A C-level executive from an international company called me.

We had worked together more than five years earlier, during the acquisition of a family-owned business in Puerto Rico. We hadn’t really been in touch since, so this wasn’t a routine call.

Something didn’t feel right on his end.

The main business is based in Latin America, and he’s not involved in the day-to-day operations locally. But he started noticing things that didn’t fully add up. Not one big issue, just several small things that, together, didn’t sit well.

So he picked up the phone and called me.

When things don’t break… they just stop flowing

He started walking me through what had been happening. Reporting was delayed. Then delayed again. Then it just wasn’t coming in.

Bank reconciliations hadn’t been received in over a year. A year!!!

And every time they asked the comptroller, there was a reason. First, the mom was sick. Then the father. Then she was sick. Then dealing with depression. Always something. Always real enough that you don’t feel comfortable pushing too hard.

And let’s be honest, especially as Latinos, we lean into that. The “ay bendito” shows up fast. We try to be understanding. We give people space. We assume things will get back on track. But time kept passing. And nothing was getting back on track.

At some point, the question changes

At the beginning, they handled it with empathy and patience. The way most of us would. But after a while, the focus shifts. It’s no longer just about what the person is going through. It becomes about what is happening in the business while all of this is going on.

Because one delay is a situation. Repeated delays over months become something else. And when a process like reconciliations depends on how things are going personally instead of happening consistently, you no longer have a timing issue. You have a gap.

He told me that when he started digging a bit on his own, he noticed a few transactions that didn’t fully make sense. Not big enough to panic. Not obvious enough to flag immediately.

But enough to stay in his mind. That’s when he decided to call me. Not because he had proof. Because something didn’t feel right.

What we found when we actually looked

Once we got involved and started reviewing things properly, this was no longer about delayed reports or a few strange transactions. There were personal expenses running through the company.

Payments that didn’t match how the business operates. Transactions that, on their own, didn’t look alarming, but together told a very different story. By the time everything was analyzed, the impact was more than half a million dollars over two years. And nothing about it required a complicated setup.

What occupational fraud actually means

Let me explain this in a way that makes sense. Occupational fraud is when someone inside your business uses their role to benefit personally using company money or resources.

They already have access. They know how things work, what gets checked, and what usually doesn’t. Most people think about fraud as something external, hackers, stolen cards, unauthorized charges. This is internal.

And because it blends into normal activity at the beginning, it’s easy to miss until it becomes something much bigger.

The part most owners don’t realize

A lot of business owners believe that being small or being involved protects them. This has nothing to do with size.This wasn’t a billion-dollar company. And that’s exactly the point. Fraud doesn’t depend on size. It depends on how things are structured.

If one person is handling too much without review, if processes depend on “we’ll get to it”, if delays become normal, then the space is already there.

And once that space exists, it gets used.

This is not a rare situation. The numbers keep telling the same story. According to the Association of Certified Fraud Examiners (ACFE) 2024 Report to the Nations, organizations lose about 5% of their revenue each year to fraud. The median loss is around $145,000, and most cases go on for about 12 months before they’re detected.

So when something sits in your business for months without being reviewed, it’s not unusual. It’s actually how these situations tend to play out.

Let’s talk about what needs to change

You don’t need a complicated system, but you do need a few things to actually happen every time.

1. Make reconciliations non-negotiable If they’re not being done consistently, start there. This is not something that waits until things calm down. It needs to happen on time.

2. Have someone actually review the work Not assume it’s done. Not trust that it’s fine. Someone needs to look at it, even at a high level.

3. Sit down with your numbers regularly Not just receiving reports, but asking if what you’re seeing matches how the business actually operates.

4. Require support for every transaction Every time. That’s what removes the “this probably makes sense” conversations.

5. Pay attention when something feels off Even if you can’t explain it yet. That instinct is usually picking up on something real.

Cafecito Takeaway

You can care about your team and be empathetic. You can give people space when they’re going through something. But your processes cannot depend on that. Because when they do, the business becomes vulnerable. And by the time you realize it, you’re no longer dealing with a situation. You’re dealing with a problem, and sometimes, a big one.

If you think this can’t happen in your business, that’s exactly where the risk starts. If something feels off, take the time to look at it. Sit down with your numbers. Review your processes. Ask a few more questions than usual.

Don’t assume everything is fine just because it looks that way on the surface. Most of the time, the information is already there. You just need to take a closer look.