Skimming and Lapping

While they all involve the illegal taking of cash, in a technical sense, skimming and lapping differ from cash larceny. Cash larceny is the term applied to the theft of cash after its having been recorded on the receiving entity’s books. Skimming and lapping involve the theft of cash before it is booked.

Lapping, which is fairly common, occurs when money received in payment of an account is taken by an employee rather than being appropriately deposited. This shortage is covered by misapplying the next remittance to the deficiency, and so on. Like other fraud, lapping usually starts small, with the fraudster intending to make up the deficiency. Failure to detect the theft emboldens the fraudster and, instead of making up the deficiency, the fraudster expands it. Lapping schemes tend to unravel when they have become too large for the fraudster to manage.

When cash is taken before being deposited and without a record being made of its receipt, the fraud is referred to as skimming. This is most often accomplished by failing to ring up a sale on the cash register or by failing to write up a receipt. More sophisticated versions of skimming involve the use of a second receipt book or even a second cash register.

While skimming typically involves an employee stealing from his or her employer, it can also be used by agents to steal from their principals or, in the case of participation leases, lessees from their lessors.


Infrequent bank deposits, allowing cash to accumulate.

Consistent shortages in cash on hand.

Consistent fluctuations in bank account balances.

Closing out cash drawer before end of shift.

Idaho State Comptroller's Office, First Friday Fraud Facts on Revenue Skimming

Department of Defense: Fraud Red Flags and Indicators

Require daily bank deposits.

Segregate duties between issuing receipts and deposit preparation.

Segregate duties between receiving cash and posting to accounts.