Success Factors

Case Study


Business Advisors

Annabelle Reitman   H   *
Annabelle Reitman has over 30 years experience in career coaching and counseling with a diverse clientele, in workshops or individual consultations.

Bennet Simonton   H   *
Bennet Simonton
34 years managing people, four successful turnarounds including a nuclear-powered cruiser and 1300 person unionized group. Leadership through creating trust and ownership by employees.

Beth Zimmer   H   *
Beth Zimmer
15 years in varied leadership roles in professional & executive search Experience consulting with Fortune 100 companies with regard to staffing processes and recruitment

Collyn L. DeNio    H   *
Seasoned and Senior Human Capital Business Professional who has successfully lead building and rebuilding human capital operations in a variety of organizations including union/non union and private and public entities.

Gene Moore   H   *

Successful with both sides of the Hiring Game, assists both the employer in landing the best candidate and the professional job seeker with their ?Blue Sky? (dream) job.

Herb Cohen   H   *
Herb Cohen is the former founder and CEO of MOHR Retail a leading training company. Herb is now Sr. Managing Partner at Performance Connections

Jillian Weiss   H   *
Jillian Weiss
I am a professor of Law and Society at Ramapo College. I have a Ph.D., J.D. and 20 years of experience with complex organizations. My area of research is gender identity in the workplace

Joanne Bintliff-Ritchie   H   *
Human Resources executive with 25 years experience in managing all HR disciplines. Specialties include Organization Performance, Mergers and Acquisitions, Change Management, and Talent Management.

Jonathan Trefimow   H   *
Jonathan Trefimow
Employment Law attorney for Epstein Becker & Green and facilitator for the free "Law Advisor Connection" on

Pam Moore   H   *
Ms. Moore concentrates in preventive employment relations, EEO agency proceedings and employment litigation. She has significant experience in the full range of employment law issues and is a partner with the firm at McCarter&English.

Peter Altuch   H   *
Peter Altuch
Peter Altuch, President of View Peter Altuch's profile on LinkedIn

Ranald Hendriks   H   *
Ranald Hendriks
20 years practical HR experience consulting to hundreds of organisations in New Zealand and Australia, Ranald has coaching experience in behaviour modification and strategic alignment.

Stacey Spirito, SPHR   H   *
Stacey is a Human Resources and Workforce Development professional and consultant. She researches and develops instructional materials with a focus on teaching organizations how to communicate and create a more effective workplace.

Yogita Joshi    H   *
Extensive knowledge recruitment and T&D -handled large number of HR Oracle Applications related projects, covering the whole eBusiness implementation lifecycle.

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Wendy Rosen

I'm involved in defending myself and countersuing a mega staffing company that failed to check even one reference on a resume. ...and charged me over $8000 for this "service".

I'm a small business owner who three years ago became a victim of identity theft and check fraud... thanks to Spherion who told me “we know this guy”, “he's okay”.

If you've been watching the upcoming case (Red Cross) California Superior Court vs Spherion as well as the 47 individual indictments by Spherion employees will likely change the way that SOME staffing companies do business in the future.

The DA hopes PROVE that the recruiter was not only negligent, but KNEW that they were hiring X-cons for the Red Cross call centers.

The Red Cross is not alone... but most victims are small businesses like mine... or even smaller ones without the resources to fight back.

I feel it's important for other small business owners like myself to learn about the inconsistent and perhaps in some cases unethical business practices offered by some in the staffing industry.

Unless the staffing industry sets it's own standards like ISO certification and quality management, and even perhaps audits of staffing firm practices.

Attack of the Serial Embezzler (Excerpt)
By David Callahan
SmartCEO magazine 2004

In the summer of 2003, most of the country was laughing at check fraud. The Steven Spielberg movie Catch Me If You Can was a smash hit and audiences delighted as Tom Hanks portrayed an 1960s-era FBI agent giving chase to a gifted teenage "paper hanger." The movie was based on the true story of Frank Abagnale Jr., one of the most notorious check fraudsters of all time, and joyfully tracked his life as he passed himself off as a pilot, doctor and attorney. It is easy to watch the movie and come to the conclusion that the stunts Abagnale pulled could not happen today, but the sad truth is that identity theft (and the fraud that always accompanies it) represents a mushrooming problem, not a shrinking one.

For U.S. companies, the costs of fraud are now estimated to exceed $400 billion annually - 1,100 times more money than Catch Me If You Can grossed at the box office. Direct employee theft represents about 10% of that figure. In other words, the modern day realities of fraud are no laughing matter and the topic deserves massive national discussion. But it doesn't get it largely because the victims of fraud often feel so ashamed, that they help cover up the crime on behalf of the criminals who steal from them.
In the summer of 2003, one small business owner in Baltimore was not laughing at check fraud.

The CEO discovered that a bookkeeper, had managed to pass fraudulent company checks, including a check for a $55,000 Lexus. When the amount of damage was finally decoded, the stolen amount totaled $127,383.75.

Fortunately for you and everyone else who owns a business in Baltimore, she took action and became a crime-fighter. Far too often, that is simply not what happens.

The serial embezzler was hired as a temporary worker after a referral from a professional staffing firm. Three weeks later, he was hired full-time as a simple bookkeeper. The cost of the referral and the three-week wages in the 'temp-to-perm' situation was $8,850.

The business owner assumed that a basic reference check had been performed by the staffing firm. "When he applied for placement, the number one listing on his resume was the Salvation Army and they did not even call the Salvation Army”.

Had they called, they might have discovered that the applicant had been dismissed for cause. The former employer had begun piecing together the elements of check fraud.

But even as the justice system tried to catch up with him, the applicant seemed like a great hire. "'He looks like the perfect minority employee," "He's tall, good looking, wears a tie, dresses to the nines, looks like 'Mr. Professional.' He's eloquent in every way and smiles at everyone."

The new "temp" was given access to the bank statements only. He had no access to checks - those were under lock and key in an office, but the statements were actually more crucial to his scheme.

The key to the fraud scheme was the bank statements. With all the mega-bank mergers, banks continue to cut costs everywhere they can. "Years ago, your statement used to arrive on a piece of paper that was somewhat watermarked or had printed colors or maybe wavy lines in the background," "That's not true anymore. These were on white paper. So he was scanning them, changing numbers and re-printing them out."

The legal quagmire
Indeed, when reviewing the checks, it is amazing to see the brazenness. If the movie Catch Me If You Can teaches one almost universal truth about fraud, it is that audaciousness is common among "paper hangers." At one point, the temp wrote a check to cover his bail bond from a previous scheme. "He wrote a check to his lawyer for his legal fees!" says the company CPA.

Part of the job
For CEOs, in any fraud case, they can have only one of three roles - crime fighter, criminal or enabler. There are no other options.
Whatever the reason, prosecutors (who routinely carry personal risk) have little sympathy for fraud victims who cover the sins of their attackers. CEOs must find the courage to confront these people.

Becoming a crime-fighter
This Baltimore company was not afraid to confront their attacker. A full audit had not yet been made, but the CEO immediately hired a private investigator and former FBI agent who quickly secured a signed confession, which was promptly turned over to the states attorney's office.

The investigator says the serial nature of the crime stems from CEOs who are unwilling to prosecute. "I've seen this sort of fraud a lot and the beauty of this kind of fraud is that in many instances, the business owners are so embarrassed by being taken, that they won't press charges."

Indeed, the only thing that may be able to stop this criminal is a jail sentence. "Since he's been out on bail, he's ripped off several other employers and used the CEO victim as a reference.

References, it seems, are an embezzler's best friend. They are far easier to forge than a check. And, like the bad checks, the embezzler counts on lack of scrutiny from those who vet him. In this case, all references on the resume were correct and included phone contact information. (They were victims too!) The “temp” added some allegedly fake reference letters from his days in the U.S. Army.

One of the first things CEOs like to do, upon discovering a fraud is fire the person forcefully. Most fraud experts say this is a bad idea - like cutting a fish loose once you've finally snagged it. This CEO kept contact with the temp and her P.I. was able to convince him to come in and talk - leading to a confession.

The temp may have thought that by only admitting to a portion of the crime he was still concealing the vast majority of it, but in reality, admitting to fraud at all was a key mistake on his part.

The CEO was willing to stay in cordial contact with the temp was immensely helpful to their cause. Another crucial choice by the CEO was not sitting back and waiting for others to do their jobs. In short, nobody is motivated to act quickly. "This CEO did the work for the police, did the work for the bank, did the work for the lawyers, did the work for everyone," claims the company CEO.

Even companies with extensive embezzlement insurance can expect to have to act quickly on behalf of other parties. Identity theft is becoming so prevalent, the insurance costs of this are probably going to skyrocket. If you look at the amount that identity theft has grown in the last year or two, pretty soon we're not going to be able to afford insurance over this, says the CEO

And the banks haven't got their software up and running and the firms that you deal with - the check clearing firms - haven't got their software in a situation where they can identify the problem."

The fight over accountability
As for the staffing firm that referred the temp, the CEO remains in a dispute with them. "One of the problems here is that when you call up a staffing firm, you are assuming that a limited amount of screening has been done - at least a small due diligence. All their websites give you language that assures you that you'll get the best possible candidate."
"If I recommend a person to a client and I collect a fee for it, I would hope I give my due diligence, because I'm liable. We rely on third parties to fulfill client needs. This is a third party provider. Staffing firms - these guys are at every professional trade show, every large seminar, says the company CPA."

"What's amazing is that when the staffing firm found out that this happened and knew that we were a good long-term client of theirs, that they did not even offer to refund," claims the CEO.

"They rejected the concept of refunding a fee for this guy. All they wanted to do was send us more [candidates]. I said, 'I don't think so, I want my money back.'"

Amazingly, three years later, the criminal continues to circulate in the labor pool. "When he went to jail from our offense, he told his friends that he had been recalled to the military and was going to Iraq," says the CEO. "Within a couple of days he was out on bail once again, for his second offense and it is my understanding that he has been since been hired by a third company or been placed by yet another staffing firm.

Whether all the staffing firms have been alerted to the fact that he's out looking for work is another story."

In court documents, the criminal said that he currently worked for a major insurance Group. When contacted the company, verified that he did indeed work there very briefly as a temp, but had no access to company funds. He had been placed there by a staffing agency and the HR director at the insurance company was surprised that a person with Jackson's history had so easily continued to beat their system.

A violent crime
In the final analysis, serial embezzlers exist because too many CEOs allow them to exist. There are not enough crime-fighters out there and way too many enablers.

I learned how true this is when I tried to reconstruct the temps path after leaving the Rosen Group. A tip led me to a very small private school. I contacted the Academy and could not get my phone calls returned. The headmaster admitted that the temp had indeed worked there but refused to talk to me about anything else. He didn't even want to listen to what my article was about. I asked him if he was acting on advice from a lawyer. "No," he told me. "It's just what I think I should do."
Unfortunately, this reaction is all too common. CEOs worry more about the damage to their own reputations or to their company image than worry about the damage and suffering an embezzler is causing in the community. They worry that it will affect a merger or will damage fundraising or customer relationships.

Embezzlers often select companies that they judge as "sensitive" - entities which would prefer to live with the economic loss than to live with the publicity of fraud. In this case, an arts organization, two schools and at least one other non-profit are all victims.

If that means a non-profit has to admit that money donated to help society was lost, so be it. The perpetrator needs to be stopped - they won't stop on their own.

I asked the CEO why it was that many other business owners don't act as s/he did. "I don't understand that," s/he said. "Sharing information about these kinds of things should be part of our community...Small business people have enough trouble on their own and if we can help each other out, we'll all be better off."

Perhaps the biggest reason many CEOs become enablers instead of crime-fighters is because they fear retribution or worry about making make matters worse. The reality of speaking up is that it is selfless - it helps everyone except the place where the damage has already been done. Even though this company was able to recover much of her money back, the damage from the entire episode is lasting and has changed her company.

"We have employees that are not here due to the rift that opened up," she admits. "Everyone in the company was just terrified. My production manager came in and said to me one day , 'I don't know how you are taking this the way you are - you are really calm.'

I said, I have to keep my eye on the ball and getting emotional over this isn't going to help. It took a couple days to figure out what the limit of the damage was - thank God I had enough cash flow. The company was safe. So now all I had to do was figure out how to fix it all.

The loss of corporate camaraderie and trust may be the hardest piece for CEOs to pick up. "They say white-collar crime is non-violent," notes the CEO. "No crime is non-violent when it can put people's jobs at risk and upset people's lives to this extent. It is quite violent. You may not see bruises, but the scars are internal. It changes the way you do business and changes everything about your business. It certainly changes the way you perceive people and your trust level...The core issue is trust and trust takes time. People don't know whether to trust each other. The people who worked closely with him felt as violated as I did."

Update It's now Oct 31, 2006....
State prosecutor was weak and lost the case (with a SIGNED confession). Nullified Jury

The staffing firm sued the CEO for charges of extortion, defamation and RICO. The judge dropped most of the charges leaving one small (weak) defamation charge that requires the CEO's insurance company to continue covering the expense of the defense.

The small business CEO has countersued the publicly held billion dollar staffing company charging unfair business practices, fraud and negligence.

At no time has the staffing firm offered a refund of the $8,850 placement fee.

The Department of Justice is considering a federal court case in the matter.

The temp continues to commit more crimes.... and has served a little time for other crimes. A true socio-path... he thinks he's smarter than all of us (and he is). The system will never catch up with guys like this... our prisons are for violent offenders, not well dressed white collar criminals.

Three years later, the costs of this problem now exceed $500,000 for the CEO. For staffing firms, a typical case with a jury trial can yield judgements and/or settlements that hover between $500,000-800,000.

The sad part of this is that small locally owned staffing firms who offer a "real service" are often faced with competing with these large firms that monopolize the market with false advertising, exaggerated claims and bad business practices.

Perhaps these court cases should be published in SEC reports to stockholders... it certainly would change the "value" of stock!

Please reply if you have any knowledge of the policies and practices in any large staffing firm that may lead to problems, court cases, settlements etc like these.


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