Labels: background checks, Fraud, Kroll, USIS

Labels: background checks, Bernie Madoff, corporate investigators

Labels: background checks, outsourcing, Satyam

Labels: background checks, Corporate Resolutions

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

Labels: background checks, due diligence, venture capital

Labels: background checks, baseball, Tim Donaghy, union

Labels: background checks, jobs, Kroll, OPM

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

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

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

Labels: background checks

Labels: background checks

Labels: background checks, Kroll

Labels: background checks, Kirk Wright, Kroll

"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.

Labels: background checks

Labels: background checks, Techdirt

Labels: background checks

Labels: background checks, database

Labels: background checks

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."

• 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

Labels: background checks

RBI wants banks to screen prospective staff

Business Standard
Our Banking Bureau
Mumbai
April 14, 2006

Banks would soon have to do a background check of candidates before recruiting them as employees. The Reserve Bank of India (RBI) is working on guidelines, making it mandatory for banks to run a check on the background of prospective employees. The background checking will be as per requirements of the financial action task force (FATF) on anti-money laundering (AML).

Speaking at a seminar on anti-money laundering organised by the Indian Banks’ Association (IBA), Lalit Srivastava, RBI general manager, said as per FATF guidelines, the RBI had already asked banks not to outsource the task of customer identification as per know your customer norms to direct selling agents (DSAs).

On lessons learnt from the recent IPO scam, Srivastava said penal action against banks found guilty in IPO allotment scam should not be evaluated on the basis of amount of penalties. The penalty for continued non-compliance could cost a bank heavily in its dealings in the international market and with its correspondent banks...

Labels: background checks, money laundering

Screening missed teacher's drug case - Case of a Hoosier's Florida arrest record exposes limitations of background checks

By Staci Hupp
April 2, 2006
Indianapolis Star

"It's scary that someone could be prosecuted in another state and come to Indiana and we don't know about it," said Rep. Robert W. Behning, R-Indianapolis, who heads the House Education Committee.

At least 41 other states have switched to FBI screenings that use fingerprints to scan criminal records nationwide. Teachers who apply for licenses in Indiana are subject only to the state's limited criminal history check, a computer screening that relies on incomplete records from county courthouses.

Money typically is the sticking point, according to Indiana State Police officials who have pushed for changes. Schools would have to pay up to $39 for FBI background checks, while the state system is available for free.

No one knows how many offenders have slipped through screening in Indiana. A check of newspaper stories from the past decade shows that at least three school employees convicted of violent crimes passed background checks.

Indiana bars those convicted of drug dealing, crimes involving children and some other felonies from teaching.

But first it has to spot them...

Labels: background checks, database

U.S. private eyes are snooping in China

By Parija Bhatnagar, CNNMoney.com staff writer
March 16, 2006: 4:51 PM EST

Not all U.S. companies are bemoaning the potential for fraud that comes with doing business in China. Corruption is a good thing for the growing number of private eye firms setting up shop in the Far East. New York-based private investigations firm Fortress Global has been in China for less than two years but the region already accounts for up to 30 percent of the company's international business. Besides China, Fortress Global also has offices in South Africa, London and Canada.

"Many U.S. companies are looking to do business in the Far East, predominantly in China, and they're retaining our services to make sure that they won't lose money down the road," said Donald Leo, vice president of Fortress Global's operations in Asia. Leo said the nature of the firm's investigative work in China typically pertains to intellectual property and copyright violations, as well as vetting local business partners for joint venture proposals.

A typical background check involves investigating for any record of criminal activity either in China or in the United States, said Leo. "We also see that there are no U.S. sanctions imposed against the local company, or even if the company was cited by the Federal Trade Commission for shipping violations in the past," Leo said...

Labels: background checks, China

Sleuths step out of the dustbins and into the limelight

By Liz Chong
The Times
March 04, 2006

Companies may not admit using them, but private investigators have gained acceptance. Their clients include governments, leading investment banks, hedge funds, private equity houses and FTSE 100 companies, but few would admit that they have ever hired corporate detectives, let alone met any. It would be too embarrassing to reveal that a company had enlisted the help of a private investigator to dig up the dirt on an opponent or client, or disclose that they had been duped by an employee or partner...

...business investigation and intelligence is on the rise, driven by an array of legislation introduced by the US Congress in an attempt to clean up corporate America. The laws impose heavy duties on directors, accountants and lawyers. Directors, perhaps not surprisingly now that they are personally liable for any financial scandals, want to avoid falling foul of prosecutors, who have zealously pursued white-collar crime in recent years, with the open backing of the Bush Administration.

...The plethora of bribery and corruption legislation has made it common practice for investors to hire investigators to look at the hedge funds they may invest in, or for private banks to hire companies that examine the background of a new client from Eastern Europe...

...Increasingly aggressive business tactics make it standard practice for private equity houses to use investigators to examine the curriculum vitae of the chief executive of a potential target. Similarly, investment banks advising well-known businessmen on mergers and acquisitions have been known to conduct due diligence on their past by hiring corporate sleuths. Lawyers are also a steady stream of revenue for the industry...

...The willingness to hire private investigators can be partly attributed to the success of the industry in shedding its threatening image. The credit for this lies with Jules Kroll, the enigmatic grandfather of the industry, who spent much of the 1980s absorbed in high-profile takeover investigations for Wall Street. Mr Kroll’s success was cemented in 1992 when he was featured in The New York Times as Wall Street’s “gumshoe”...

...The industry is characterised by a handful of larger companies, with some smaller boutiques. These include GPW, headed by Patrick Grayson, a former Irish Guards officer who previously ran Kroll’s London office. Another recent breakaway is the good governance group, known as G3. The marketplace has even attracted interest from the Big Four accounting companies, which have set up specialist units within their forensic sections. Yet they are all dependent on the web of contacts accumulated through networking.

...The companies all say that they have strict ethics policies, which require them to observe the laws of the country they are working in. But it is not uncommon for investigators to distance themselves from surveillance work or bugging by hiring smaller agencies.

Labels: background checks, bribery, Kroll

Labels: background checks, FOIA

SPX Completes Sale of Vance International, Inc.

January 18, 2005

CHARLOTTE, N.C. -- SPX Corporation (NYSE: SPW) today announced that it has completed the sale of Vance International, Inc., its global investigation and security firm, to Garda World Security Corporation (TSX: GW) for $67.25 million in cash. On November 28, 2005, SPX announced it had signed a definitive agreement to sell Vance to Garda. The transaction is effective as of December 31, 2005.

Chris Kearney, President and CEO of SPX said, "We are focused on growing our three core growth platforms -- flow technology, test and measurement, and thermal equipment and services. As a result of this transaction, we will reduce our non-core assets and Vance will become part of a business with complementary services and expertise."

Garda is a leading provider of security and cash handling services. The company, known for its Total Security Solutions approach, provides physical security, investigation, employment background checks and electronic security services. The company is headquartered in Montreal, Canada and has nine locations in the United States.

Vance, based in Oakton, Virginia, is a global investigation and security firm known for its expertise in managing risks. With over 3,700 employees who bring highly specialized solutions to its clients, Vance has more than twenty years of experience and is one of the most trusted investigation and security consulting firms in the world. Founded in 1984, Vance was acquired by SPX in 2002. SPX expanded the expertise and reach of the business through acquisition and today the business carries the combined expertise of Vance International, Decision Strategies, and The Fairfax Group...

Labels: background checks

Hedge Funds: Do-It-Yourself Due Diligence - A little sleuthing online can turn up information that may signal trouble ahead

January 16, 2006
By Anne Tergesen
BusinessWeek

Hedge funds generally don't make it easy for investors to get information about their inner workings. But the 80-odd investors in the most recent hedge fund to collapse, tiny HMC International Fund of Montvale, N.J., could have saved themselves trouble and money simply by using the Internet to do some due diligence on HMC's managers.

One, Bret Grebow, left a trail of legal problems that include a property lien, an arrest on charges of possessing drug paraphernalia, and failure to repay much of a loan to a former employer.

Grebow and co-manager Robert Massimi now face Securities & Exchange Commission charges of securities fraud and the misappropriation of more than $5.2 million of the $12.9 million invested in HMC. The managers "sent investors false monthly account statements that portrayed their investments as profitable when, in reality, Grebow was systematically looting the Fund's trading account," the SEC alleges in a Dec. 21 complaint filed in the Southern District of New York. Among the items the duo is alleged to have paid for with investor funds are rent and furniture for a Manhattan apartment.

What warning signs were detectable? A search of public databases -- including those maintained by Google (), LexisNexis, and various federal, state, and county courts -- dredged up enough dirt on Grebow to cause alarm. The record includes arrests in 1994 and 1995 in Arizona -- where Grebow attended college, according to HMC's Web site -- on charges of possessing marijuana and drug paraphernalia and damaging property worth less than $100. According to the Pima County Justice Court in Tucson, the drug-related charges were dismissed in July, 1996. Grebow pleaded guilty to a lesser charge -- unlawful acts regarding alcohol -- and was fined $284. According to the court, there is an outstanding warrant for Grebow's arrest on the damage charge because of his failure to complete a drug education course. "It was staggeringly easy to get this information," says Michael Allison, CEO of International Business Research of Princeton, N.J., a company that performs background checks on hedge funds and managers (Personal Business, Nov. 21, 2005).

That's not all. In 2002, Grebow's former employer, defunct New York brokerage Bluestone Capital, won a judgment against him for not repaying a loan of more than $118,000, says Eric Streich, an attorney who represented Bluestone. Grebow has since repaid $3,212, he says. Court records also show an October, 2004 judgment against Grebow for failing to pay his former wife, Jamie Grebow, some $127,000 in support. An attorney who represented Jamie Grebow didn't return calls. Bret Grebow's attorney declined to comment on the SEC charges or his client's past. With hedge fund blowups becoming common, do some sleuthing before you write a check.

Labels: background checks, Bret Grebow, database, HMC International, Robert Massimi

DHS taps Kroll for background investigation work

By Alice Lipowicz
Staff Writer
December 6, 2005

The Transportation Security Administration has awarded a contract to Kroll Government Services Inc. to perform preliminary background investigations of TSA screeners and other employees, the company announced today.

The indefinite-delivery, indefinite-quantity contract is for one year with four one-year options. It is potentially worth $17.2 million.

Kroll Government Services, a subsidiary of the risk consulting firm Kroll Inc. of New York, has done background checks for TSA airport personnel since 2003, when Congress made the checks mandatory...

Labels: background checks, Kroll

Labels: background checks, Melvyn Weiss, Peter Henning

Times good for hired sleuths: Corporate jobs keeping private investigators busy

By Tamara Grippi
Staff Writer
San Francisco Examiner
August 28, 2005

The Hollywood image of the hard-boiled private investigator trailing a shady-looking character down an alley has little to do with today's professionals who find a steady stream of corporate business. Companies are turning to private investigators to conduct background checks and sniff out fraud and internal thefts. P.I.s frequently work for attorneys, locating and interviewing witnesses.

San Francisco, San Mateo and Marin counties have seen 2,500 new jobs in investigation and security services since January 2001, according to the California Employment Development Department. "As the economy expands, the need for this work expands," said Clarick Brown, the recent past president of the California Association of Licensed Investigators...

...Sam Brown, the owner of the Sam Brown Group and the Investigative Career Program believes some electronic avenues of investigation have been closed in recent years, making the P.I.'s job more difficult. The future of the industry will involve a return to reliance on old-fashioned "human intelligence," Sam Brown said. During corporate internal theft investigations, Sam Brown said he has placed undercover investigators at major companies, where "no one knows who they are."

A well-established P.I. firm may charge as much as $100 an hour for its services. Investigators who are just starting out can expect to make about $15 an hour while they complete the three years of paid work necessary to qualify for their license from the state.

Labels: background checks

Wall Street's private eye

Vanson Soo
The Standard
August 29, 2005

Jeremy Kroll rolls his eyes when someone attempts to portray him as a second-generation private eye, even though his family name is as synonymous with the modern profession of risk consultancy and investigations as Pinkerton's once was with detection.

Still, the 34-year-old son of the man who founded Kroll Associates, who works under his father as managing director of global business development and strategy of the company's consulting services group, acknowledges that something akin to the film noir gumshoe spirit does run in his family.

``Back when my dad started the business, my grandma spent a week tailing a subject in her car, changing her outfit every day to make herself harder to spot,'' he says, smiling at the recollection.

``My family is full of curious people, and that has not changed.'' The patriarch, Jules Kroll, now 64, is a former Manhattan assistant district attorney who came to believe that a lot of the time and money spent prosecuting corporate crime would be better spent trying to prevent it. With that in mind, he set up the company in 1972.

Though the company was sold last year to insurance giant Marsh & McLennan, Jules Kroll remains its executive chairman. The younger Kroll, who was in Hong Kong earlier this month to visit clients, graduated in French, Italian and fine arts from Georgetown University in Washington, DC, the same school where his father got his law degree.

A family man, he's the eldest of four children; his sister, Dana Kroll, also works at New York headquarters as an associate managing director. In nine years with the firm, Jeremy Kroll has risen from investigator in the areas of corporate intelligence and due diligence to head of a division with more than US$500 million (HK$3.9 billion) in annual revenue.

If Kroll Associates enjoys some cloak-and-dagger mystique, it's probably because of the large number of ex-police, military and intelligence officers Jules Kroll originally hired to lend his new company credibility.

Nowadays, its recruits are just as likely to be computer nerds, lawyers, accountants and investment bankers. The company has spread far beyond its beginnings in investigative and security services. Today, its four primary business segments are consulting, corporate advisory and restructuring, background screening and technology services.

"Technology is a big growth area,'' Jeremy Kroll says. "Computer forensics is a major weapon in our arsenal.'' The company glories in its reputation as "Wall Street's private eye,'' a firm that multinationals, and on occasion even the US government, are comfortable entrusting with their most sensitive affairs.

It burnished its reputation in the early 1990s, successfully tracking down millions of dollars of assets concealed by political outlaws like Jean-Claude Duvalier of Haiti, Ferdinand and Imelda Marcos of the Philippines, and Saddam Hussein of Iraq. Less glamorous, but probably more typical of the way Kroll earns its bread and butter, is its mandate, bestowed in 2002, to restructure Enron, the fallen angel of the US energy business.

Kroll booked US$900 million in turnover last year and currently employs more than 4,000 people in 65 offices worldwide. Kroll files says the company's security work revolves mainly around emerging markets. ``In some industries, such as oil and energy, there is a need for companies to be in `bad neighborhoods' where it's dangerous to business.''

Does that include China? Not really, he says. If China were considered that dangerous, he adds, would Yahoo! ever have invested, as it did recently, US$1 billion (HK$7.8 billion) to acquire a 40 percent stake in Alibaba, a narrowly focused Internet outfit in a speculative industry that last year earned just US$46 million?

``Overall, we have seen a maturing view of Greater China over the past five to 10 years, as experience and confidence have increased,'' he says. Though in earlier years, China may have been just another bandwagon on which globetrotting companies were expected to jump, it has since moved up the charts to become an integral part of many global strategies.

With that, the level of risks has risen proportionately. ``We get daily phone calls from American and European companies about troubles that are threatening their joint ventures in China,'' Kroll says. The China concerns of Kroll's clients today fall very broadly into three categories - transactional risks, regulatory risks and operational risks. Transactional risks relate to joint ventures and partnerships.

Regulatory risks are those inherent in a company's dealings with Chinese authorities, and operational risks involve issues like technology, supply chains and general ambiguities associated with doing business in the mainland, for example, intellectual property protection.

Kroll also advises on political and societal risks that tend to become more important for companies as their mainland roots deepen. "Kroll helps clients understand their markets a lot better, and to recognize that China is becoming an influential player in the global marketplace,'' he says.

Financial institutions are also rushing headlong into the mainland but many are plagued by doubts about their clients - as basic, in some cases, as whether they are real or fictitious. "The real ownership structure of a company and who's behind them are issues that must be dealt with.''

Establishing title is a major headache for real estate investors. Shell companies abound, and it is often unclear just who owns what. I ask Kroll what, after a decade in the company, is his most memorable experience? Surprisingly, it has nothing at all to do with catching someone red-handed in a headline-grabbing scandal. "No. It's the recovery of a kidnapped child. It happened when I was in my late 20s. The feeling of returning a child safely to his family is beyond description.''

Finally, I can't help asking him if it's true, as some people have suggested, that Kroll people carry guns when they're in China. "No way,'' he says, laughing. ``The only people in the company who ever carry guns are those involved in personal security protection, but they've never been deployed anywhere in Greater China.''

That's a pretty good indication that Hong Kong and China are not all that dangerous as places to do business.

Labels: background checks, China, Enron, Kroll, New York AG

PROTECTING YOUR PERSONAL INFORMATION....NOT....Is ChoicePoint a piece of work or what? Here's how they've responded to the theft of hundreds of thousands of private consumer records from their database:

Elizabeth Rosen was plenty angry when ChoicePoint Inc. sent her a form letter acknowledging that crooks might have perused some of her most sensitive personal and financial data.

But the Hollywood nurse was flabbergasted when the company, one of the nation's largest collectors of consumer records, also offered to sell her some of the same information so she could see what might have been compromised.

....Rosen's experience highlights a paradox in the recent string of thefts of personal information: Many of the same companies responsible for safeguarding reams of sensitive data that have fallen into the hands of scammers are now trying to cash in by pledging to protect consumers' privacy.

Information brokers infiltrated by con artists, banks that have lost unencrypted financial data and peddlers of online background checks are pitching fraud-detection plans that cost from $25 a year to more than $150.

Information collection agencies should be required by law to do everything in those "fraud-detection plans" — and more — as a normal course of business. And they would, too, if the cost of losing data were made high enough.

Someday there's going to be an unholy consumer backlash against these guys, and they're going to deserve every last bit of it. The gall is simply beyond belief.

Labels: background checks, database

The CV detectives

By Tom Geoghegan
BBC News Magazine
August 22, 2005

It might seem like the only way to secure that dream job, but with one in four people lying on their CVs, employers are wising up, and have identified the typical fibs people tell. So, you founded your university debating society, did you?

And what was your greatest challenge in that role? However unlikely, it's a job interview question some people would dread, if they are one of the many people to have faked parts of their curriculum vitae.

A quarter of 3,000 CVs submitted with job applications in 2004 had a lie in them, says employee screening firm Risk Advisory Group. And while the section headed "personal interests and achievements" may seem like a legitimate area for exaggeration, some of the lies are far more serious than fibs about undergraduate life.

Neil Taylor produced a bogus degree certificate to land the position as head of the Shrewsbury and Telford Hospitals NHS Trust in 2003. But after admitting the offence of obtaining a pecuniary advantage through deception, he now faces the possibility of prison.

So what sort of things are people lying about? Inflated job titles, increased salaries and benefits, length of service and qualifications are the most common areas, says Marcia Roberts of the Recruitment and Employment Confederation.

"You'd be surprised to know how common it is to lie about qualifications and how stupid it is because it's easy to check," she says. "Recruiters should never accept that someone has lost their certificates. You'd be surprised how many claim to have been to foreign universities when they don't even exist."

In an extreme case of faking it, people have even been known to send someone else to undertake an interview for them, she says.

Combating the lies

The personal achievements are harder to check and few employers bother. But a skilled interviewer can pick apart any holes in a CV, adds Ms Roberts.

While some people may view the odd lie as acceptable to get the job they think they are fully capable of doing, in areas such as social services or education, there are obvious dangers to employing a bogus carer or teacher. And a criminal records check, which is statutory in some industries, will not pick up lies concerning experience.

But some employers have had enough and are fighting back. London and Quadrant Housing Trust, which provides rented homes to low-income families, says checks on prospective employees reveal so many to have lied that about one in 15 provisional job offers the housing association makes has to be withdrawn.

This is due to the references not standing up or there being errors on the application form such as falsified sick leave. To rectify this, London and Quadrant is among an increasing number of employers turning to outside help.

Checking CVs and application forms is a growing industry, and one that Risk Advisory Group and Kroll Background Worldwide are working within.

Hedley Clark, Kroll's managing director, says: "Companies in the past have done reference checking themselves and just asked people to bring in their qualification certificates when they start.

"What's changing is that people are taking it more seriously and seeing more public instances where a CV fabrication has gone on."

Offenders fired

The extreme examples include people saying they have qualifications they don't have or covering up a period where they were in jail, he says.

Kroll helps the company to devise an application form which is designed to get to the truth in areas like employer history, professional qualifications and directorships. Applicants are warned the forms will be vetted, but that still doesn't prevent nearly one in three containing an error, says Mr Clark.

For between £75 and £300, depending on the seniority of the individual, the person's background as outlined on the form is investigated. This includes financial integrity checks and could mean getting references in different languages.

The penalties vary from being refused the job to being fired if the offender has already started work. Or as Mr Taylor's case demonstrates, the punishment can be even stronger.

Original article appears here.

-- MDT

Labels: background checks, Kroll

...access to personal identifying information benefits our society in many ways. Before legislation is passed that severely restricts such access, we should first consider the negative impacts that such laws could have. As a professional investigator, I use this data in many different ways: to track down important witnesses and uncover critical information in complex litigation; to conduct criminal background checks; to find stolen assets; and to investigate white collar crime, fraud, and other forms of criminal activity--including identity theft; and in many other investigations.

One of the most important uses of this information is conducting criminal record searches, an important component in many investigations. Since there is no publicly available national criminal record database (the Justice Department maintains such a database known as NCIC, but provides access only to law enforcement agencies), investigators must first gather an address history for the subject, then conduct searches of each jurisdiction identified.

We need access to Social Security numbers or another form of identifying information. This is typically drawn from the top portion of a credit report (called the credit header)--which contains someone's name, Social Security number, and current and prior addresses--without that, such searches become close to impossible to thoroughly conduct, thereby exposing people to serious potential risks.

For instance, in a recent investigation of a client's household employee, I found a criminal record involving a minor. The offense occurred nearly 10 years earlier in a different state. Without the ability to construct an address history for the employee. I never would have found it, and the client and his family would be in jeopardy.

In another case that occurred some years ago. I was investigating an individual who was being considered for a senior-level position within a Fortune 500 company. Using similar techniques, I not only found a criminal record for assault and battery but discovered that this person attempted to expunge his criminal record within a few days of his interview with our client.

I was also retained to investigate a potential business partner and discovered a multimillion-dollar fraud that he had committed. The complaint listed a number of fraudulent claims that the subject person had made about his background; he had also given my client the same fraudulent claims practically verbatim. Armed with this knowledge, my client decided not to pursue a $ 7 million investment that most surely would have been lost. There are many more examples like these.

If I have learned anything from my 15 years of investigative experience, it is that people lie, especially when they are trying to hide past bad acts. Far too often, potential employers or partners do not ask the right questions (or any questions, for that matter) or check information supplied by business partners and others until it is too late and the damage has been done. Reagan's axiom "trust but verify" applies here as much as it does in arms control.

Another important use of personal identification information is to differentiate between people with common names. Imagine the difficulty in searching for criminal records for someone named John Smith absent any other information unique to this person, such as his Social Security number and date of birth. This is the daunting scenario we would face were current proposals to restrict access to such information enacted.

Identity theft is a real concern and needs to be dealt with in a serious manner. However, limiting access to such information in as draconian a manner as is now under consideration would limit the ability of private citizens to protect themselves against a variety of equally dangerous threats. It may also embolden those who commit crimes, because they will know that investigating them will be more difficult and expensive.

Professional investigators play an important role because law enforcement agencies are not in the business of checking out a person's background to assess the potential risk of hiring them or doing business with them. Thus, people hire professional investigators. In certain circumstances, the information they gather may eventually convince law enforcement to become involved.

For all of these reasons, investigators are needed, and they need access to information to do their jobs. They should not be hampered by the actions of information brokers who failed to check the credentials of new customers and allowed themselves to be victimized in the process.

Labels: background checks, database, Department of Justice, identity theft

Digging for hedge-fund dirt

August 08, 2005
By Jane J. Kim
The Wall Street Journal

The exploding popularity of hedge funds is creating a boom for modern-day corporate sleuths, who are doing big business digging into these secretive investment vehicles and their managers. The investigative firms range from large, multinational companies such as Kroll Inc., a unit of Marsh & McLennan Cos., to smaller shops with just a handful of private investigators. Though their biggest clients are institutional, a growing number of wealthy investors and their family offices also are looking for information.

The costs of these reports can range from roughly $1,000 to check out a one-manager hedge fund to tens of thousands of dollars for an in-depth, detailed report on a fund with multiple managers and world-wide operations. The investigators typically are former law-enforcement agents, licensed private investigators, forensic accountants and investigative journalists.

Because hedge funds -- lightly regulated investment pools that employ a wide range of strategies and are geared to institutions and the wealthy -- aren't subject to many of the reporting requirements that apply to mutual funds, it can be difficult to get details about their assets, returns and the people who run them. Assets in hedge funds are estimated to have more than doubled to about $1 trillion during the past five years, while the number of hedge funds has swelled to more than 8,000.

There have been some high-profile blowups recently, such as KL Financial Group, a Palm Beach, Fla., hedge fund that shut down amid an investigation by regulators of allegations that it reported outsize returns while actually losing money. In the five years through 2004, the Securities and Exchange Commission brought 51 cases against hedge-fund advisers who, it asserted, defrauded investors of more than $1.1 billion.

For many investors, checking out a hedge-fund manager used to be as simple as making a few discreet calls to well-placed friends at Wall Street firms. But as more money and new players flood the industry, returns -- in the 20 percent-plus range a decade ago -- have moved closer to those of stocks and bonds. In their quest for higher returns and innovative strategies, investors increasingly are seeking out international hedge funds or managers with nontraditional backgrounds, making the usual means of gathering information more difficult, experts say.

Investigative firms verify the manager's credentials and scour public records, such as news sources, company documents, regulatory filings and court documents, including criminal filings, bankruptcy records and civil lawsuits. Though some searches have turned up outright crooks, most discoveries are more mundane: managers who padded their resumes or failed to disclose jobs that went bad. (One investigative firm found that a fund manager was banned from the national parks for indecent exposure.)

But sometimes managers have had run-ins with securities laws. Tax liens, prior bankruptcies or other signs of financial difficulties are often deal breakers for potential investors. Even evidence of an active social life can deter potential investors who worry that the person may not be singularly focused on managing the fund.

"Unlike your friends, who you want to be Renaissance men, in a hedge-fund manager you're looking for the guy that doesn't have a personality," says Randy Shain, executive vice president at First Advantage Corp.'s First Advantage CoreFacts LLC investigative unit, which produces BackTrack Reports."People who have spent a lot of time doing a lot of other things, like auto racing, means that they're away from a computer screen."

Investigative firms estimate that between 10 percent and 20 percent of their searches will turn up suspicious information. But many say that percentage has been increasing as investors flock to more exotic funds and nontraditional managers.

Whether the information that a search turns up is enough to quash a potential investor's interest in the fund depends on the investor. Some will balk if a "white lie" pops up on the manager's resume, whereas others may be reluctant to walk away after spending a significant amount of time and money looking into the fund, even if faced with evidence of criminal activity. That is especially true if the criminal conviction was long ago or if the type of activity, such as drunken driving, isn't considered "material" by the investor, says Jeff Brenner, principal at Intelysis Corp., a corporate-fraud investigation firm. "It's a character flaw, I suppose, but not one (of) business acumen."

To be sure, institutional investors such as pension funds, endowments and so-called funds of hedge funds -- which bundle stakes in different hedge funds into one investment -- conduct a fair amount of due diligence on their own, analyzing investment strategies and delving into performance. But they are increasingly relying on outside investigators to look further into a manager's background.

Some consultants and investigators, such as London-based Control Risks Group and Capco, a unit of Capital Markets NV of Belgium, also look at whether assets reported to investors, as well as the methods used to value those assets, are accurate. That is a growing concern as hedge funds have become more complicated, with multiple managers investing in increasingly hard-to-value securities, such as credit derivatives. And as more hedge funds seek control of companies through private-equity deals, they themselves are hiring investigative firms to vet the directors or management.

The Financial Investigation Services division of NCO Financial Systems Inc., a unit of NCO Group Inc., says hedge funds now make up about 30 percent of the division's revenue, up from about 8 percent three years ago. The division's private investigators are spending more time delving into the backgrounds of hedge-fund managers in Asia, Europe and the Middle East as U.S. investors look overseas for higher returns, and hedge funds set up shop in countries with less regulation. About 12 percent to 15 percent of the division's revenue now comes from overseas projects, up from less than 5 percent five years ago.

The original article apears here. For more on all things hedge fund, check out our friends at FundStreet.org.

-- MDT

Labels: background checks, Kroll, Quest

Private security firms expanding services

By Mike Levin
Business Edge
07/21/2005

The line between public and private policing is blurring in Canada as government funding for security gets stretched tighter and tighter. Most of Canada's 1,400 private investigation and security firms are tapping this trend to find new business in areas traditionally patrolled by domestic police forces.

But it is no longer just a game for gumshoes. In Ottawa, Robin St. Martin has built Iron Horse Corp. from a one-man operation in 1994 to a multimillion-dollar business by filling security gaps left by the public sector. The demand is so great, he is predicting a 35-per-cent increase in revenue for 2005. "This business is all about investigation and protection, and as the economy grows so does the need for security services," St. Martin says. "People know they will have to pay for it either by increased taxes or by hiring a company like ours." Revenue reached $1.85 million last year. This year's increase is expected to come mostly from new operations in Toronto.

Since 1998, St. Martin has geared Iron Horse to meet what he calls a phenomenal demand for licensed security guards, which he says has increased guard numbers in Ontario to 40,000 in 2004 from 28,000 in 1999. Most of Iron Horse's 100 full-time and 300 part-time employees are involved in property protection, which accounts for 55 per cent of the company's business. The company also operates a training academy and graduates are all but guaranteed a job because of a backlog of demand. "Times have changed. There's a much stronger view of this need for security because of 9/11, but also because prominent businesses know they have to have protection or face serious liabilities," St. Martin says. He adds that the investigations side of his company is also becoming broader.

Like most security companies, Iron Horse offers diversified services and can investigate everything from insurance fraud to theft of intellectual property and marital infidelity.
The scope is becoming so wide that some agencies see their duties as risk-management consultants as much as private investigators. "Much of the investigation business is about getting information for police or lawyers to use in the legal system. But there's also a growing need within corporations to be able to protect themselves," says Bill Joynt, president of the Council of Private Investigators - Ontario. "Corporate clients today have all sorts of different requirements and you never know what will pop up next. PIs (private investigators) have to keep pace with crime sophistication," says Joynt, who owns the 110-employee Investigators Group agency in Toronto.

According to many security executives, breaking insurance scams, investigating workers' compensation claims, finding missing people and uncovering information for lawyers remain their core businesses. But they are susceptible to market forces. "There are parts of the business that come and go, like surveillance. It just shows that agencies have to be far more diversified today and flexible for when those slumps hit," says Geoff Frisby, owner of LCR Consulting Ltd., a two-person agency in Fort Saskatchewan, a suburb of Edmonton.

One effect has been increased co-operation in what was once a fiercely competitive industry. Security companies will now subcontract their expertise to other agencies. James Thomasen, president of the Private Investigators Association of British Columbia, calls it "service by affiliation" and says it allows smaller agencies to call themselves full-service companies. One area of investigations that is growing is background checks.

"I've seen a rise in the due-diligence part of employment, where companies want to make sure that prospective employees are who they say they are," says Thomasen, who owns the two'-person Pinnacle Investigations and Security Services Ltd. In Vancouver. "It's expanded into the international level and we're doing background checks in places like the Philippines and the United Kingdom."

Another area that is providing growth opportunities is combating the rapidly evolving styles of theft and fraud. New forms of loss protection often involve technology such as high-end audio-visual surveillance and cyber-tracking equipment. "The electronic side is new and getting bigger, especially when it deals with identity theft," says John Farinaccio, director of the Canadian Private Investigators' Resource Centre in Montreal. "The demand is being driven by the U.S., because what happens down there comes up to Canada."

A 2003 study on economic crime by PricewaterhouseCoopers found that one-third of companies in North America were victims of fraud and theft, and that the problem of cybercrime was increasing by double digits annually.

As the crimes become increasingly sophisticated, private investigators have to know how to dig deep for information. Accessing personal information also has become harder since investigators now must have investigative body status under the Personal Information Protection and Electronic Documents Act (PIPEDA) in order to be able to thoroughly examine someone's background.

That is a status that most PIs do not have. In fact, most PIs do not need any certification at all. They do need a licence from Industry Canada, but requirements (except in B.C. and Newfoundland, which have two-year supervisory conditions on licensing) are less stringent than for a driver's permit, says Iron Horse's St. Martin.

"It's the same thing for licensing security guards in Ontario, no minimum standards, and I think it's pretty bad because the business is now all about reputation. When PIPEDA came in it caused a bit of a slump, but I think it was necessary," he says. "This means as a full-service security company we absolutely must do our due diligence properly and provide top-quality customer service," St. Martin says.

St. Martin, who is about to expand Iron Horse into Quebec, believes there is a need for a national association to create adequate certification for an industry that is now starting to consolidate. "There used to be a lot of mom'-and-pop shops (in the security guard business) but they're getting bought up by the public multinationals like Securitas and Garda. This is a trend in the whole industry, becoming international because security issues go across borders," he says.

Labels: background checks, identity theft

Labels: background checks, database

Choicepoint: Blur

By Deborah Gage
and John McCormick
June 14, 2005

Steven Calderon was into his second week working as a security guard for Fry's Electronics when Anaheim, Calif., police walked in and arrested him. Fry's had requested a background check on Calderon, which was done by The Screening Network, a service of ChoicePoint. Calderon spent the next week in jail. No one stopped to question—or verify—whether the background check was accurate in the first place. It wasn't.

Labels: background checks, database

Retailer faulted in molestation case

By Holly Johnson
The Arizona Republic
Jun. 17, 2005

SCOTTSDALE - A Phoenix law firm has filed a "Jane Doe" lawsuit against big-box retailer Wal-Mart for failing to check the background of an employee accused of molesting several young girls in a Scottsdale store.

The suit, filed by the law offices of Gregory A. Patton in Maricopa County Superior Court, alleges that Wal-Mart either did not check Mark D. Ricchetti's criminal background or hired him knowing of previous criminal charges when he came to work as a greeter in the company's store on Northsight Boulevard in 1998.

Both Wal-Mart and Ricchetti are named as defendants in the suit, which comes as Ricchetti is expected at a preliminary hearing today.

Ricchetti, 35, was charged with gross sexual imposition, a felony, in Columbus, Ohio in March 1998 after being accused of molesting young girls at a Big Bear market in Upper Arlington. In police reports from that incident, a mother says that Ricchetti "put his hand down her daughter's shirt, while he was passing out stickers to children in the store."

The Ohio case closely mirrors allegations now pending against Ricchetti, who is accused of fondling 3- and 4-year-old girls on two occasions June 1 and 2 in Scottsdale. A few days later, the mothers of two more reputed victims contacted police, police Detective Sam Bailey said.

He has been charged with three counts of sexual abuse and one count of child molestation.

One mother said she had her back turned briefly while pricing diapers when Ricchetti, a customer service employee who greets customers and, as in Ohio, passes out stickers, tickled her daughter's chest under her dress. When she reported the incident to police, she was told another mother had come forward with similar allegations.

Before Scottsdale, Ricchetti lived in Worthington, Ohio, and Lithonia, Ga. Attorney Rob Mosier of the law firm's Santa Ana, Calif., office said Wal-Mart should have checked Ricchetti's background before hiring him. "This guy was a customer-service employee. He's supposed to stay at the front of the store," Mosier said, adding that mothers involved in the suit have indicated Ricchetti would place stickers on young girls' chests and routinely followed them around the store.

"He would leave his post for long periods of time . . . you just have a guy being strange, being inappropriate, and following kids around, and Wal-Mart and its employees and managers should have been on notice," Mosier said.

The company began requiring background checks of all store associates in September 2004, according to Wal-Mart spokesman Marty Heires. They do not run background checks on current employees or associates hired before that date, however. The application does screen for felony convictions, he said.

Labels: background checks

Welcome to the murky world of Kroll Inc - the private CIA

By Ben Hills
June 25, 2005

They helped track down billions of dollars of treasure looted from Kuwait by Saddam Hussein. They finally proved that "God's Banker", Roberto Calvi, found hanging under London's Blackfriars Bridge with bricks in his pockets, was murdered. They were hired by Prince Charles to find the "Princess Di tapes".

Move over James Bond, this is the real-life fantasy world of the thousands of former cops and spooks, bodyguards, forensic accountants, journalists and criminal lawyers who made up what claims to be "the world's foremost independent risk consulting company", Kroll Inc.

Not for nothing did a former executive of the company describe Kroll as "like a private CIA".

"Of course, there's lots of boring stuff too - corporate profiles, background checks on employees, data recovery," says a rival in the business, "But these are the ones that get the adrenaline going."

In the process, inevitably for a company employing large numbers of former CIA, FBI and Special Forces people, the company has occasionally been accused of misconduct - the bugging scandal in Brazil is just the latest in which Kroll Inc has been embroiled.

Founded in 1972 by a New York assistant district attorney, Jules Kroll, the company expanded aggressively across America and internationally into 60 countries. In Australia, Kroll formed an ongoing partnership with the accountancy firm Ferrier Hodgson.

Its customers were a who's who of the business world: Ford, Citibank, Hilton hotels, drug company Pfizer and Nestle among them. It has also worked for the US government.

Although its bread and butter work was legal corporate intelligence, such as profiling takeover targets, in countries such as Brazil, and now Iraq, where kidnapping is rampant, Kroll also specialised in "close body work" - bodyguards, protection and ransom.

In May last year, Julius Kroll received an offer he could not refuse. Marsh & McLennan, the New York insurance broker which claims to be the world's largest, took over Kroll for an eye-popping $US1.9 billion ($2.46 billion), more than $US100 million of which was pocketed by its founder.

Capitalised at $US6 billion, and with 60,000 employees in more than 100 countries - including Australia - Marsh & McLennan was the colossus of the industry, claiming a 40 per cent share of the global market for insurance broking.

But the company saw insurance as a mature market and wanted to expand into the related risk-management industry. No one could have foreseen when the takeover deal was signed in May last year that the sky was about to fall in.

Last October, New York's crusading district attorney, Eliot Spitzer, filed suit against Marsh & McLennan, accusing the company of having, for years, colluded with big insurance companies to "cheat customers in an elaborate charade of price fixing and bid rigging".

The three insurers he named were the giants American International Group, Zurich America Insurance Company and Ace Ltd. Adding spice to the story was the relationship between them: AIG was headed by the 79-year-old insurance industry legend Maurice "Hank" Greenberg; his son Jeffrey ran Marsh & McLennan, and; another son, Evan, was boss of Ace.

Spitzer claimed that Marsh & McLennan jacked up insurance premiums - thus increasing its commissions, and the profits of the insurers - with "fake bids, collusion, improper steering of business, payments by insurers to avoid solicitation of competing of competing quotes, and threats against those resisting participation in the fraudulent schemes".

The company "acted, in short, less like a broker with a fiduciary obligation to its clients than as the linchpin of a racket", Spitzer said.

Marsh & McLennan's shares tumbled more than 25 per cent, despite pledging it was "committed to getting all the facts, determining any incidence of improper behaviour and dealing appropriately with any wrongdoing".

Jeffrey Greenberg was forced to resign. His replacement was a man the company had inherited a few months earlier when it took over Kroll Inc, Michael Cherkasky, who was uniquely placed to steer the company through the scandal which threatened to destroy it.

For 16 years, Cherkasky was a white-collar crime buster for the New York District Attorney's office; Spitzer, now prosecuting Marsh & McLennan, was his protege. In 1994, Cherkasky joined Kroll - gamekeeper become poacher - working his way up to the chief executive's office.

Within three months, Cherkasky had overseen a clean-out of Marsh & McLennan's board, and the sacking of most of the executives deemed accountable for the corruption. In January, he persuaded Spitzer to drop the civil charges against the company by pledging to pay $US850 million to clients around the world - including Australia - that Marsh & McLennan had defrauded.

Criminal charges are still pending against 10 former executives of Marsh & McLennan and the insurance companies. In February, Kathryn Winter, the 50-year-old managing director of Marsh Inc, pleaded guilty to fraud in the Manhattan State Superior Court. She faces up to four years' jail, depending on how keenly she co-operates with Spitzer's investigators.

Cherkasky personally apologised to 120 of his biggest clients, and showed thousands of staff the door in a bid to restore the ailing giant to profitability.

He is now engaged on an even greater challenge - to convince outraged clients who had been deserting the company in droves, that Marsh & McLennan is serious about its reforms.

Labels: AIG, background checks, Eliot Spitzer, Kroll

Investigating The Executives

FORBES
April 21, 2005
Penelope Patsuris

NEW YORK - The search for new CEOs will never be the same. Everything from Dennis Kozlowski to Sarbanes-Oxley has seen to that.

The biggest winners in this brave new and very litigious world: private investigation outfits. "There's a big trend in doing due diligence on high-level executive job candidates," says James Rowe, vice president of the investigative firm the James Mintz Group. A lifetime ago, Rowe was an investigator for the U.S. Senate Watergate Committee. "And we're also vetting lots of potential board members. This has really boosted our business; it's a real growth area."

Rowe says his firm's bread-and-butter used to be deal-related due diligence work, checking out executives ahead of mergers, acquisitions and partnerships. "Now we do as much work on CEOs and board members as we do on deals." These background checks can cost anywhere from $2,000 to as much as $20,000, depending on how extensive they are.

The clients that come to James Mintz are generally the executive search firms such as Spencer Stuart and Heidrick & Struggles. "They talk to colleagues about the person's capabilities," says Rowe, "while we look for a criminal past or financial troubles like bankruptcies or tax liens."

Spencer Stuart partner John Wood says his company now uses outside investigative firms to vet all of its senior-level hires. "That didn't used to be the case," he adds.

And you'd be amazed at what firms such as James Mintz and Kroll sometimes turn up. "We find that in 10% to 15% of C-suite searches we see red flags, like fake degrees and criminal filings," says Peter Turecek, a managing director at Kroll's business intelligence and investigations practice. "We came across one guy once with a child-rape conviction, and an executive at an acquisition target company who turned out to have been a bagman in a murder. We also discovered a CFO that stole his neighbor's sod because he couldn't wait to finish his lawn. What's he doing if he can't meet his quarterly numbers?"

Thanks to Sarbanes-Oxley, investigators are also now on the hunt for matters that sound more mundane but are just as critical in picking a new executive. "Now a major focus for us is corporate stewardship," says Rowe. "Were there any securities issues during this person's tenure that would raise issues about their judgment? We look for filings with the Securities and Exchange Commission, OSHA, the Environmental Protection Agency and the Federal Trade Commission, depending on the person. Companies want a much more comprehensive look."

What's more surprising than the skeletons that these investigations turn up is that they've stayed hidden in the first place. That's why the folks at Verified Person, a startup co-founded by former Apple (nasdaq: AAPL - news - people ) and Pepsi (nyse: PEP - news - people ) CEO John Scully, conduct continual screenings of existing employees every few weeks. The New York-based outfit also checks out C-level candidates as well.

"If it's your first offense you generally don't go to jail," says Verified Person CEO Tal Moise. "Only 5% of felons get prison time. Most just get probation or community service. People use vacation or sick days to go to court."

And he says there is no law that says employers must be notified when a staffer runs afoul of the law. "Employers assume that they'd be aware of something like that," says Moise. "But for every 1,000 employees we check, we find one or two felonies or major misdemeanors--like assault and battery or drug possession--in that population."

To be sure, such transgressions are far less common among the executive ranks. "By and large these people are so busy doing their jobs that they don't have much time to get into trouble," says Spencer Stuart's John Wood. But for those who do, it's now a lot harder to keep their misdeeds under wraps.

Labels: background checks, Dennis Kozlowski, Mintz Group

Labels: AIG, background checks, General Re

Labels: background checks

School Districts Consider P.I. for Background Checks

April 25, 2005
By Sarah Thomsen

Both the Green Bay and Oconto Falls school districts are considering using a private investigative firm to conduct their background checks. The school districts are looking at their options after the Green Bay public school district's background check failed to show out-of-state felony convictions against student liaison Frank Smith, who resigned last month after his arrest on charges of drug possession and domestic abuse.

A year-and-a-half ago, Oconto Falls started running checks through a Department of Justice web site, the same one that Green Bay school district officials say failed them. When Oconto Falls superintendent Dave Polashek realized that, he started considering a private investigator. Though it only takes a minute for Oconto Falls administrators to pull up a criminal history on the DOJ web site, the district says it's not good enough any more.

"Has to do with people coming in from out of state. That's more of a challenge trying to get those databases that may exist in other places, so that's something we may refer to a private investigator," Polashek said. The district says its two Internet searches have limited databases and a private investigator could find a lot more than it could. "It's the issue of balance of time, cost, and really how much more do they provide compared to what you get right now," Polashek said.

Craig Warrick is a retired assistant principal-turned-private investigator. He says schools need outside help. When new teachers apply for a license, the Department of Public Instruction runs a check on them but by law only crimes related to children are reported to the district; the district has to find out the rest themselves. "The law, statute, says 'substantially related to welfare of children,' therefore DPI is doing their job in not reporting some crimes that they're not supposed to but that also puts the onus back on the school district," Warrick said.

If the schools go ahead with this option, both Green Bay and Oconto Falls administrators tell us they would probably go through a private investigation firm, get a subscription to the national databases, then pay about $20 for each person they put through checks on those databases.

Labels: background checks, database

...TIAA-CREF hired one Sonia Radencovich for a tech position without checking her background. It seems that Sonia came from a "preferred vendor" and TIAA-CREF assumed the vendor had checked her background.

Unfortunately, under her other name, Sonia Howe, less than two weeks before starting at TIAA-CREF she was sentenced to four years in prison for her part in the Martin Frankel insurance fraud that landed Frankel in jail for 16 years after he disappeared amid smoking documents in a fireplace in his Connecticut mansion....

Tek Systems used a unit of Kroll Inc., a well-known consulting firm, to conduct its background checks. A copy of its report on Howe -- obtained by Newsweek -- shows that she had used many different names over the years, including her real name. A spokeswoman for Kroll said Tek ordered only a "standard criminal background procedure" to search records over seven years just in the counties where she lived. The search didn't include Connecticut, where Howe was convicted in federal court (a Google search of "Sonia Howe" turns up many hits that include government filings citing her sentencing and her ties to Frankel, who's serving 16 years).

Labels: background checks, Peter Henning

To ensure continued compliance with the privacy provisions of the federal Gramm-Leach-Bliley Act, and the subsequent regulations adopted by the Federal Trade Commission ("GLB"), the permissible purpose screens presented as part of the AutoTrackXP log in process have been changed. These industry specific screens contain new language that will now correspond to exceptions under the law.

To maintain compliance with GLB, a user must now select only a single purpose from the presented list. Misrepresenting your access purpose is a violation of our subscriber agreement and federal and state laws. Any use of ChoicePoint information other than for the selected permissible purpose is grounds for account termination and may be referred to the Federal Trade Commission or to the appropriate state investigative agency.

Designated permissible purpose changes can be made at any time after log in by clicking the link marked "PERMISSIBLE USE" on the top of each page.

• For use by a person holding a legal or beneficial interest relating to the consumer.
  

• For use as necessary to effect, administer, or enforce a transaction requested or authorized by the consumer, including location for collection of a delinquent account.
  

• For use in complying with a properly authorized civil, criminal, or regulatory investigation, subpoena, or summons by federal, state, or local authorities.
  

• For use to protect against or prevent actual or potential fraud, unauthorized transactions, claims, or other liability.

• For any other use permitted or otherwise not restricted by law and which may reasonably be expected to be part of the normal course and scope of your business or profession.

Labels: background checks

Want someone else's Social Security number? It's $35 at www.secret-info.com. It's $45 at www.iinfosearch.com, where users also can sign up for a report containing an individual's credit-card charges, as well as an e-mail with other "tips, secrets & spy info!" The Web site Gum-shoes.com promises that "if the information is out there, our licensed investigators can find it."

Although Social Security numbers are one of the most powerful pieces of personal information an identity thief can possess, they remain widely and inexpensively available despite public outcry and the threat of a congressional crackdown after breaches at large information brokers.

Brokers such as ChoicePoint Inc. and LexisNexis have pledged to restrict the availability of such data after personal information on more than 175,000 people was purloined from the two firms by identity thieves posing as legitimate businesspeople.

So far, neither those moves nor revelations of a series of breaches at major banks and universities has curbed a multitiered and sometimes shadowy marketplace of selling and re-selling personal data that is vulnerable to similar fraud.

Labels: background checks

NC Bill Approved To Fix Rest Home Background Check Procedure

The NC General Assembly appoved a bill Monday to define how information in a background check should be distributed. Read the article here.

Bad Data Fouls Background Checks

While recent news has folks concerned about identity theft, inaccurate data is just as big a danger -- and individuals are left to police the problem themselves. Read the article here.

Data Merchants Have Got Your Numbers

Privacy advocates have long complained about scant regulation of the data-brokering companies that traffic in dossiers on almost every adult American. Read the article here.

Hiring Presents Tricky Areas for Employers

Employee background checks used to be a "hard sell" when Nadell started his Chatsworth-based employment screening firm in 1994. ... House Bill 1625, would shield employers from legal liability for giving information about a former or current employee's job performance to a prospective employer. Read the article here.

Background Checks Vary; Schools Fear Surprises

... and while local schools all recognize the need to be aware of improper activities by prospective athletes, none conducts a routine criminal background check. ... Read the article here.

Labels: background checks, identity theft