For ten years, my
favorite job as Compliance Officer of an Investment Bank was spotting
liars. This meant figuring out which finance professionals NOT to
hire because they embellished their qualifications, which potential
clients NOT to accept because they had obfuscated weaknesses in their companies, and
which alleged investors NOT to believe because they would never pony
up a dime. On the theory of “garbage in, garbage out,” I figured
that anyone who lied to me up front about something I easily
discovered was likely to lie later on about something important I
might not detect. With 7 billion people on the planet, I endeavored to avoid those mendacious people and work with honest ones.
What appalls me is the
frequency with which I have encountered grown-ups who lie, easily,
smoothly, and frequently to get something they want, based on merits
they lack. Obviously, their blarney must work on some of the
people some of the time. I'm also dismayed by the number of
companies and individuals who don't do background checks before they
hire or recommend people, or who part with their money or let someone
into their homes or lives without asking a few logical questions
first. So shame on both parties!
The following article
shares easy, cheap or free research that anyone can do in less than
an hour and examples of falsehoods I have uncovered in the areas of education, business experience, lawsuits, and crimes. Protect
yourself with a healthy dose of skepticism, a few minutes on the Internet, and
some judicious questions.
Start with the
person's resume. If your interaction is not professional, and
doesn't warrant asking for one (such as your daughter's new
boyfriend), look up the person on Linked In or similar self-posting
websites. Scrutinize the document. Do you recognize the names of
the schools and companies? Do the job descriptions and interests
correspond to what you know of the person? Some lies are obvious, while others require more digging, by cross referencing this information with corroboration or contradictions available elsewhere. Examples below.
Education:
Examples of Findings:
One CEO of an OTC
shell company lied in his SEC filings about his academic credentials.
He claimed a PhD from a university that does not even exist!
Instead, he actually has an AA degree from a community college in
Washington State. I told the SEC what I found.
A potential employee
claimed a MBA. The school registrar revealed that he attended adult
education classes, but never enrolled in a degree program.
One man claimed to be a bishop in a conservative branch of the
Anglican Church(for which he created a Wikipedia page) and to have been ordained after attending a
particular seminary. A bit of research revealed that he made up this alleged denomination AND the school! Neither is a
legitimate, recognized institution.
A woman listed no
college degree but put “post-grad” on Linked In, citing no
school at all. She also indicated membership in The Yale Club and
Harvard Club. These are rather obvious ploys to sound impressive.
Two people claimed to
be members of a national honor society that sounds real but is actually a “pay to
post” website.
How can you
validate or discredit educational claims?
If you are unfamiliar
with the name of the school,search for its website or Google
“accredited universities.” If the only reference you find is in
connection with this person's posting, such an institution does not really exist. Some other schools exist only as “degree mills” - website
companies from which a person can buy a fake diploma. In the case of legitimate, small colleges and universities, you can call the registrar, who may
answer your questions about someone's enrollment. In most cases, though, you need to pay a few
dollars (usually less than $10) to the National Student Clearinghouse website: www.nationalstudentclearinghouse.org.
Many employers ask
applicants to sign an authorization for a background check, and on it to
include relevant details such as address and social security number.
Such a standard form is an easy to way to separate the wheat from the
chaff early, as some people may fade away to evade such scrutiny. If
your reason for checking somebody out doesn't provide an opportunity
to solicit such authorization, you might ask a friend who is an
alumnus of that school to look up the person's name in their alumni
database. Alternatively, you can review the school's website to see
if, for example, it offers the degree the person claims or to glean
some details you might work
into a subsequent conversation if you doubt the person's attendance
there.
Prior employment:
One man claimed to
have investment banking transaction experience. A short call to the
employee check hotline revealed that he had one year's experience in
a back office, administrative support function.
One woman's patchy
resume indicated consulting services to the CEOs and boards of
international banks. Her prior experience? A BA from a state
university, followed by 3 years selling household products for a pyramid marketing company and 5 years as a telecom customer service representative (which her Linked In
profile neglected to mention, but which are evident from other Internet sites).
One woman described
herself as a real estate investment expert. The real estate broker
confirmed that she had worked with them for several months as a
brand new realtor but, as yet, had no clients.
Calls to two prior
employers of a job applicant were the most interesting I've ever
had. One man actually yelled that my applicant was crazy. His
prior employer indicated that he was a severe alcoholic with rage
management issues who sabotaged several client relationships. He
was with each company for only a few months.
Several alleged
investors were unable to give me the names of any companies in which they had
previously invested. Another investment firm was cited in a public company's SEC
filings as having failed to fulfill their contracted investment (the firm needed to explain a
revision to their financial outlook).
How can you find
out about prior employment?
Review the names of
past companies, dates, and duties on the resume. Be sure to look for other
resumes on other sites, by googling the person's name and any of
those companies. Often, people update one document but forget that the Internet stores prior versions, too, and that other companies and websites may mention them. Red flags of doubt include:
frequent job changes,
with short stints at each, an illogical career trajectory, impressive
titles or duties surprisingly early with little prior experience,
long gaps, multiple resumes that don't match on dates, duties,
titles, or firms, companies you can't find through Internet searches, claims of great success yet major swings in industries, cities, or employers. Ask for references and be sure to call them.
Ask if the person
worked there, during the years and with the duties claimed and ask
“is there anything else I should know?” Some large companies
have “employee check hotlines” for such inquiries. If the
person claims to have been self employed (as a reason why you can't
find the firm) look it up in the corporations list of the state's
secretary of state or commerce website. Although each website
differs, many allow you to research whether a company name is
“available” or associated with an existing or even past company,
and many list the officers and directors, along with the
address. For some types of businesses, the Better Business Bureau (www.bbb.org) is
a good source of information, not about individual employees but
about the reputation of the company. I like the website, www.ripoffreport.com on which unhappy clients criticize companies. For public companies, you can
review SEC documents and EDGAR filings at www.sec.gov.
Most professions that require licensing, such as accounting, law,
medicine have websites where you can search for names, specialties,
and whether the person remains in good standing with the profession.
I like www.martindale.com
for searching attorneys and www.finra.org
(look for Broker Check) for investment bankers. If you don't find
the name of the person, he or she is not licensed. If you do not find the name of a person who purported to be a licensed doctor, attorney, investment banker, etc, call
that organization. Ask why you don't find the person. They might be interested to learn that someone is masquerading as a member of that
profession. In fact, some groups have posted "wall of shame" websites naming names of imposters. There is one for people who pretend to have been Navy Seals.
Crimes and Lawsuits:
A man proclaimed
himself an expert in financing small companies, but his credibility was marred by revelations that he had filed
personal and corporate bankruptcies in two different states after shareholders accused him of
fraud. Even more damaging were the words of the bankruptcy judge, who handed down the most sweeping
denunciation of his business practices that I have ever read outside
a criminal indictment.
A man sought
investors in his new venture, based on claims of great experience
in the past. He neglected to mention, understandably, that his past
included SEC sanctions for fraudulent business practices so
egregious that he is in a case study at a law school!
A man was imprisoned
in New Jersey for fraud, and moved to Texas to look for new investors
in the same type of business. I reported him to the white collar
crime division of the local police but they said they couldn't do
anything until he actually committed a crime in their jurisdiction.
A man was barred from licensing in the securities industry and from selling any security in the state of
CA based on a law suit by several investors. He re-registered the
exact same business in MD and got some attorney who obviously did no
due diligence to draft a Private Placement Memorandum so he could
solicit new investors! I called the state's attorney general and
the lawyer.
One man is operating
businesses, soliciting investment, under two different last names. Somebody actually set up
a website to expose him as a fraud.
One woman is listed
on the internet under several spellings of her name, several
different email and physical addresses, and inconsistent resumes,
titles, and job histories.
One man sought investment in a pet food company. However, he is under indictment in CA for 48 counts of fraud and cruelty to animals when he ran a pet shop.
How can you discover a person's crimes and lawsuits?
Google the person's name with a variety of search terms for your worst fears, such aslawsuit, bankrupt, and various crimes. Common names, like “John Doe” may be very difficult to search, so narrow the field with details like the city, state, job title, school: "John Doe" + NY + invest + fraud. Some states, such as TX, AK, and FL make it very easy to look up lawsuits, bankruptcies, and IRS liens. Others, like CA and NY have tighter privacy laws. When you search, don't look just at the first page of results. Some clever people bury their past misdeeds with a pile of free press releases, self-published articles, and other more recent information.
* * * * *
Over the years, I have
uncovered more lies among professionals that I ever expected. Now I
am pretty jaded, with a fine tuned “nose” for people who “don't
pass the sniff test.” I'm not talking about women who lie about
their age or men who lie about the size of the fish that got away.
I'm warning you that there are plenty of charming people who have
lied and will lie to get into your company, your home, or your bed.
Protect yourself. Check them out.
***
If you enjoy or learn from this article, please link it to or post it on you favorite social medial sites. Thanks, Laura Emerson