News organizations worldwide are reporting that Leslie Lapayowker, a former Airbnb "super host" and guest at Carlos Del Olmo's residence through Airbnb, was a victim of sexual assault from Del Olmo during her stay. Lapayowker has filed a lawsuit against Airbnb for negligence in reporting Del Olmo's previous criminal history.
Lapayowker alleges that Del Olmo would make suggestive comments towards her, pound on her windshield while she was in the vehicle, and scream at his son loud enough for her to hear through the attached studio she was renting for the month. She left the studio after three nights but returned to pick up a few items that she had left. Del Olmo let her inside, trapped her in the room, masturbated in front of her, ejaculated into a trash can, then as he let her leave stated: "Don't forget to leave me a positive review on Airbnb."
Since Lapayowker has reported the incident to the police and Airbnb, Airbnb removed Del Olmo from their website. The attorney representing Ms. Lapayowker discovered through Del Olmo's criminal records that he had been arrested and charged in 2013 for the battery. He was accused of pulling his former girlfriend by her hair, dragging her from the back to the front seat of his car while his child was in the vehicle. Del Olmo was never convicted but was referred to as an anger management program. Airbnb stated that they had done a background check on Del Olmo, but Lapayowker is suing for not disclosing the arrest to her and allowing him to host on the website.
Two questions remain: Was their background check provider thorough enough to report back the domestic violence arrest? If so, why did Airbnb still approve Del Olmo?
Background Check Providers-Did they report enough?
If the provider did not report back the arrest in the background check results, it would not be a surprise. We have discussed in our blog several times about how there are many online background check providers out there, but they may not have access to legal databases. Airbnb even states on their help page that their background checks may not be thorough or accurate: "Due to the way certain databases are maintained, there may be gaps in the coverage provided by public records searches, and the online databases may be only updated periodically by local governments which we do not control or direct. Results of these database checks may not reveal or include recent criminal record activity." Regardless, companies are placing themselves at a liability by relying on background providers that may not have full, accurate, licensed access to background information. In order to access licensed proprietary databases, which can include the most updated criminal records and legal information, you need to be a professional with the proper legal licensing, such as a licensed private investigator.
Even if the provider did not accurately report the arrest, the fault would still lie with Airbnb for not crosschecking and verifying the information. Companies are catching on to this by hiring licensed private investigators to performed verified background check services to protect their liability.
Did Airbnb Practice Due Diligence?
According to Airbnb's help page, in the US they check "certain databases of public state and county criminal records, as well as state and national sex offender registries for criminal convictions and sex offender registrations." They also check the OFAC list for terrorist designations. Airbnb has not commented on whether they knew about Del Olmo's previous arrest, citing the Fair Credit Reporting Act, which prohibits disclosure of background check results, however, they did confirm that Del Olmo showed no prior convictions. Airbnb reports that they run background checks on at least the user's first and last name as well as the date of birth. However, what they state on their help page brings more concern on their level of due diligence: "We do not have these identifiers [full name and date of birth] for all hosts and guests and therefore cannot guarantee that we have conducted a check on every host or guest." Airbnb is missing vital information for background checks when users apply to be hosts or guests on their website. Airbnb should have a consistent signup process that disallows incomplete information in an application.
It has not yet been confirmed whether the provider did not accurately report the arrest or if Airbnb was aware of the previous arrest and neglected to deny Del Olmo as a host. Regardless, Airbnb has a vast peer-to-peer travel hosting network with no face-to-face time with their hosts. It is imperative that they get their background check information from verified services from licensed private investigators and follow through on intelligence they receive to keep their website service safe for the public. Otherwise, Airbnb will be facing more lawsuits and put the company's future in jeopardy.
If You are Recently Widowed or Divorced and Are Online Dating, Your Match Could be a Scammer
Losing a partner or going through a divorce can be a devastating and exhausting ordeal. As time passes and the dust settles, you may be considering (or already have started) online dating. You want to try to fill the void left by your previous spouse with the connection with another partner. Online dating can be a valuable option, allowing you to test the waters from the comfort of your home or phone, but unfortunately, there are those that prey on those in your situation, especially if you are widowed.
Dating scams happen more often than you think
There has been a recent uptick in cases I've received with stories that are similar to the point of being uncanny: Client is widowed, (or divorced) and in their lonely state, try online dating. They check the "widowed' or "divorced" box on their dating profile and begin to feel out for matches. Someone contacts them, they kick it off, and things move fast. The match is usually foreign, which adds to the allure. The match is also widowed or divorced and the clients feel connected through their hardships. The match sends them songs, love poems, little "thinking of you" mementos. Everything seems to be going well, but then the match discusses devastating situations that have happened in their lives. They don't know how they are going to get by without extra financial support. They ask to borrow money from you; The big job they were boasting about before will pick up, they swear they'll pay you back. The clients feel for them: after all, they've been in tough situations themselves. The client sends off money, usually a very large sum, through a wire transfer, such as Western Union. Once everything is said and done, the match goes ghost. Stops replying to messages, phone calls, emails, Skype calls. Now they are not only left heartbroken but at a loss of a huge amount of capital. They come to us to try to find the scammer, to try to get their money back, and stop them so this doesn't happen to someone else.
Why do online dating scams happen?
To put it simply: money. Widows usually receive an inheritance and/or insurance payout from the deceased spouse. Even those who are divorced can be targets, despite many who have to pay for legal services, they can still get a big divorce settlement. Combine that with people who are in this type of situation are emotionally devastated and vulnerable, scammers have the perfect target to siphon money. These scammers specifically look for profiles that are listed as "widowed" or "divorced" and will be the ones to message you first.
Warning Signs that your match is a scammer
Doesn't answer calls, relies on text.
Calls repeatedly go to voicemail or endlessly ring. Many scammers use apps or services to redirect several numbers (or burner numbers) back to their main phone to avoid giving out their real phone number. Scammers prefer to maintain contact through text or email.
Vague or "parroted" answers.
Any answers seem generic or to a script. "Parroted" answers happen when the match asks a question, you answer, and you get an answer that would amount to "me too." While having a lot in common can be a sign of a good match, if almost every question or topic that comes up you both agree upon, they may be scamming you by manipulating you in establishing a connection. These answers may also come across as inconsistent with their profile or other social media profiles.
The topic of money.
Some boast about their big jobs to try to attract you to their wealth. If they do, all too conveniently they lose their job or some other devastating event happens where they cannot pay the bills anymore. They ask if they can "borrow" some money to cover unforeseen expenses. These expenses can include rent, medical expenses for themselves or a loved one, money lost from theft or a failing business, or travel expenses to come to see you. These payments can be requested by them in the form of a wire transfer, transfer of assets, money order, prepaid card, gift cards, or e-currency. Don't believe that by paying them once that it will stop: scammers will only get more aggressive and come up with more stories to keep the cash flowing from you. Scammers will even resort to extortion over any compromising content you may have shared with them. (Also known as revenge porn or "sextortion")
Says "I love you" or "you're my soulmate" in a very short period of time, without having met you in person. This can happen within just a few emails or message exchanges. As mentioned earlier, they prefer to move you over to maintaining contact through a chat app or email to avoid being detected by online dating websites, who have protections in place in their message boxes.
Master of flattery.
Many scammers love to use poetry and love songs and send them over to you as a way to win you over. Back to the last point of moving quickly, they will shower you with flattery very early on even when they barely know you.
Difficulty meeting in person.
If your relationship is long-distance, scammers use that to their advantage as to why they can't meet. Even if you travel to where they claim to live, they always come up with an excuse for why they can't get together with you.
Guilt trip or "ghosting."
If you decline to "lend" money or suspect they are not what they seem, the scammer can become irate and make you feel guilty for accusing them or by not giving money. This usually results in them fabricating another situation that requires money. If you stand your ground on not giving money or you do send money to them, the scammer disappears, known as "ghosting", by no longer contacting you and replying to any messages or calls.
Prevent yourself from being scammed
Overall, the best thing to practice is the old adage: If it's too good to be true, it probably is. Don't share personal or compromising photos or videos, which can be used as blackmail by scammers. Use Google Image Search to help confirm that the pictures they send or show in their profile are who they say they are and not a catfish account. (But be warned: basic Google Search and People Search services may not be enough or accurate.) Avoid giving out any personal information, (including credit card numbers, passwords, and addresses) and never give money to someone you met online. If you agree to meet in person, let a close friend or family know, and always meet in a public area.
If you are a victim of a dating scam
If you are a victim of a dating scam, you need to do the following:
1. Contact your bank as soon as possible and notify them that you are a victim of a scam.
Change any bank information that was given to the scammer and see if there is any way the money can be traced, blocked, or returned to you. Unfortunately, there is a very high probability you will not get your money back, especially if it was done through a Western Union or e-currency.
2. Do not accept any offers for help by online recovery "services."
Scammers like to double-dip: They can do a recovery scam, by claiming to be a police officer or legal professional, promising to help you recover the money and put the scammer in jail. They won't ask for money until after they "claim" to have arrested the scammer.
3. Do not accept any "repayment" directly from the scammer
It is very likely that money has been taken from other victims, which would involve you in a money-laundering scheme.
4. You can contact the police, but if the scammer is located in another state or another country, there is very little they can do.
Hire a private investigator to locate the scammer so you can hand the information to the proper authorities. (such as the FBI, who are unlikely to work with you unless you have a concrete lead on the scammer. Note that if the scammer is located internationally, unfortunately, there is not much that can be done to get your money back.)
Are You The Victim Of An Online Dating Scam?
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Why Hiring a Private Investigator to Verify Google and Social Media Background Checks is a Good Idea
Hiring can be a long and stressful process, but a necessary procedure. Many companies try to cut corners and make it as streamlined as possible, but lose vital details in the process, and set themselves up in a legal minefield.
Businesses need to use a professional background check service
As the internet has grown rapidly comes more accessible information. What once required a set of the Encyclopedia Britannica to answer inquiries, has now become cumbersome door stoppers, its original purpose replaced by Google and Wikipedia. There is an alarming amount of businesses that have deduced that solely using Google and checking social media accounts are sufficient methods in gathering background information on candidates. Only using internet searches to do a background check is like building a house with just a crowbar and a hammer. While these tools can gain some insight, they should be used as supplementary to a professional background check service such as Radius Investigations, who can verify the information you find online.
Why is checking Facebook, LinkedIn, and Google not a sufficient background check?
While some candidates may be naive and freely post with no filter, many are becoming smarter to hiring agents. 70% of employers report using social media to screen candidates and those who are looking for employment are taking notice. With the right privacy settings, users can hide questionable material from their profile. On the flip side, those who have no privacy settings enabled on an account could be knowingly posting non-controversial content.
Lacks Vital Information
It is no common that someone will be posting about their recent arrest online, (although it does happen, we personally have come across it in our investigations) or their credit and financial information. Going back to the earlier point, candidates can easily fabricate their social media pages to appear desirable to recruiters or withhold information. A professional background check goes beyond the basics and can access criminal, legal records, and financial information.
Inaccurate and Incomplete
It is important to remember that any information gathered online and on social media is not verified the information. To extend on the last point about fabrication, social media pages are not going to necessarily tell you whether the prospect would be a good employee. For example, someone who posts about their pets and hobbies doesn't tell you whether they are qualified for the position. More importantly, relying on internet searches could end up with you making a critical mistake by screening the wrong account due to similar names.
How a Professional Background Check Resolves these Issues
Professional background checks cover a wide range of facets that can be used in the hiring decision process. A professional background check can include:
- Driving records
- Court records
- Education records
- Drug test records
- Criminal records
- Military records
- Past employers
Legal Protections and Liability
Using a professional service can prevent you from unknowingly discriminating someone from hiring or firing based on information gathered from social media or internet inquiries because professional background checks provide verified information. It also protects you from violating any privacy laws, which are still vague in regards to information on the internet. Private investigators who provide professionals background checks services provide verified information, know how to identify potential legal issues, and proceed between your company and themselves to remain in compliance with the law.
Confirmation of Employment History
Getting a professional background check ensures an accurate employment history. Private investigators can not only perform background check services but have the ability to physically go to the sites or conduct interviews to confirm candidates' employment records.
Convenience and Confidence
Letting a professional service handle your background check procedures can ease a big legal and logistical responsibility. Even doing a basic internet search and social media screening can be time-consuming, and the quality of the results is not worth the investment.
Using social media and internet research can be valuable in understanding more about your candidates, but come with the caveats of legalities, being unverified information, and provide no guarantees of accuracy or insight. These methods should be used with caution and taken with a grain of salt in the overall hiring process. Social Media and Google should never be used as a replacement for a professional background check.
Need Professional Background Checks?
Get the facts on your potential hires through our expert Private Investigator from Radius Investigations!
Why does a company need to perform a background check?
The goal in any hiring process is to gain employees that you have confidence in their abilities and experience. However, things from a candidate's past can fall through the cracks that can affect employment or your company's reputation. Studies show that 3 out of 10 business failures are actually caused by employee theft, and that over half of all job applications contain lies. It is important to have a proper background check process in place to ensure you are hiring the highest quality employees.
Is searching public information or the internet a good background check?
While you should use free public records and internet research to verify candidates' information, public information may not be accurate, since public databases are not obligated to update their information on a regular basis. A background check investigation through our licensed private investigators from Radius Investigations is a more thorough check for information, including data that is not accessible to the public.
What is searched in an employment background investigation?
Our employee background check service consist of an array of different types of inquires tailored to each client’s individual needs; which includes searching criminal, financial, and legal records.
An employment background check from Radius Investigations consists of the following:
- Name Verification
- Address Verification
- Social Security Number Verification
- Driving Records
- Vehicle Registration
- Credit Records (If the employee signs a release)
- Criminal Records
- Court Records
- Workers Compensation
- Character References
- Neighbor Interviews
- Medical Records
- Property Ownership
- Education Records
- Military Records
- State Licensing Records
- Drug Test Records
- Past Employers
- Personal References
- Incarceration Records
- Sex Offender Registry
Call 1-888-698-0077 today for a free consultation with Radius Investigations on how we can conduct thorough employee background checks in NYC and Long Island for your business!
Swipe Left the Fakes: Is an Internet Search Enough to Find the Truth?
Many of us have found ourselves on an online dating website, looking for the right match. After what feels like endless swipes or the millionth question answered from match quizzes, (you swear you seen the same questions a thousand times, just worded differently.) you finally found a great profile. You send a message, heart beating fast, hoping this person responds. After what feels like an eternity, they do, you both hit it off, and schedule a date. As the butterflies begin to settle, you realize that something seems a bit off with their profile and interactions. You find their name, do a quick online search, and everything seems fine. Their social media pages are set to private, so it's hard to find more information. Yet this feeling isn't going away. Despite feeling troubled, you give the benefit of the doubt, finally meet, and become disheartened as you realize once you're face to face that they are not who they said they were online.
Unfortunately, this type of situation happens more frequently than you may think. The questions you should ask is "Could anything else have been done to sift out the fakes from the real matches?"
Online Dating: The Facts
Online dating is not going to go away, as over 38% of single adults in the US have tried online dating. With popular dating websites such as eHarmony and Match.com boasting over 17 million and 24.5 million members respectively, and 1 in 5 committed relationships that started online, finding a special someone online has become an ingrained part of our culture in courtship.
While online dating has become more accepted, (59% agree that online dating is a good way to meet someone) it fits our digital age and provides convenience, there is a dark underbelly to online dating. People are taking advantage of the autonomy of the internet, at others' expenses. You may have had that "gut feeling" of something not being right about a match, you are not alone: over half of those who use online dating sites felt that some were misrepresenting themselves online.
Some disturbing trends:
These numbers are concerning and could be enough to turn you off from online dating, which is understandable. Whether you want to continue is a personal decision. However, the fact remains that online dating is one the rise and depending on your location, meeting people online may be the most accessible way to find the right match for you.
Are common search methods enough?
As explained in our earlier story, using common search methods, such as social media and Google, can work in finding out about your match, but not only can it miss key information not available to the public, it can become exhausting when you go at it alone. More than likely you are one of the 53% who has dated more than one person at the same time, which means you are conversing with multiple matches.
Is online dating worth it?
Online dating can be rewarding, but incredibly daunting. Fortunately, there are services that can help. Private investigators are moving into the digital realm to help people get peace of mind. Radius Investigations has a team of licensed private investigators that can provide professional and comprehensive background checks on your matches, as well as social media investigations. We have access to databases and resources that are not accessible to the public and won't pop up through Google. Don't let negative experiences prevent you from finding the right match: using a professional background check service can give you the peace of mind to move forward.
Don't Fall Victim to Online Dating Scams
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As I discussed in my previous blog post, identity theft is one of the fastest-growing crimes in modern society and can represent substantial ongoing challenges for individuals who have fallen prey to it. Many cases of identity theft can start with a minor, easily overlooked changes to bank accounts and credit charges. However, if these things are left unaddressed, they can rapidly escalate and ruin lives.
While the threat is widespread, there are steps you can take to reduce your vulnerability to identity theft.
Credit Protection and Personal Protection
A common misconception that many people have is that account-backed credit protection can be enough to counteract the tactics of identity thieves. However, the truth is that while loan providers and the anti-fraud practices of credit card companies can help customers in credit protection for certain accounts and even regarding specific charges, this protection does not stop or uncover every activity that may occur as a result of identity theft.
One of the tricks used by identity thieves involves making sporadic and small charges on an existing or new account that may be established in your name. This can make it very easy to overlook initial suspicious activity so that by the time more extensive or overt fraudulent activity is detected, the situation may have escalated, and the victim’s personal information, credit score, and finances may already be significantly damaged.
Other schemes used by identity thieves and hackers include the following:
- Opening up new credit card accounts in their victims’ names, piggy-backing on the victims’ otherwise established credit, and using the new cards, while the victim is left with the bills.
- Pilfering individuals tax information, filing fraudulent tax returns and claiming false refunds in their victims’ names.
- “Free-riding” on victims’ health insurance, by stealing their insurance identification information, and receiving treatment under someone else’s coverage – often causing serious complications when the victims try to get treatment for their own health issues.
For this reason, it is always vitally important for individuals to:
- Safely dispose of any documents with personal information. While identity theft is a crime, it is also important to remember that any trash left on the curb is considered public domain, which means that anyone can claim it. The use of a personal shredder and the apartment building incinerator are wise choices for protection.
- Monitor all account activity, no matter how small. Catching the smaller unauthorized charges can lead to the prevention of your alternate identity being fully established. Any suspicious activity should be reported to the bank, as this can lead to a formal investigation.
- File a police report. Some lenders will ask that clients do this in order to verify the authenticity of the theft claims. However, victims are encouraged to file with the local precinct regardless, as this can also help to substantiate the theft claims should criminal charges against the perpetrator become a necessity.
- Hire a Private Investigator. The use of a private investigator can often help to uncover how widespread identity theft may range. This can include exposing any false accounts that have been taken out in your name, where your personal information has been distributed, and can also aid in the recovery of assets that are not protected through credit lenders.
In recent weeks, there have been news stories of high profile data breaches, in which innocent people’s personal information was made vulnerable, or deliberately accessed, by wrong-doers. Aside from the Wikileaks issues, probably the most widespread of these data breaches occurred at Yahoo. The online media company reported that in 2014, somewhere between 200 million and 500 million users had their accounts hacked, and the hackers obtained access to the users’ names, email addresses, addresses, telephone numbers, and hashed passwords. The hackers attempted to sell a database with these users’ information and claimed that this information was derived from a data breach in 2012.
An article summarizing the Yahoo data beach can be found here:
On a much more local scale, but similarly troubling, the Village of Mastic Beach, in Suffolk County, Long Island, reported that they had been the victim of a different kind of data breach. A former employee of the Village is alleged to have illegally accessed the personal data of hundreds of Mastic Beach residents, including local political figures and their extended families, for as yet unknown purposes. This employee (allegedly) obtained this information by fraudulently claiming to have law enforcement credentials in order to access proprietary databases used by law enforcement, lawyers, and private investigators.
I am very proud to announce that a digital forensics team from Radius Investigations, led by my partner Matthew Seifer, uncovered the Mastic Beach data breach and have provided evidence of the former employee’s unlawful activity to the property authorities.
The press release from the Village of Mastic Beach disclosing the data breach, and Radius Investigations’ work in uncovering the breach, can be found here:
Although vastly different in scope, these two cases reflect the sad truth that we are all vulnerable to identity theft as a result of criminal activity, whether through weak points in our email systems, our use of credit cards, or the abuse of power by individuals whom we have entrusted with our information. In fact, identity theft is one of the fastest growing crimes in modern society and can represent substantial ongoing challenges for individuals who have fallen prey to it. One of the larger concerns that people may have is the fact that many cases of identity theft can start with minor, easily overlooked changes to bank accounts and credit charges. However, if these things are left unaddressed, they can rapidly escalate and destroy lives.
In a future blog post, I will detail a number of steps that you can take to reduce your vulnerability to identity theft. In the meantime, if you believe that you have been victimized by identity thieves, or would like more information about how to protect yourself, call either local law enforcement, or feel free to contact Radius Investigations toll-free at 1-888-698-0077, or our office number, 631-351-6473, or email us at info@RadiusInvestigations.com.
We are pleased to announce that the founding partners of Radius Investigations, Matthew Seifer and Sinai Megibow, will be speaking at the next meeting of the Attorneys/Accountants Committee of the Nassau County Bar Association. Our topic will be: How to Protect Your Business and Your Clients from Computer Fraud, and How to Recover Forensic Data from Computers and Devices. The presentation will take place on Wednesday, November 2, 2016 at 12:30 p.m. in the South Dining Room at the Nassau County Bar Association in Mineola. We look forward to an interesting discussion!
For more information, please contact Radius Investigations at 1-888-698-0077, or email us at m.seifer@RadiusInvestigations.com
SEPTEMBER 27, 2016
More than 21 months ago, the Village Board and Village Attorney received a report alleging that a Village employee had utilized two background‑search firms (Transunion/TLO and Lexis Nexis) with one of the firms’ extensive, law-enforcement databases accessed under the pretense of the employee being the Village’s “Chief of Police”. In the latter case, this enabled the employee to undertake the most invasive searches of individuals’ backgrounds. The searches that were made were not for a legitimate governmental purpose or work-related in any way. Additionally, families, friends and associates of certain individuals were also searched without any lawful or legitimate purpose, including certain Village-Board candidates, sitting Village Trustees and Village employees.
At that time, the Village’s investigation of the searches was taken over by the then-Village Attorney. Approximately two weeks later, the employee in question was separated from service.
Not receiving any further information concerning the extent of these searches and being concerned about the Village’s legal obligations to address these matters, in April 2015, when Mayor Maura P. Spery’s administration took over, the Board engaged the services of two forensic‑investigation companies, one of which focused on computer and IT‑related matters and the other on finance-related matters. The two finance-related reports were completed by Cramer CPA, P.C. in December 2015 and January 2016, and the results of each have been forwarded to appropriate external agencies, including the Suffolk County District Attorney’s Office and the New York State Comptroller’s Office. The determinations in these reports included a clear pattern of employees’ theft of services and other financial improprieties.
Due to the complexities of the IT-related information that was uncovered during the nearly 18-month inquiry, the IT-forensic report that was conducted by Radius Investigations was recently finalized. This latest report now enables the Village Board, with the advice and guidance of its attorney, to comply with both federal and state laws requiring the Village to notify in writing all individuals who may have been impacted by these illegal and impermissible searches.
Some of the targets of these illegal searches included elected Village officials, Village employees and Village residents. The former employee who conducted these searches did so using computers connected to both the Village of Mastic Beach and the Village of Northport. Consequently, the Village yesterday mailed out written notices to nearly 500 individuals in accord with the Village’s statutory obligations, including among others New York State Technology Law, Section 208 and New York State General Business Law, Section 899-aa.
Accordingly, the Mastic Beach Village Board, through its attorney, has turned over the IT-forensic investigation report and related information to various state agencies, including the Suffolk County District Attorney’s Office and the New York State Attorney General’s Office.
Mayor Maura P. Spery stated, “There have been loud cries over the past 18 months about the nature of the Village’s IT investigation and whether it was even needed. It has been labeled by detractors as merely a ‘witch hunt’. Certainly, the results of the reports the Village has received prove otherwise and make unequivocally clear the serious transgressions that occurred, including the digital violation of individual privacy and confidentiality.” Mayor Spery concluded, “The residents of Mastic Beach Village need to know my administration continues to take very seriously our obligations to provide transparency and accountability to our constituents.”
# # # # #
SEPTEMBER 27, 2016
With the release of the Village’s IT-forensic investigation findings, and after more than 21 months of public vitriol leveled against former Deputy Mayor Bruce Summa and me, we have been fully vindicated.
During the past 21 months, Mr. Summa and I have been publicly accused of seeking to destroy families, committing heinous crimes and abusing our governmental power. Nothing could be further from the truth.
Make no mistake, this is an extremely dark day in the Village of Mastic Beach. Mine and Mr. Summa’s commitment to transparency and accountability has come at a tremendous personal cost not just to us but to our families and friends, many of whom were the subjects of these illegal and invasive searches. Nonetheless, we undertook our elected positions with an unyielding commitment that no individual should ever be afraid of her/his government or fear retribution for expressing one’s fundamental Constitutional right of free expression, even if that expression opposes the current political majority’s viewpoint. I continue to have faith in our system of government and now look to our law-enforcement agencies to hold accountable those who shredded the Constitutional rights of the hundreds and hundreds of innocent victims whose backgrounds were illegally searched and the digital invasion they suffered. Justice demands nothing less.
To combat fraud effectively, you first must understand what it is and how it occurs. For our purposes, the definition of fraud from Wikipedia is sufficient:
In law, fraud is deliberate deception to secure unfair or unlawful gain. Fraud is both a civil wrong (i.e., a fraud victim may sue the fraud perpetrator to avoid the fraud and/or recover monetary compensation) and a criminal wrong (i.e., a fraud perpetrator may be prosecuted and imprisoned by governmental authorities).
In other words, fraud requires the perpetrator to use trickery, deceit, or lies to obtain some form of benefit – often money directly, but it could be other benefits, such as health insurance, a job, merchandise, better stock value for the company, etc.
Now, there are as many different types of fraud as there are things to lie about. For now, I will focus on the types of fraud and related forms of theft that specifically target the business and the workplace. I’ll begin with the most common types of employee fraud: Asset misappropriation, embezzlement, and employee theft.
Asset Misappropriation, Embezzlement, and Employee Theft
Generally, these types of fraud/theft affect either the company’s cash or its inventory or physical assets. Frauds affecting the company’s cash or revenues include the following:
- Larceny: stealing from cash on-hand or deposits
- From Sales, by understating the value of goods sold, or not recording the sales of goods, and pocketing the cash
- From Receivables, through write-off schemes, “lapping” schemes (pocketing payment from a customer, then using the next customer’s payment to cover the shortfall), etc.
- From refunds
- Fraudulent Disbursements:
- Billing schemes – charging the company for non-existent work performed by shell companies, inflating the bills from vendors and pocketing the difference, etc.
- Payroll Schemes – “ghost” employees (pocketing paychecks for employees that don’t really exist), falsified commission schemes, fraudulent workers’ compensation claims, falsifying or inflating wages owed, falsified vacation time
- Expense reimbursement schemes – mischaracterized/overstated expenses, fictitious expenses, multiple reimbursements, billing the company for personal and not business expenses
- Check Tampering
- Forged maker
- Forged Endorsements
- Altered Payee
- Authorized maker
- Concealed checks
- Register Disbursements
- False voids
- False refunds
Frauds affecting the company’s inventory include the following:
- Misuse – using the company’s equipment (vehicles, etc.) for unauthorized personal use.
- Larceny – Stealing the company’s inventory or equipment, through falsified sales and shipping documents, purchasing and receiving documents, or simply stealing.
In a future blog post, I’ll summarize fraud in the form of falsified financial and business statements and corruption.
For more information on fraud schemes and how you can protect yourself, contact Radius Investigations at 1-888-698-0077, or info@RadiusInvestigations.com.