Government reps are making it sound like no big deal - according to a recent report in the Washington Post, since 2007 six investigators working on behalf of the Office of Personnel Management, the agency that heads up background screening for federal jobs, have been charged with making false statements.

Three of the investigators were OPM employees. The three others were employed by government contractors: USIS and Kroll. One of these folks was convicted as recently as last week in Federal court in the District of Columbia. Dozens, if not hundreds of background checks have been admittedly falsified in these cases alone. Tip of the iceberg?

More at the Washington Post.

-- MDT

Labels: background checks, Fraud, Kroll, USIS

Bernie Madoff's epic fall might have you thinking along the same "trust but verify" lines. The L.A. Times has a few timely pointers on this front. Perhaps I'm hopelessly biased, but I think hiring a reputable corporate investigative firm is where it's at. Trusting your accumulated life's wealth to someone isn't quite the same as picking out a new dishwasher. I would think one would want to go the extra mile and seek a little professional help. An investigator may not uncover the fact that the mother of your prospective money manager ran afoul of the Feds forty years ago, but they'll unquestionably perform a more thorough vetting than you could.

-- MDT

Labels: background checks, Bernie Madoff, corporate investigators

Kroll reps weigh in via the Nearshore Journal.

-- MDT

Labels: background checks, outsourcing, Satyam

An offers up some good stuff on management background screenings. 

Labels: background checks, Corporate Resolutions

Ugh...

Dear WSJ,

CC: Tim Hay

Note: Drawing erroneous parallels between corporate investigators and the fictional hard boiled gumshoe set - Sam Spade, Phillip Marlowe and the like - is so, so tired.

Perhaps U.S.A. Today could reasonably use that kind of lame comparison for the benefit of their mouth-breathing clientèle, but The Journal is supposed to be written for sophisticated people.

Please respect the intelligence of your readers and trust that they are capable of understanding the role of investigators in the business world at a level beyond clichéd references to mustaches, Ferraris and Hawaiian shirts.

Your pal,

The Daily Caveat

Whew, now that that is out of the way, IF you can get past the pitiful lede, you might enjoy this WSJ piece focusing on investigators serving the venture capital market. It is really not so bad once you get over the hump.

-- MDT

Labels: background checks, due diligence, venture capital

Interesting comments on the continuing fall out from the NBA/Tim Donaghy situation from a blog that is new to me but looks great - The Sports Law Blog. Hey maybe if I suck up enough they'll get me Nationals opening day tickets.

-- MDT

Labels: background checks, baseball, Tim Donaghy, union

Looks like Kroll is picking up some new folks to help fulfill their background investigation contracts with the Office of Personnel Management. If you've got some experience (interviews, courthouse searches, database) and live in DC, the application details are right here.

--MDT

Labels: background checks, jobs, Kroll, OPM

You've simply got to read this one to believe it. Con man (man-child?) Sung "Lawrence" Hung convinced his Seattle-area neighbor to lend him funds for a mutually beneficial investment, but when the deal went south, Hung threatened that mafia types were coming to do them both in. The most amazing thing is that Hung and his mom have been running scams like this since at least 1997.

Read about his arrest and the schemes that preceded it, here.

These people are out there (well, not Hung, he's currently in the hoosegow) and background checking is your friend. Keep in mind though, that all background checks aren't created equal. When you hire an investigator or investigative service to aid you in vetting potential business associates, know that protecting your interests takes time and attention to detail. Human attention, that is. A $15 internet chop-shop job isn't going to cut it with a guy like Hung. Databases don't do well with non--standard names - especially when they include westernized nicknames.

As a friend in the industry reminded me just days ago, only an investigator, with the benefit of his or her on-the-job experience can anticipate and circumvent issues that would thwart an automated search. It takes a human hand in order to ensure that your ass is well and truly covered. Not conducting a background check and ending up like Hung's victims is bad enough. But even worse is actually paying for a background check that doesn't give you the early warning that you are paying for. So choose wisely...

-- MDT

Labels: background checks, Con artist, due diligence, Sung "Lawrence" Hung

It seems the dishonest habits we often seen displayed in business don't originate there. BusinessWeek does a follow-up on how an intern helped investigative giant, Kroll, break into a new market - college admissions. That Kroll intern, by the way, was Brian Lapidius, who is now Kroll's vice-president for strategic development at the background screening division.

-- MDT

Labels: background checks, Brian Lapidius, college admissions, Kroll

Check out Karen Brymer's article reviewing recent cases involving hedge funds over at Mondaq. You'll have to create a login to access the full article, but it will be well worth it for the Mondaq content. Especially interesting if you want to review the background on that FSA / GLG / Jabre spat that seems to be a running theme on the blog at the moment.

-- MDT

Labels: background checks, Financial Services Authority, GLG, Mondaq, Philippe Jabre

Else you end up like this...

-- MDT

Labels: background checks

A veteran of some 60 court actions, inveterate fraudster, Mordecai Smith is finally going to do some time. Smith and the various companies he's created and abandoned over the years have carved out a path of small time cons, fraud and exploitation across the U.S. This is exactly the kind of guy that if you never take that extra step to background check anyone, you'll eventually employ, invest in, loan money to or otherwise screw yourself over with. Trust me, its worth the $500 to $2,500 just to get the basics done.

Read on for more about Mordecai and be afraid - be very afraid. Because he's only one of many...

-- MDT

Labels: background checks

This recent Pittsburgh Post Gazette article has the details...

As usual, I am always somewhat surprised by what firms get mentioned in these types of articles on corporate investigations. Sure there are the usual suspects, like Kroll, which deserves by virtue of its sheer size, mention in any such article. However, there are always firms I'm unfamilair that show up, while other prominent and well known players don't merit a mention. The article is interesting, to me at least, in these sense that it shows how quickly new investigative turf can become commoditized.

Most of the firms featured in the article as gp-to Hedge Fund vetters do what I think of (perhaps unfairly) as "chop shop" style work. These types of vendors do a volume-based business, predominately operating on a stripped down check list approach to investigation. Rather than trying to be truly comprehensive, they work on the law of averages that nine times out of ten their cut-rate, limited approach won't miss any outlying or obscure details that would be an issue for their clients.

Now based on my background, I am simply biased against this approach. But then, from my first day in the business I was steeped in the practice of "bespoke" investigations, each project and budget tailored for the specific needs of the client. Now, certainly I've worked on a shoestring from time to time and overperformed for the sake of retaining a client who might beget more work, but I'll never be convinced that a checklist is the best way to conduct an investigation.

Then again, these firms appear to be doing quite well. Clients? They like checklists. And they like cheap, too.

-- MDT

Labels: background checks, Kroll

Ahhh, Kirk Wright, America's favorite hedge fund fraudster. The Seven NFL players he swindled, including Marc Coleman, Steve Atwater, Ray Crockett, Al Smith, Blaine Bishop, Carlos Emmons and Clyde Simmons have been doing their level best to get their lost $20 million back, including suing Wright, the NFL, the players' association and anyone else who gets in their way.

The NFL players' association apparently endorsed Wright as an investment advisor through their Registered Financial Advisor Program was "started in 2002 to protect former, current and prospective NFL players from financial fraudsters and con artists" (even though he had outstanding liens against him and lacked professional liability insurance).

The latest version of the complaint has the players pursing satisfaction from two new defendants, ABC Corp. and XYZ Corp. The suit describes those entities as "John Doe" companies who are unknown to the plaintiffs, but were tasked to perform background checks for the NFL and NFL players' association.

Now wouldn't The Daily Caveat like to know which companies those would be? We do know that Kroll was tasked with tracking Wright (and his stolen cash) down, for whatever that's worth.

The NFL, for its part, is also in the crosshairs, but claims that the players bear sole responsibility for their finances. The League is asking for the suit to be dismissed and the NFL players' association is taking a similar tact. Both entities contend that they player contracts state that, in any case, arbitration - not litigation - is the remedy specified in player contracts. How the league will explain away the apparent total negligence of giving its endorsement to known fraudsters is a separate issue.

Meanwhile, with most of the $185 million that Wright swindled from investors still missing, his property is being put up for auction. Wright himself was arrested by the pool at the Miami Ritz Carlton (clearly having seen the error of his ways, of course) back in May and is cooling his heels while waiting for the myriad civil, criminal claims and charges against him to come due.

Couldn't happen to a nicer guy.

-- MDT

Labels: background checks, Kirk Wright, Kroll

Long Point Investments was a Texas based firm that swindled some $35 million from well-meaning but somewhat naive investors. More than 800 were taken in nationwide. But a stone left unturned by investigators until very recently, was the side deal struck with six Nevadans by two Long Point salesman, Robert Mendoza and Gary Steven Wood .

The two salesmen convinced six Long Point customers that Brightstar Consulting International, their Nevada firm, could offer better returns than Long Point. Needless to say, that wasn't exactly the case. Nevada is now investigating the side deal, while Mendoza and Wood were already in hot water in relation to the Long Point investigation (both are currently out on bail).

As for the investors, if they were able to go back in time and do it all over again? Well, here's what one of them had to say:

"If I could rewind the movie, I would have done more of a background check on (the Texas company owner) and Wood, but I trusted my financial planner (Mendoza)." "My advice to the world is hire a private investigator when you're hiring a financial planner," she said.

I couldn't agree more...

For more info on Long Point, check out this article (where the above quote originates) as well as this one for further details, both from the Reno Gazzette-Journal.

-- MDT

Labels: background checks

I'm not much for podcasts, frankly. Devout Mac enthusiast and and eager early adopter though I am, I'd rather just read. But this ongoing series of podcasts devoted to competitive intelligence could be good fun for those of you who are into that sort of thing. They are put together by one August Jackson, a fellow graduate of the George Washington U. Elliot School of International Affairs. Jackson's background is in telecom (an avid Techdirt reader, no doubt) and his employer is Evidence Based Research of the DC area. And if your of a mind, please do check out the podcasts.

Thanks to the always essential ResearchBuzz for the link.

--MDT

Labels: background checks, Techdirt

A new full text search engine for EDGAR filings at the SEC (link courtesy of Houston's Clear Thinkers). Here's a link to the SEC press release on the new tool, which is meant to supplement the pre-existing EDGAR document search functions.

Also, Google offers a re-vamped version of their governent search. For some background on the new .gov-oriented search - who it's aimed at and what it's designed to do - check out this InfoWorld article.

-- MDT

Labels: background checks

A government background check database which combines Social Security and immigration sources to verify a potential employee's immigration status may be expanded for general use, complete with a billion dollar price tag to get it up and running on a large scale. The database is designed to help employers distinguish legal and illegal immigrants applying for work. Not a bad idea in theory, but small scale tests haven't exactly shown the system to be error free. Hence the billions. Homeland Security is offering a voluntary program for business owners to test usage of the system, with 6,000 employers currently enrolled.

For more info on the system and its potential pitfalls, click here.

-- MD

Labels: background checks, database

Background checks for the prom - what is the world coming to? But these check were not, as you might think, conducted on behalf of nervous parents. Rather they were requested by cautious Yarmouth, Mass school administrators, concerned about non-students who were attending the school-sponsored event. As you can well imagine, a certain degree of what we like to call brou-ha-ha ensued when the (initially secret) checks were disclosed.

Read the details, here.

-- MDT

Labels: background checks

This story, which has been building steam over that last several months has been covered multiple times in this space. Data brokers have made a habit of using pretexual interview techniques to illicit the details of cell phone records from unsuspecting telephone company operators.

The controversial, although apparently not technical illegal practice has already brought down continued heat on practitioners and has resulting in several civil actions from telecom companies against offending investigative firms. The ante has just been raised as the Federal Trade Commission has taken action against five firms suspected of trafficing in the missapropriated phone records.

The latest details, via Slashdot:

Posted by Zonk on Thursday May 04, @03:27PM
from the argh-my-records dept...carl writes:

"According to an MSNBC article, the FTC has sued five different background investigation firms for selling confidential phone records." From the article: "In the lawsuits announced Wednesday, the FTC charged the companies used 'false pretenses, fraudulent statements, fraudulent or stolen documents or other misrepresentations, including posing as a customer of a telecommunications carrier' to get the phone records. The companies advertised on their Web sites that they could get the confidential phone records of any individual and make them available for a fee, the agency said."

The actual complaints filed by the FTC can also be viewed on the commission's website under their list of current actions. Here's a quick summary:

• Federal Trade Commission, Plaintiff, v. Information Search, Inc. and David J. Kacala, individually and as an officer of Information Search, Inc., Defendants. United States District Court for the District of Maryland Northern Division, Civil Action No.: 1:06-CV-01099-AMD; FTC File No.: 062 3102

• Federal Trade Commission, Plaintiff, v. Accusearch, Inc. d/b/a Abika.com, and Jay Patel, Defendants. United States District Court for the District of Wyoming, Civil Action No.: 06-CV-0105; FTC File No.: 052 3126

• Federal Trade Commission, Plaintiff, v. CEO GROUP, INC. d/b/a Check Em Out, and Scott Joseph, Defendants. United States District Court Southern District of Florida, Case No.: 06-60602; FTC File No.: 062 3100

• Federal Trade Commission Plaintiff, v. 77 Investigations, Inc., and Reginald Kimbro, Defendants. United States District Court Central District of California, Case No.: EDCV06-0439 VAP; FTC File No.: 062 3099

• Federal Trade Commission, Plaintiff, v. Integrity Security & Investigation Services, Inc., Defendants. United States District Court Eastern District of Virginia, Civil Action No. 2:06-CV-241-RGD-JEB; FTC File No.: 062 31021

For further details, click here to check out the MSNBC story from which the above Slasdot post seems to have been drawn.

-- MDT

Labels: background checks