Follow-up background checks

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Follow-up background checks

Two cases, one lesson learned: Follow-up background searches are sometimes required on key people.

Rob’s story

Rob specialized in adverting for web-based companies, and an advertising agency wanted to get someone who was experienced in this field. The hire was a good hire, and both Rob and the agency prospered through their joint talents. The relationship went well for the first three years, at least according to the advertising agency, and then Rob’s productivity declined. They all agreed that it had a lot to do with the web-based industry and the difficult time they were all facing.

The owner of the agency then hired Sharon. Sharon was a well-seasoned veteran of the adverting business, and did not get along at all with Rob. The owner of the advertising firm guessed that this was a territorial issue, or jealousy. In short, the owner concluded, if they are both producing, lets just keep them apart so we can get the work done.

Sharon eclipsed Rob within two months of her hire date. She had more clients, more work, and more new leads. Rob seemed to get the message, the owner recalled, and began setting up lots of meetings and traveling to spend time with current and prospective clients. In spite of this effort he brought in no knew business, and the business he had was lapsing.

Sharon then came to the owner and said that Rob was circulating rumors that the company was in danger of failing. The owner didn’t know whom to believe, but he knew he could no longer just trust his own judgment.

The owner hired a private investigator to review the computer files, and to tail Rob to some of his meetings. The evidence was clear and convincing: Rob had started a new advertising company with is wife. E-mails were being sent to and from clients of Rob’s that were not clients of the advertising agency. Further, Rob had co-opted one of the designers to do work for Rob’s secret firm and send designs and layouts to Rob’s personal clients. Further still, when Rob was tailed on his way to an “appointment,” he went to the store, purchased some groceries, and then went home. This happened both days he was tailed.

A search of the Secretary of States Office showed that Rob and his wife Joyce had registered a trade name, J&R Advertising, approximately when Rob’s production began to fall off. In retrospect the owner said he should have known: Personal items began disappearing from Rob’s office, and he became less and less interested in the activities of work.

A follow up background check would have found that his wife had been fired from another advertising agency for directing smaller clients to her own firm. It would also have found that Rob and Joyce were up to their eye balls in debt and that they had already registered their trade name for the competing with the adverting agency.

Don’s story

Don, a comptroller for, began to display more and more wealth..

Don had been a comptroller for a plastics manufacturing company for 12 years. He used a mirrored supplier scheme to divert money from the company. The theft began in his second year and continued unabated for 10 years. He set up a few accounts that were similar in name to suppliers of bulk goods from which the company ordered on a regular basis. The low level scheme allowed him to steal a total of $2,832,142.

What brought attention to the scheme was his lifestyle. Since he had been working with the firm his combined total gross earnings for the last ten years was only $630,000, and he lived so far outside his means as to be ridiculous. He had a 12 acre home with a custom pool, stables, a dozen or so horses, overseas vacations, …. The home site, with amenities, was valued at over $750,000 and there was no debt on the home. A dozen registered Arabian horses with an average value of $15,000 is a total of $180,000. This is a combined value $830,000.

After a decade of theft, several of the owners of the company began to wonder where Don was getting his money. An audit of the books found that he was getting it from them. A simple means versus ability test would have picked up this life style issue many years earlier.

Don will be eligible for release in another 7 years. If he applies to work at your firm, will you do even an initial background check on him?

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