official; if these guys are not important, consult your HR and legal dept and arrange for their ouster, as per the organization's rules of employment and termination; 9. consider the case deeply before filing a police complaint, as this might impact the credibility of the organization; then under legal advise take appropriate action like filing FIR etc; 10. coming to the part of recovering the loss, yes it is possible; the dismissed fraudulent employee (if his involvement is proved) does not get any benefits from the company and any amounts due to him from the company can be set off against the amounts to be recovered; there could be some exceptions, pl seek legal advise in this regard for finer points; more  
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