The only problem? I could not be there at the hotels to personally oversee the buying. Did some employees put all the gold in the envelope after each purchase? Not likely. How would I know if they bought 100 grams of gold or 80 grams? The customer who sold the gold rarely knows how much his stuff weighs, so if he got a receipt saying that he received $500.00 for 50 grams of gold scrap, how would he know that it wasn't in fact 55 grams of gold? All he cared was getting the $500.00.

That is to say, if I instruct my gold buyers to pay $10/gram (depending on a certain spot price of gold) how would I know that they didn't in fact buy 60 or 70 grams worth and only marked down 50 grams? I could of course hire a supervisor to verify each purchase, but again, I wouldn't know if the supervisor was stealing from me or if he conspired with another employee to steal from me; all I accomplish by this is putting another person on the payroll who could steal from me.

When the teams returned, I had other people double-checking the purchases for accuracy of buying, that is, to verify that the item purchased was in fact what it was supposed to be, 14 kt gold or sterling silver, whatever, depending on the receipt. If mistakes were found, then the offending buyer was given instruction on how not to repeat that mistake - I did not deduct from their salaries the breakage (the loss due to the mistake) but if they made too many mistakes I would simply fire them.

Aside from these verifiers, I had employees who would sort the gold into the appropriate bins, melt the gold or silver, and deliver the bullion to my refinery in New York. In New York, I had workers who would weigh the incoming material, assay for purity of content, remelt the gold and turn it into shot for further refining, then turn it into pure bars of gold or silver and then stamp the bars as to plumb. There were workers who had to buy refining materials: molds, acids, filters, zinc powder, and other materials. Then there were salespersons who dealt with jewelers or investors in the city who bought the pure metals.

As long as each team generated a profit of $10,000 each weekend after all the salaries, advertising costs, hotel costs, police or security escorts, refining costs, breakage, rents, shipping, insurance, utilities, and thefts - then I was a happy camper.

Is it possible that everyone stole from me? Most likely. Did I care? Let me answer this way: when I first started doing this in 1980, a fellow gold buyer who bought a lot more at the time than I did, asked me how I could be sure that no one was stealing from me. I told him that I was sure of the contrary, that everyone was stealing from me. He then told me that he could never do what I was doing because he could not stand the thought of someone stealing from him. It would gnaw at his guts.

How to Reduce Employee Theft to Zero

There is only one way to insure that no one is stealing from you and that is to do all the testing, all the buying, all the sorting, melting, refining by yourself. But since he could not be in 5 states simultaneously, he never entered that phase of the business. In a few years, I was one of the largest buyers of gold scrap in the New York area, easily surpassing him in total gold purchases. All because I was not obsessed with keeping only honest employees.

I told him, as I'm telling you, my readers now, that I wish I had had 100,000 employees stealing from me. As long as each employee generates more profit after expenses than they are stealing why should I stop it? Even today, if I have 5 employees each stealing from me but each generating a profit, no matter how small, I wouldn't fire any of them; why should I? As long as an employee makes 1 dollar above the business nut (the total cost of everything to be in business), I would keep him or her.

The only employee that should be fired is one not earning his keep. So to answer the question, "would you fire the less profitable thieves?" Absolutely not. I would only fire the not-profitable employees.

As for a non-thief employee who knows that another is stealing, I do not like snitches. A businessman that needs employees to tell him that someone is stealing is not running his business properly. I'm a clever enough businessman, I could stop all the stealing by putting into place enough safeguards, supervisors, double-checks, countermeasures, cameras on each transaction, remote monitoring of electronic scales, pat-downs of employees, etc. that stealing would go down to nearly zero. But to what purpose? Just to generate more expenses?

Almost All Employees Steal

Businesses need to spend their time and money in the most efficient manner possible. Almost all employees steal, but one should not spend one dollar trying to stop an employee from stealing a ten cent pencil. For example, credit card companies could, if they wanted to, stop almost all credit card fraud but, as I explained in my article Credit Card Fraud and Leftist Traitors, that would put such a burden on merchants and customers that credit card use would drop precipitously. The credit companies would lose more in sales than what they would save on fraud.

That does not mean they put up with large thefts. Certainly if one of my employees took off with fifty thousand dollars, I would chase him down and have him prosecuted, but one needs to put everything in perspective.

One has to strike a balance. Today in my telecom business we have cameras over every employee although they are unobtrusive, actually almost invisible. I don't want to make the workplace look like a prison compound.