At the tail-end of high school and through most of my college days, I worked at an at-the-time popular department store.

Responsible for returns in the customer-service department, I thwarted numerous attempts at consumer theft/fraud ranging from library books in empty fax-machine boxes to swapping out a new alarm clock with a dilapidated one from home to the quick-change artist scam meant to confuse cashiers into handing over more cash than they were given.

But behind me in the warehouse, another type of theft was occurring in the form of employees either outright stealing off shelves or in one instance arranging for outside individuals to drive around to the loading dock and steal merchandise that had just come off the truck (in that instance the offenders were caught). There also were the assorted cashiers dipping into the till, getting caught and offering subsequent bogus sob stories prior to their dismissals.

As the old saying goes, the more things change the more they stay the same. I sat in on a fascinating seminar during the recent HARDI annual conference in Austin, Texas, where Barry Brandman, CEO of Danbee Investigations and recognized as one of the country’s top business security experts, gave an eye-opening talk about the topic of employee theft, calling it “the fastest-growing crime in America.”

To take it a step further, Brandman cites data that shows internal theft is directly responsible for one-third of all business bankruptcies and labels the distribution industry as “the perfect environment for employee theft to take place.”

And the staggering statistics don’t stop there. Brandman references more data that says fraud in the U.S. is reported to now exceed $450 billion annually, while another business survey shows 85% of respondents admit to having at least one significant fraud in their companies within the last three years. Is your company in that category?

Common methods of fraud cited by Brandman during his talk at HARDI include paying higher prices for goods or services to create a financial buffer for kickback payments, approving invoices for services or goods that were inflated or never provided, setting up shell companies as a means for employees to make payments to themselves and receiving short shipments or inflated billing for goods not received or overloading delivery trucks.

Brandman weaved in a number of case studies his firm has worked on throughout the presentation, including one brazen theft in Manhattan where a white unmarked truck pulled alongside a delivery truck (whose GPS tracking device indicated nothing amiss; the driver was at a coffee shop on an allowed break) and a hand truck was used to transfer the hot merchandise from one vehicle to the other.

Brandman says companies make three big mistakes when protecting their bottom lines. They rely on ineffective safeguards such as alarm systems, uniformed security guards or closed-circuit TV (in another case study once uniformed security guards were let go, the product theft almost completely evaporated); they make it too easy for dock personnel to work in collusion with truck drivers; and they do not make it convenient for concerned employees to report security problems to upper management. In another study Brandman cites, nearly 46% of company drivers admitted they have been propositioned by customers. Wow.

Brandman talked about a number of ways companies can get to that being on red-alert point concerning theft and fraud, including realistically evaluating security safeguards, controlling driver theft (i.e., the collusion aspect between drivers and inside warehouse personnel) and establishing an effective hotline program where employees can report suspected company malfeasance in an anonymous, safe and secure environment. Brandman suggests establishing the hotline and those who man it through the use of a third-party service provider.

He even suggests sending in an undercover operative, but stresses the loop of those who know about any undercover activity must be kept as small as possible. This covert path is not a short-term solution, and any information gleaned is to be used as intelligence and not proof, Brandman adds.

But Brandman notes throwing mounds of dollars at this problem isn’t necessarily going to solve the mystery of inventory and cash money walking out the door. “It’s not the amount of money you spend on security, it’s how wisely you invest your dollars,” he says.