A group of bank tellers embezzles thousands of dollars from their employer without anyone noticing.

Two high-level executives file fraudulent statements to the chief executive to make the company look more profitable than it really was, so they could can get larger bonuses.

A corporate controller writes out $10,000 checks to a vendor who doesn’t exist in order to buy himself works of art.

Law enforcement officials and private investigators encounter stories like this every day. And they all involve one common element a company that failed to put in safeguards and was easily ripped off.

“At virtually every company where we have done a fraud investigation, there has been a breakdown in controls,” said Tom Parker, president and chief executive of the Emerald Group in Westlake Village, which investigates potential fraud cases for companies around the world. “The companies that get taken are the ones that have a lack of oversight in their organizational structure. Everything cannot be open to everyone or there will likely be abuse.”

The best way to avoid being defrauded is to have a checks-and-balances system, according to Parker and other law enforcement officials.

Ralph Plummer, L.A. County deputy district attorney in the major fraud division, said the first part of such a system should be making sure that separate employees are in charge of accounts payable and accounts receivable.

“Where you have too much power concentrated in one individual, you always have the possibility of embezzlement,” said Plummer. “The person doing accounts payable should be checked by the (person doing accounts receivable) to make sure the check is going to a vendor that the company is familiar with. This will help to avoid a check going to a false invoice. All companies should have a check-and-balance procedure and their books should then be rechecked by an outside accountant.”

Other safeguards are needed as well. For example, Plummer points to a city agency in Long Beach that did not have a system to check how much cash was brought in through the cashiers. So one cashier would take a little from the cash drawer, until after two years she netted around $200,000.

“There was no accounting of the money, no one was checking up on the employee,” Plummer said. “That is always the case in these types of crimes. An employee will see an opportunity and grab it. If they continue to get away with the crime, they will continue to take money until they are caught.”

Allowing too much access to information is also a common source of trouble. Employees can use this information to devise embezzlement schemes, or sell it to competitors.

“Everything should be on a need-to-know basis,” said Parker, who was formerly the director of the FBI’s Los Angeles office. “There should only be a few high-level people in the company that have access to certain pieces of financial information.”

Computer passwords are an excellent way to restrict access, with only certain employees getting the codes that allow them to view high-level information.

In addition, investigators say companies should be sure to pre-screen employees to make sure there is no fraudulent activity in their past. The company should also require end-of-the-year financial disclosures from executives to look for irregularities.

It’s also important to make sure the office is secure and that employees cannot leave with important documents. The more competitive the industry, the more likely such theft will occur.

“Employees are a big problem in all types of crime,” said Richard Wade, assistant special agent in charge of the white-collar crime division for the FBI in Los Angeles. “People on the inside can do the most damage. If an employee shows up in a Ferrari who is making $50,000 a year, know that something is up.”

But insiders aren’t the only ones who rip off businesses. A common failing, particularly among businesses in Los Angeles, is a lack of due diligence when it comes to establishing credit, according to Henry Kupperman, director of West Coast operations for the Investigative Group International.

“It’s a problem that is endemic to Los Angeles,” Kupperman said. “There are a lot of high-growth industries here and because they are growing fast, they don’t have enough control over whom they extend credit to.”

Regardless of whether the scam is originating from inside or outside the company, the key is to have control over all of the company’s financial dealings, experts say.

“Understand and ask questions,” said Wade. “If something doesn’t seem right, then get legal help.”