In a day and a half, The Joseph Company was out $70,000.

The reason? A group of people forged and cashed 60 checks they had stolen from an office in its building.

The theft in November 2000 came as a shock to president Carter Wagner and his employees.

"We obviously weren't well-prepared," Wagner said. "We never dreamed something like this could happen in Austin, Minn."

Since the loss in 2000, the company has established procedures to prevent fraud from happening in the future.

With the recent forging of Quality Pork Processor checks, businesses are becoming more aware of fraud. Local officials say businesses can take steps to prevent it from happening.

Businesses need to be wary of outside sources of fraud as well as fraud and theft from employees.

Wagner said The Joseph Company has put procedures in place to restrict access to its checks and payroll. Only three people have access to the checks, the checks are kept in a safe and they have a separate account for payroll so that they know when money is missing.

"If this happens again, we'll know right away," Wagner said.

To try to prevent fraudulent checks from being cashed, banks ask for identification if they do not recognize a customer, said Todd Thompson, president of Wells Fargo in Austin.

"All people accepting money from customers should be trained to check ID, verify the check is valid and be aware of what is going on," he said.

Patrick Flanagan, assistant Mower County attorney, said employees should always check a customer's identification, even if they know the person. If the employee verifies the check, it will make it easier for law enforcement to track it if it is fraudulent.

Sometimes employees will mark that they have verified the check even when they haven't, he said.

"We have to be able to document what happens," Flanagan said.

Employers should also invest in security equipment, which may be expensive but worth it if it prevent a costly theft, he said. Keeping track of inventory and money transactions weekly or daily will help employers determine if anything is missing.

Company employees also can be fraudulent.

Last January an employee was caught taking more than $3,500 worth of merchandise from the Sears store. A camera recorded the employee taking a television from the store, according to the police report.

Austin Sears owner John Howe said he turned the employee over to law enforcement, which he said is one of the most important parts of handling employee theft.

Employee training is key in preventing employee theft, Howe said. Employees need to know that

if they are caught stealing, a criminal record will result.

"There is a consequence that comes with it," Howe said.

Howe lets his employees know that cameras and alarms are installed throughout the store. "The biggest thing is to let employees know there's safeguards in place," he said.

Internal theft, he said, can be more damaging to the store than external theft.

"Internal theft can ultimately bankrupt a company," Howe said.

Before owning the Austin Sears, Howe was a Sears district loss prevention manager.

"You have to make sure employees aren't stealing from you," he said.

All employers will probably come in contact with someone who has committed fraud and they need to be prepared for it, he said.

Austin police Capt. Curt Rude said employees need to be held accountable by their employer.

"(Employers) should strive to come up with a trustworthy, honest employee," Rude said.

Placing cameras over cash registers has prevent employee theft, he said.

The Austin Area Chamber of Commerce held a conference for members with local law enforcement to inform employees about fraud a year ago.

"Following that seminar, the number of bad checks going through the county decreased dramatically," Sandy Forstner of the Chamber said.

If the chamber hears of bad checks being cashed, they verity it with the police and then send a warning called a "mushroom alert" by e-mail to its members, Forstner said.

Forstner said in the case of the QPP fraud, the checks looked very authentic.

Both Rude and Flanagan said that even as security measures to prevent crime increase, technology on the criminal side increases with it.

"You're never going to eliminate it and there's always going to be a criminal element thinking of bigger and better ways to do things," Flanagan said.

Cari Quam can be reached at 434-2235 or by e-mail at cari.quam@austindailyherald.com

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Tips from local law enforcement to prevent business fraud and theft:

1. Install security cameras in appropriate places

2. Train employees to check for a customer's identification

3. Have strict policies regarding who handles money in the company.

4. Keep an accurate and up-to-date inventory

5. Make sure employees know the consequences of theft or fraud.