Internal Bank Fraud
Marketing Sherpa gave this quote in a recent article regarding selling services to Commercial and Savings institutions:
We've all heard about banks who've lost critical customer data by shipping unencrypted files via UPS or who have had laptops stuffed with customer data stolen or gone missing. Those are the big stories that make the news. What doesn't make the news is that 50 - 70% of fraud happens on the inside, according to Jacob Jegher, a senior analyst with IT firm Celent LLC, in an interview with American Banker.
For major banks with tens of thousands (or more) employees, protecting against internal fraud is an almost incomprehensible undertaking. Employees can easily bring in storage devices such as MP3 players and PDAs to steal data or can download Instant Messaging programs, which are difficult for IT to monitor, let alone regulate for compliance reasons.
Inside jobs account for 50 to 70% of bank fraud? It's a frightening statistic. While it's important to note that today's hand held storage devices give employees an easy and anonymous method of stealing data, it doesn't account for their will to commit fraud. What makes them do it? Is the temptation overpowering? Are they disgruntled employees, upset by draconion corporate policies and uncompetitive compensation & benefits practices? Are they in debt themselves; mortgaged to death and desperate for some cash.
Financial advisors warn that past performance isn't a guarantee for future actions, but any saavy investor takes note of the past before investing. Likewise, banking institutions need to start taking a better look at their job applicant backgrounds. If their staff is commiting 50 to 70% of the fraud, then the institution will pay the price in reputation and lost revenue.
Banking institutions should be implementing a clear and consistent background check program for all prospective job candidates as well as periodic updates for current employees. Furthermore, banks should institute more comprehensive and up to date background examinations of employees who promote from within to positions of higher authority and fidicuary responsibility.
Protecting against internal fraud means periodically checking the credit reports of current employees. Employers may think their staff members are financially secure because they are earning a paycheck, but in reality, most people live paycheck to paycheck, especially now that mortgages payments account for approximately 50% of household expenses. Now imagine a family emergency, a poor investment, or even a gambling or drug addiction to create the conditions needed for desperation. If you have an employee like this, wouldn't you like to know if they have a previous criminal record?
When implementing a pre-employment screening policy, it is important to secure a signed authorization from the applicant to periodically review records in the event they are hired. A periodic screening policy shows clients and investors that you are making a commitment to protecting their assets.
To read more about setting up or improving your background check program, please visit Corra Group's website Corra's customized background check programs will meet your needs, no matter the size of your firm.
Corra can be reached at (310) 966-1556.
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Fred's Storied Career
A five-time felon has spent his life elaborately lying his way into jobs at churches, nonprofits and UCLA. Now he's ready to go straight. Maybe.
By Tonya Alanez, Times Staff Writer
Each morning as he backed down the driveway of his Glassell Park home, Federiqkoe DiBritto III couldn't be sure if that day was going to be his last on the job.
For months — much longer than he had any right to expect — his luck held.
Then on April 21, DiBritto, a fundraiser for the UCLA medical school, was summoned to his supervisor's office, handcuffed and taken to jail.
DiBritto, who had been hired for the $100,000-a-year UCLA job with what seemed to be excellent credentials, was really Fred Brito, a con man and five-time felon. UCLA detectives arrested Brito after a tip from the Los Angeles Police Department.
Brito, 49, has spent his adult life using aliases and phony credentials to pull off one elaborate deception after another. He has lied his way into jobs as a Catholic priest, a youth counselor for a foster care agency and executive director of the National Kidney Foundation of Southern California, among many others. He once convinced a judge he was a psychiatrist in order to testify in a friend's criminal trial.
Sometimes his poses have landed him in jail. Other times, he's been allowed to leave jobs quietly. His latest unmasking put him behind bars for a couple of weeks while authorities decided what to do.
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Officials seek tougher background checks
The Charlevoix-Emmet Intermediate School District is calling on the Michigan State Police to revise its name-based background check system, but the police say there are no flaws in it.
"If the state's system would utilize driver's license or Social Security numbers as a primary identifier, we would have significantly more confidence in it than we do," said Richard Diebold, deputy superintendent for Charlevoix-Emmet Intermediate School District.
This mistrust of the system comes after an official with the intermediate school district's AmeriCorps organization, Arthur Kirk, was found to have a lengthy criminal record. When Kirk was first brought into the program, the Charlevoix-Emmet Intermediate School District performed a criminal background check on him using the state police's online system.
The district did not have to do a fingerprint check because Kirk's position was not required to have one under state law. State law requires all certified employees, such as teachers, and administrators to have a fingerprint-based background check in schools.
The check on Kirk did not indicate he had a criminal history. However, Kirk used to use the last name Kirkeby, which was the name he was arrested and jailed under in the 1980s. The state system did not take this name into account, therefore it showed Kirk had a clean record.
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School contractors to undergo checks
Districts scramble to fingerprint, do backgrounds on vendors
By JENNY LEE ALLEN
The state wants to make sure everyone who works in Florida schools, even those who just stop by to make repairs or deliveries, are not dangerous sex criminals.
A new law hustled through the Legislature in May requires contractors who work in schools while students are present to pass criminal background checks.
The requirement is part of the Jessica Lunsford Act, named for the 9-year-old Citrus County girl who was kidnapped, raped and murdered in February.
The law could affect everyone from construction workers to referees to the people who deliver frozen pizzas to school cafeterias. The act also establishes a mandatory sentence of 25 years to life behind bars for people convicted of certain sex crimes against children 11 and younger, with lifetime tracking by the Global Positioning System after they are freed.
The man charged in Lunsford's murder, John Couey, was a convicted sex offender who did construction work at the girl's elementary school. Couey lived near Lunsford; the two did not meet at school.
School districts across Florida have been scrambling to interpret the small part of the 82-page act that affects them starting Sept. 1. There are few guidelines for implementation, so districts face a host of questions.Who undergoes background checks? Who pays? What about vendors who work in multiple districts? And how can schools tell who has been checked out and who hasn't?
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Youth Orgs Stepping Up Background Checks
By Steve Jordahl
With increasing reports of inappropriate activity between adults and children, youth organizations are looking for better ways of checking the background of potential employees and volunteers. Scout master Russ Dewey is already subject to a background check because of his position with the Boy Scouts. The Scouts are considering a system that would monitor his record and notify the organization should he commit a crime in the future. Is he OK with that?
“Absolutely, I think they have to do everything that is within their power and given fiscal constraints that they can do to protect the boys.”
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Felon's Hiring raises queries
School custodian booked with battery
By MARK F. BONNER
Advocate staff writer East Baton Rouge Parish sheriff's deputies arrested a felon working as a custodian at Central High School on Wednesday on simple battery and resisting an officer after a girl who attends the school said the custodian grabbed her buttocks, officials said.
The girl was on campus Wednesday to help register younger students into the school's ROTC program, said Fred Raiford, a spokesman for the Sheriff's Office.
Regular classes do not begin until Aug. 11.
The custodian, Andrea Reed, 39, 533 East St., Denham Springs, was issued a misdemeanor summons for each charge, then released from custody, Raiford said.
Called to the school about 2 p.m. Wednesday, a deputy was told by the high school senior that Reed made inappropriate comments to her and, when she turned to walk away, Reed grabbed her buttocks, a Sheriff's Office news release says.
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Interviewer's 'Bare Facts' Technique Sees Him On Probation
A WOMAN applying for a job at a company in Glasgow went into near shock when the interviewer entered the room naked except for a clipboard. Saeed Akbar requested the woman take off her clothes also and the interview be conducted in the nude. But she refused. Akbar then put his clothes back on and attempted to carry on the job interview as if nothing had happened, but the 25 year-old woman fled.
Akbar told the Sheriff's Court in Glasgow he wanted a bit of excitement and the nudity was a consensual role-playing part of his interviewing technique.
But the 35 yearold man from Fife, who lost his £25,000 manager's job as a result of the incident, was put on probation for three years and added to the sex offender's register.
Make sure your empoyee background checks include a registered sex offender search
State gaming board picks 3 firms to do background checks
Friday, August 05, 2005
By Tom Barnes, Post-Gazette Harrisburg Bureau
HARRISBURG -- To speed the process of licensing casino operators and slot machine manufacturers, state regulators will hire up to three outside financial consulting firms, including one based in Pittsburgh.
The seven-member Gaming Control Board authorized Chairman Thomas "Tad'' Decker yesterday to contact Corporate Investigations Inc. of Pittsburgh and two firms from northern Virginia.
They could be hired, at least for a few months, to complete financial background investigations of gaming operators, slots makers and suppliers, and non-gaming firms like food vendors, housekeeping and security firms.
The Virginia companies are Manuel, Daniels, Burke International and Omnisec International, a minority-owned firm.
The financial background checks will be under the direction of David Kwait, director of the Bureau of Investigations and Enforcement for the gaming board.
He said the board will eventually hire about 50 accountants and other financial experts to scrutinize audits, Internal Revenue Service reports and Securities and Exchange Commission filings of the casino operators and other gaming-related companies that want to be licensed for business in Pennsylvania.
To wait for a full staff to be hired for the financial background checks could take six months or more, Kwait said, which will delay the process of licensing slots makers and casinos. Hiring the outside companies will speed the licensing process.
The gaming board is hoping by spring to license seven racetrack/casinos, including The Meadows, with licenses being issued later in 2006 to five free-standing casinos and two resort hotel casinos.
In a related matter, the gaming board said yesterday it had received a formal application from the first slots manufacturer that wants to be licensed for business in Pennsylvania -- International Game Technology, a major maker of slot machines.
Applications from other slots manufacturers, as well as from slots suppliers, which will act as middlemen between the manufacturers and casinos, are expected soon.
In other business, the board approved draft regulations for licensing the free-standing and resort hotel casinos. They can be found at www.pgcb.state.pa.us. Comments from the public will be accepted, only in writing, until Sept. 6.
The board also said it will conduct "diversity forums" for minority- and women-owned businesses, to help them learn how to do business with casinos. One will be at Temple University in Philadelphia on Sept. 29 and one at Duquesne University in Pittsburgh on Oct. 27.
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Some blame city manager for hiring of sex offender
BY TRENTON DANIEL
Opa-locka's hiring of a registered sex offender sparked an outcry in recent weeks among local residents and former city officials who blame City Manager Jannie Beverly for failing to conduct background checks on new employees.
The employee, Godfrey Alexander, 46, pleaded guilty in 2000 to sexual activity with a child by a family member, public records show. His adjudication was withheld, erasing the conviction, and he was placed on probation, which ended in April, records show.
Alexander had sexually abused a 15-year-old for almost three years, according to his arrest affidavit. He also is listed for the same offense on a website of registered sex offenders maintained by the Florida Department of Law Enforcement.
Alexander disclosed the information on his city employment application, revealing he was on probation for the felony, according to personnel records reviewed by The Herald.
The city opened an investigation into Alexander's hiring last week and placed him on administrative leave.
Alexander declined comment. ''I've been advised by the city not to make any statements to the media,'' he said.
Beverly has repeatedly declined to answer questions, saying only that the city is investigating the matter.
Ian Sachs, a city spokesman, said background checks are part of the screening process for new hires, but that details related to Alexander's background had not been forwarded to the city manager's office prior to his interview.
''Everybody that is hired from the city of Opa-locka goes through a background check and is asked to disclose any criminal background information before an interview is granted,'' Sachs said. ``In this particular case, obviously, there was a breakdown in the system.''
Alexander's record came to light last week when the head of a local homeowners group and former city commissioner, Steven Barrett, said he found Alexander listed on the FDLE Web site of registered sex offenders. He then distributed the FDLE fliers around town.
''[The city manager] shouldn't hire a sex offender in our city,'' Barrett said.
Alexander started work as Opa-locka's information and technology manager in January, bringing almost 20 years of experience as a self-employed computer technician, his personnel file shows.
Prior to coming to Opa-locka, Alexander worked 18 months as a systems administrator for the Fort Lauderdale-based yacht builder, the Ferretti Group USA, before he was laid off.
On his application, Alexander wrote he learned of the job through Vice Mayor Terence Pinder. ''Terence Pinder brought the man to the city,'' homeowner and activist Alvin Burke said. ``Jannie Beverly is being told to hire these people by the commission, and no background check is being done. You're going to have incidents like this come out of the closet later.''
Pinder denied Burke's accusation, saying he publicly announced the job vacancy at a meeting with the Miami-Dade Transit Authority.
Patricia Ellis, 51, a former city attorney, was so angry with Alexander's hiring she demanded to meet with the city manager at City Hall last Friday, prompting officials to call police. She was immediately arrested for disorderly conduct and trespassing, and was released the same day after posting a $1,000 bond.
''Who else has she hired without a background check?'' Ellis said before police handcuffed her. ``I have every reason to be upset, because I pay taxes. She works for us.''
The revelation about Alexander comes two months after the commission, like so many other South Florida cities, passed an ordinance restricting where sex offenders could reside. Alexander does not live in the city.
Mayor Joseph Kelley, who sponsored the sex offender law, said he was disappointed with city officials for not being aware of Alexander's past.
''To have someone in the city like that, I'm obviously disturbed by it,'' he said.
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