Corporate Espionage: Danger from Within and Without

40 Per Cent of White-Collar Criminals Are the Company’s Own Employees

Corporate spies—whether internal employees or external hackers—often possess business expertise as well as knowledge of internal processes and precautionary measures within the targeted companies. They abuse this knowledge to leak sensitive information through security and data vulnerabilities. According to the Gesamtverband der Deutschen Versicherungswirtschaft (GDV), almost 40 per cent of economically motivated crimes against companies involve theft, embezzlement and acts of espionage committed by individuals from within the organisation.

Internal Perpetrators

The so-called circle of internal perpetrators includes not only employees, but also cooperation partners, suppliers, service providers and customers, as these parties have insight into sensitive operational processes and can therefore access the desired data more easily.

External Perpetrators

External perpetrators, by contrast, are often not even located in the same country as the targeted company—let alone in the same city. Through the internet, cloud services and communication via email, hackers and other cybercriminals employed by competitors have numerous opportunities to intercept data and secrets and use them for their own purposes.

Offender Profiles

The GDV’s identified distribution of 60 to 40 per cent between external and internal perpetrators does not entirely reflect the experience of our corporate investigators in Münster, who are regularly called in to clarify such cases (in fact, numerous other studies have determined a ratio closer to 50:50). In approximately 70 per cent of the cases of white-collar crime solved by us, the perpetrators turned out to be employees of the affected company itself; if one expands the definition to include the entire internal circle described above, this figure rises to over 80 per cent in our experience. Nevertheless, in cases of espionage the competition is often (also) behind the offences, instigating corrupt employees to commit corporate espionage through payments and other benefits.

 

According to statistics published by Euler Hermes Kreditversicherungs-AG, in cases of so-called “breach of trust” losses—such as disclosure of secrets and corporate espionage from within the company—two thirds of the perpetrators are male and comparatively young (35 per cent under 30 years old, 30 per cent between 30 and 40 years old) and in most cases have not been employed by the company for long. The highest density of embezzlement and betrayal is found among employees who have worked for the company for less than two years, while the lowest probability occurs among long-standing staff members (up to 20 years of service).

Billions in Damage Every Year

Even though many statistics paint an alarming picture of insufficient employee loyalty, one must under no circumstances lose sight of the realistic external threats. Security and protective mechanisms against internal misuse are necessary, yet 47 per cent of computer crime cases are committed by external actors. These may include contract hackers hired by competitors, either to cause sabotage or to gain an unlawful competitive advantage by illegally obtaining and forwarding internal company information. A special form is represented by so-called “trolls” (also internet trolls), who, for a variety of motivations, seek to expose what they perceive as a company’s IT incompetence and thereby damage its reputation, finances and market position. Regular reviews of security precautions and workflows are indispensable, and in cases of suspicion swift action is required to minimise damage and apprehend the perpetrator(s) before further attacks occur from within or without.

 

Even if your company has so far avoided harm, the danger of future attacks must not be underestimated. The bare figures demonstrate this: annual losses from white-collar crime in Germany have long since reached the billions (previous peak values exceeding €4.6 billion in 2010 and 2014) and almost always account for more than 50 per cent of total crime-related damage nationwide. Furthermore, it must be assumed that the number of both undiscovered cases and those deliberately not reported to the police is extraordinarily high. Various unofficial statistics even estimate annual losses of €80 billion or more. Our corporate detective agency in Münster is available for both preventive and investigative measures—equally in “classic” detective fields as well as in IT matters, counter-surveillance and burglary prevention.

How Can I Protect My Company?

Complex corporate structures, opaque hierarchies and workflows, as well as restructurings during mergers or downsizing, facilitate corporate espionage for both internal and external perpetrators. They can thereby gain access to confidential data of immense value to the company. Security gaps such as unencrypted email communication, data storage via cloud services or on externally hosted servers can easily be identified and exploited by professional and targeted fraudsters. Our detectives in Münster therefore recommend that clients engage IT specialists at an early stage to better secure sensitive data and to modernise outdated security systems. High staff turnover, including numerous marginal employees and—often even unpaid—interns, further increases the risk of unwanted information leakage, particularly if short-term employees are dissatisfied with their pay or contract duration, do not identify with the company and therefore see no reason for loyalty.

 

While covert video surveillance of staff is legally prohibited because it infringes too heavily upon employees’ personal rights, it is permissible and appropriate in cases of specific suspicion or actual damage to have employees placed under surveillance, as clarification can no longer be achieved through milder means such as staff discussions or formal warnings. Investigators from our detective agency in Münster may either monitor employees during external assignments (for example field staff, tradespeople and others) or infiltrate a department disguised as new colleagues in order to observe the suspect employee(s) and, ideally, catch them in the act of illegally passing on or negligently handling company data. The evidence collected is documented in a manner admissible in court, and the deployed corporate investigators can also be summoned as witnesses to confirm their written reports orally.

Wide Range of Methods Used by Kurtz Detective Agency Münster in the Investigation and Prevention of White-Collar Crime

If your company has demonstrably already suffered damage from corporate spies or if you suspect that such damage could occur in the medium term, our private detectives in Münster will be pleased to advise you free of charge and without obligation on the appropriate course of action in your specific case. Together with you, we determine whether surveillance of a suspicious employee is necessary, whether preventive security measures should be implemented or whether other methods promise greater success. Thanks to our broadly positioned team of specialists, we are able to respond very flexibly to the respective problem. Write to us at kontakt@kurtz-detektei-muenster.de or contact our experts by telephone: +49 251 7009 0014.

Author: Maya Grünschloß, PhD

 

Kurtz Investigations Münster

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D-48155 Münster

Tel.: +49 251 7009 0014

E-Mail: kontakt@kurtz-detektei-muenster.de

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