Defending The Defender
- Our agency was employed by an attorney, that represented a security guard company in a negligence lawsuit. The facts of the case involved a security company that had the contract at a college to provide 24-hour on-site armed security. During registration, a security guard was sitting in a room assisting with taking money as the students paid for their classes. Two men with ski masks entered the building and fired several shots from their firearms. The security guard was struck in the head and killed instantly. Several students were wounded, but recovered from their injuries. As the perpetrators left the building, two additional armed security guards came face-to-face with the perpetrators who were at different ends of the hallway. The security guards were surprised to find guns pointing at them and taking this, along with the safety of other students into account, elected not to pull their weapons. The two perpetrators exited the building, entered a nearby car and fled the scene. The security company was subsequently sued by students who were present at the time, alleging that the security guards did not act reasonable in this situation. Although the security company was a solely owned company, they petitioned the college to have them listed as employees of the college. This would have enabled the security guard company to be protected due to a government entity having limited liability. The college refused and the lawyers for the security company then counter-sued the college to include them as a defendant in the case. Obviously, from an investigative stand-point, this limited access to college records and personnel.
- In cases such as these, there are several issues that must be over-come for a successful defense to be mounted. These include: (1) foreseeability (2) crime rate (3) proper licensing (4) proper training (5) adherence to the written contract (6) reasonable actions of the security personnel (7) physical access and limitations and (8) equipment. Although other issues may evolve during the investigation, these are some of the fundamental building blocks in these types of cases.
- Foreseeability: Foreseeability is based on available information from law enforcement agencies, crime statistics, experience, and news sources. In an article entitled, “No Room for Liability,” published in the June 1997 edition of Security Management, the article deals primarily with hotels and the issue of foreseeability. However, the article has implications in this incident. The article indicates that a hotel in Atlanta was sued after an assault. Initially, the court ruled in favor of the hotel but the appeals court reversed the decision finding that the trial court had imposed too narrow a definition of foreseeability. Three nearby hotels had suffered more than 400 crimes in their parking lots in the same period. The ruling indicated that the high crime rate in and around the hotel should have been enough to warrant extra security. The article continues by stating that security cases hinge on four major elements:
- whether the owner owed a duty to provide a safe environment to the injured party
- whether the owner breached the duty to provide a safe environment
- whether the breach constituted the “proximate cause” of the injury
- whether the plaintiff suffered actual injury or damage.
- The duty to provide a safe environment is pretty basic. In the incident in question, the plaintiffs had reasonable expectation that they would be safe from such an assault while on the campus. Whether the security company or college breached the duty is more difficult. In Chapman v ESJ Towers (U.S. District Court, Puerto Rico, 1992), the appeals court ruled in favor of the plaintiffs stating the defendant should have had “reasonable foreseeability.” The court reasoned that among other things, that only one security guard was on duty, working a 12 hour shift without a break and watching 10-15 CCTV monitors simultaneously. The court also found that cars could get out of the property without going through an access control system. In the case of this incident, there were a reasonable amount of security officers on duty at the time of the incident. However, the surveillance cameras were apparently not functioning properly and no one had been assigned to monitor the cameras. Additionally, the parking lot area did not have an access control system. The article points out that “the property owner’s breach of duty must be the proximate cause of the victim’s damages. Inadequate security alone is not enough to warrant a ruling in favor of the victim..”
- The article continues by stating that the case laid out other relevant elements pertaining to foreseeability including:
- compliance with industry standards in protecting its premises
- the presence of suspicious people around the premises
- peculiar security problems of the facility, including the design of the facility
- In this incident, contact with other colleges and universities revealed that the security company appeared to operated within industry standards. Most of the colleges and universities contacted revealed that they do not handle registration day any different than any other day as far as security is concerned. In addition, most of their officers are unarmed.
- Crime Rate: The crime rate and crime history in the area of the incident played a role in determining whether the college and security company should have foreseen the probability of an incident such as this. In this situation, the security company did not have access to their reports as they were filed at the college and were not readily available. Therefore, interviews had to be conducted to determine the general recollection of the crime rate.
- Next, we conducted a neighborhood canvass to find out about crimes and the perception of crime in the area near the college. Outside of a few burglaries and auto thefts, the area appeared to be free of crime, especially violent crime. We then obtained a break down of police calls within a two mile radius of the college. There were only 17 assaults, 3 weapon related calls, 7 robberies and 130 suspicious person calls. We also checked with the local media and the reporters covering the police beat who indicated that they believed the area around the college to be relatively safe. A check of the FBI statistics was then performed and it was determined that the specific city and those around it had experienced an average decrease in crime of 7 %%. Compared to cities throughout the U.S. with similar populations, the crime rate was even lower.
- To take this a step farther, our investigators contacted other colleges and universities in the state to determine if they had experienced any similar incidents and their crime rate. None of these had reported any incidents where there was a victim of a robbery and/or physical assault with a weapon.
- A review of current written material related to the topic of foreseeability was conducted. In a recent court proceeding, Timberwalk Management -v- Cain, 972 S.W. 2d 749 (Tex. 1998), the court stated: “Crime may be visited upon virtually anyone at any time or place but criminal conduct of a specific nature at a particular location is never foreseeable merely because crime is increasingly random and violent and may possibly occur almost anywhere...” In the incident in question, the incident was “specific in nature” as it was obviously a predetermined act of assault and robbery. In addition, the act was “specific in location” and could not have been a random act that could have been foreseeable based on related crime in the approximate area. In this same case, the court continued by stating: “A duty exists only when the risk of criminal conduct is so great that it is both unreasonable and foreseeable. Whether such risk was foreseeable must not be determined in hindsight but rather in light of what the premises owner knew or should have known before the criminal act occurred.” In the incident at the college, “the risk of criminal conduct being both unreasonable and foreseeable” did not appear to exist. Further, there was not any information or other indicators that would have prompted the security company to foresee an event such as this.
- Proper Licensing: In this case, a check with the State Board revealed the security company was properly licensed and insured. In addition, the security officers were properly licensed at the time of the incident.
- Proper Training: At the time of the incident, the security officers in question had completed the required training set forth by the State Board. In addition, each were also properly trained and licensed to carry a weapon on duty.
- Adherence to Contract: A review of the contract between the security company and the college revealed that the contract was weak and little was specified about the actual duties and responsibilities of the security officers. The security company was found to not only have complied with the contract, but exceeded it when appropriate. According to the contract, the security company was only required to have 2 officers on duty for registration. The security company, however, elected to have 3 present.
- Reasonable Actions of the Security Officers: According to the author of “Trial by Fire,” published in the Security Management May 1998 edition, San Diego State University had a student who shot and killed three instructors on August 15, 1996. The University’s security personnel approached the shooter and were able to take him into custody. According to the author, “legally, they could have done so, (shot the student), but in the university’s view, the additional bloodshed was not necessary, because the officers were in full control of the situation and would have been able to react to any threatening movement. The officers responded appropriately, displaying judgment and sensitivity while maintaining proper officer safety techniques.... Had the officers been unarmed or poorly trained or supervised, the events following the shooting could have escalated an already tragic incident.” Accordingly, as noted in this article and “Keeping Crisis Cool,” the manner in which security officers react to a potential threat will have a direct bearing on how the situation escalates. In the incident in question, the security officers who were not wounded reacted in an appropriate manner by not drawing their weapons. In the interior of a building composed of brick and concrete, any bullets missing their mark would have richoceted and may have hit innocent bystanders. Additionally, the security officers reacted properly by not attempting to cut-off the escape route once the robbers attempted to flee.
- Physical access and limitations: According to the authors of the textbook Introduction to Security, building design should be considered as a part of security. The authors state, “The cause of security can be furthered simply by making it more difficult (or to be more accurate-less easy) for criminals to get into the premises being protected. And these premises should then be further protected from criminal attack by denying ready access to interior spaces in the event that exterior barriers are surmounted by a determined intruder.” The authors continue by stating, “Yet few such buildings are ever designed with any thought given to the steps that must eventually be taken to protect them from criminal assault. A building must be many things in order for it to satisfy its occupant. It must be functional and efficient; it must achieve certain aesthetic standards; it must be properly located and accessible to the markets served by the occupant; and it must provide security from interference, interruption, and attack.”
- In the incident in question, the perpetrators were able to access a parking lot next to the registration building as there was no type of controlled access for the parking lots. The perpetrators parked within 20 feet of the door to the building where the cash was being held. Once out of their vehicle, there were several small trees that prevented anyone from observing the door. In addition, the door was set back in a recessed area. The building where the registration was being conducted did not have any windows. A combination of these factors made access into and out of the property virtually undetectable.
- Equipment: According to the contract, the college was suppose to supply all equipment for the security guard company to use at the college. This included CCTV cameras with a monitoring room. However, the contract did not provide for a security officer to monitor the cameras. Additionally, many of the cameras were not functional.
- The investigation revealed that the security company provided the right amount of manpower, training and equipment as required by the contract and industry standards. The actions of the security guards were found to be reasonable and prudent, and may have actually prevented additional injuries. The evaluation of the college revealed that they did not adhere to the contract responsibilities, failed to limit access to the college, did not have adequate lighting, and had landscaping and other building design issues that prevented observation of criminal activities. By the end of the investigation, the security guard company was provided with a capable defense, while at the same time, demonstrating that the real liability rested on the college.
Why Every PI Should Say No
Any PI who has a full-time business with employees and normal overhead hates to turn a case away. However, there are times when the best thing you can do is walk away from a client. Domestic cases are the most common types of investigations that call for all of the investigator's senses to be on-guard. I have learned that dealing with individuals has the potential to go astray more than your normal corporate or insurance case. Failing to lay the groundwork or short cutting a consultation can create major problems in the end. I always spend more time interviewing the potential client in a domestic case than I do in most other cases. One case in particular had the potential to backfire more than most.
I had a male subject named Ken who called and had to meet with me as soon as possible. My schedule allowed some time that same afternoon and the subject presented himself as a nice, easy to get along with man. He indicated that his wife had dropped him off at work the day before and failed to pick him up after work. He caught a ride home and when he arrived, all of the furniture and household belongings were gone alone with his five-year-old son. Ken indicated that he would understand if his wife didn't want to continue their marriage, but he wanted to know where his son was and to see him on a regular basis. At one point during the consultation, I boldly stated that she probably got tired of his beatings and decided to run from him. This would tend to antagonize most men, but he kept his cool and continued to stress the need to find his son. Convinced that he posed no problem, I agreed to help. Ken gave me the name of his wife's sister, who lived in another town, but did not know where she lived. He was convinced that his wife was hiding out with her sister.
I began attempts to locate the sister. Fortunately, he gave me the wrong name and I pursued a person that didn't exist. Several days later, I walked in the house just in time to see his mug shot on the TV and the news indicating a warrant for his arrest was outstanding. He had located the mother-in-law and shot her execution style because she wouldn't tell him where her daughter's were. In the mother-in-law's purse was a piece of paper that directed him to a storage unit. Ken broke into the unit, found other documents that directed him to the sister and her apartment. He conducted surveillance and one morning observed his wife and son exiting the apartment. Ken approached his wife, who shot at him with a handgun but missed. He returned the fire, striking her but not killing her. Ken grabbed his son and fled. Several days later, police were called to a bank for a suspicious person call and found Ken and his son sitting in his car. He shot himself with his son sitting next to him in the car.
This is an extreme case example, but a realistic one. Fortunately, as soon as I discovered what was occurring, I contacted the police department who reviewed my file and concluded that I had nothing to do with Ken finding his wife. This was one of those times that cause you to stop and review policies and procedures. I now have strict guidelines on accepting domestic cases. In addition, my disclaimer on the front of all reports also include the following, "The client and/or their representatives has represented to Kelmar and Associates that the information enclosed in this report will be utilized in a lawful and non-violent manner and agrees to hold Kelmar and Associates and their representatives harmless from miss-use of any or all of this information." Trust me, this does not prevent this from happening, but is one of many steps that we as PI's should take.
One of the most important aspects of a consultation is making sure that the client understands what to expect from the PI. Everything from what will be in the report to the cost and time frame should be outlined. Remember that they probably have never had any prior experience with a PI. As a PI, we have to treat our business like a business, but we should remember that we can say no to a new case!
An Historical Summary Of Spying
Ask a cross-section of people when “spying” came into being and you will get a variety of answers. Most of these answers will probably deal with Vietnam, WW II, the Cuban Missile Crisis or possibly a little earlier. For the most part, people are unaware that spying and investigations have been occurring since the beginning of mankind. As the founder of the Association of Christian Investigators, I often get asked similar questions that have their origin in the Bible. The Bible is quick to point out some cases in which spying was used. Whether you believe in God or not, the Bible has been accepted as a true and accurate account of the history of mankind. Therefore, we can see that spying has it’s roots as far back as 1450-1410 B.C. In Deuteronomy, the Israelites were seeking a new land in which to inhabit. Many of the men were concerned about the territory they were preparing to enter and voiced their concerns to Moses. Chapter 1, verse 22 states, “Then all of you came to me and said, Let us send men ahead to spy out the land for us and bring back a report about the route we are to take and the towns we will come to.” At this, 12 men were sent out to investigate and returned with their reports.
The next time we hear about spying is in Joshua 2:2, which states, “The king of Jericho was told, look, some of the Israelites have come her tonight to spy out the land.” Later, in Joshua 7:2, we see that once again the Israelites set out spies, “Now Joshua sent men from Jericho to Ai, and told them, go up and spy out the region. So the men went up and spied out Ai.”
We see that between 1400-1000 B.C., the technique of using a double-spy came into being. In Judges 1:23 it states, “When they sent men to spy out Bethel, the spies saw a man coming out of the city and they said to him, show us how to get into the city and we will see that you are treated well. So he showed them, and they put the city to the sword but spared the man and his whole family.” Later in Judges 18:2 we see spying once again, “ So the Danites sent five warriors from Zorach and Eshtaol to spy out the land and explore it.”
In 2 Samuel 10:3 and 1 Chronicle 19:3, we see where “counter-spying” took hold. The verses indicate, “Do you think David is honoring your father by sending me to you to express sympathy? Haven’t his men come to you to explore and spy out the country and overthrow it? So Hanun seized David’s men.”Jump ahead in time to 49-52 A.D. and we see in Galatians 2:4 that spying was still occurring. “This matter arose because some false brothers had infiltrated our ranks to spy on the freedom we have in Christ Jesus and to make us slaves.”
The Roman army became interested in spying in their attempts to uncover the identities of early Christians so that they could persecute these subjects. From this, the Roman army also utilized the technique against other armies that they conquered. According to India history, they had two ministers in ancient Indian history, Chanakya and Kautilya who were reputed to have created a network of informants and spies in other kingdoms . By doing this, they were able to assist their kings in consolidating their empires and in becoming more powerful.
Our own country has been filled with accounts of spying. Early on, the military referred to them as “scouts,” and they were used by the Spanish, French and English explorers. The scouts became early recruiters of double-spies simply by winning the friendship of the Indians so as to learn more about their strengths and weaknesses. Jump forward again in time and you will recall how the U.S. Calvary used Indian spies to seek out the opposing forces.Eventually, came the Pinkerton Security agency which was originally established to maintain security for the railroad and eventually branched out into detective work. Everyone interested in the criminal justice system knows about Pinkerton.
With the onset of WW I, came a new sense of urgency in spying. New technology designed specifically for spying was manufactured and the welfare of the United States became an ever increasing burden. The responsibilities of keeping the U.S. up-to-date on the actions and intentions of possible aggressors helped to usher in spying as we know it. However, the earliest foundations of spying are seldom discussed. This is truly one of the oldest professions with a long and respectable history.
Common Mistakes In Surveillance
When you think of mistakes involved in surveillances, you typically think that it was due to the investigator being a rookie or someone getting burned because they got too close to the subject. The fact is, this could have been the end result of a culmination of errors. Even the most seasoned investigators make mistakes, but prevention and planning is definitely the means to an end in surveillance.
Few investigators take the time to properly plan for the investigation. Because time is money, many rush out to conduct the surveillance before taking the time to set the stage. I have run a local courthouse criminal check on my subject, even though the client didn’t ask for it, and found that the subject had been to prison murder. I think that this is something you should know! Checking the area to determine the main streets that the person will probably use, the schools and businesses that they may go to and any other ways out of the subdivision will be an aid in the long run.
Even when an investigator takes the time to check out the area and properly plan, they often show up with less than half of a tank of gas. I have followed people all day and used almost a full tank of gas. It is pointless to conduct surveillance with less than half a tank of gas and end up having to drop the pursuit due to a lack of fuel. Initiating surveillance with dirty windows is another common mistake. Besides creating problems with driving and seeing, it helps to blur the video.
A common mistake associated with equipment is failing to make your camera covert. When you work a case in the evening, early morning hours or in close proximity to the subject, letting them see the red indicator light on the front of the camera that comes on when you record is like sending up a flare. I recommend that you use a piece of black electrical tape to cover this and any other areas on the camera that may reflect light. In addition, it should be noted that light from a street light or from the sun has a tendency to reflect off of watches, diamond rings and similar items and therefore care should be taken to protect from this. While on the subject of video cameras, you may consider taking the end of an earpiece or similar plug and cutting the cord off. You can then place the plug into the microphone jack that will eliminate any sound from getting recorded onto your videotape. I have seen many PI’s who get embarrassed when the video is shown to their client and they begin cussing on the tape because they forgot to not record the sound.
As investigators, we take considerable effort to conceal ourselves and to blend in. One of the ways is to use proper window tint, curtains and a sun visor in the front window. However, playing “peek-a-boo” with neighbors isn’t going to work if you have the stereo in your vehicle turned up too loud. The next time you are in a residential area, turn your radio to the level that you would normally have your radio. Step out of the vehicle and see how far away the music can be heard. With all of the glass and limited insulation in vehicles, it doesn’t take much for someone to know you’re in the vehicle. The noise level should also be a consideration when using other items such as a two-way radio or cellular telephone.
While sitting on surveillance, you can get into routine of simply staring at the subject’s house or car. Even when covert, you should always remember to keep checking your mirrors and the yards around you. People are more exercise conscious now and if you see some neighbors out for their morning walk, you will have time to turn the volume down on all your radios if you see them coming.
PI’s are like everyone else in the business community and most have all the toys such as laptop computers. Although the brightness can be adjusted on most models, the investigator should remember that this posses a threat to their concealment effort. I have also seen PI’s who have portable TVs game-boy computer games and similar items that also need to be evaluated for their lack of covertness. The screen savers, game noises and music will also be a give-away if not controlled.
Another common mistake among PI’s conducting surveillance comes from those who smoke. It is a common routine to crack the windows on the vehicle to let the smoke out. Unfortunately, doing so has the result of sending up smoke signals to everyone around you. I have actually witnessed a PI open the door on their vehicle and dump out their ashtray on the residential street while conducting surveillance. It immediately becomes an attraction getter to those passing by and makes the neighbors whose houses you are sitting in front of very agitated.
Conducting surveillance at night has many advantages and disadvantages. I have seen PI’s try to sneak out of their vehicle at night to use the bathroom, stretch or talk to their relief. When they open the door, the interior light comes on like a spotlight. If you interior light is set to come on when you open the door, I would suggest that you set it to come on only when you turn the knob to make it do so. If you can’t control the light by the knob, take the bulb out of the light holder.
If you have been a PI for very long, chances are you have had to go “down and dirty.” This refers to having to climb through weeds and dense vegetation to set up surveillance. It does absolutely no good to go to all the trouble just to have your pager go off or your cellular phone ring and gives you away. When I conduct this type of surveillance, I take my cellular phone with me in case I need to reach someone or the office needs to reach me. I tell everyone involved in advance and set my pager to vibration and then turn on my cellular phone to make the call. I do not keep the cellular phone on and only have it on long enough to make the call. In addition, I have an earpiece for my two-way hand-held radio. Incidentally, if you don’t keep an old set of cover-all and a set of boots in your vehicle, you soon will see the need! As another reminder, always pick up several rocks to take with you while in the weeds. If a dog starts wondering your way, you can throw a rock in the opposite direction to get the dog off your trail and chasing a make-believe rabbit.
As you can see, there is more to surveillance than just the surveillance itself. A good PI has to continually evaluate their every movement for noise, distraction and breech of covertness. There is no reason to make you your worst enemy.
Fighting Fraud
On the fundamental level, Webster's Dictionary defines fraud as "deception in order to gain by another's loss; craft; trickery; guile". As the owner of a private investigation company, I have found that on a practical level, fraud is much more and takes many diverse scenarios. Fraud is a loose term that is somewhat over-used within the industry, and even could be the scape-goat of other underlying problems. Often, "fraud" is a term thrown up to management to gain their attention or to make the potential problems seem worse that what they are so that bigger budgets can be obtained for the security division. The ineffectiveness of certain security functions, policies or personnel issues can often be the real underlying issue. The term, fraud, seems to conjure up somewhat of a mystical, all encompassing catch all. Improperly labeling a situation as fraud can present legal ramifications, therefore a potential crime should not be addressed as fraud until it is precisely designated as such. In addition, close-communication with the police and district attorney's office should be maintained to insure that the fraud investigation meets the basic criteria for successful prosecution. Of course, no all organizations want to prosecute the offender (s) due to negative press. Under these circumstances, the investigator should be careful of their terminology to prevent any possible lawsuit.
Fraud is diverse and can take place at any level of society or any level of an organization. Typically, there is internal and external fraud. Internal fraud primarily deals with employee related fraud, whereas external fraud presents itself through those outside of an organization. The apparent link between the two seem to be the existence of circumstances which makes fraud attractive to a particular organization or circumstance. For example, a person who is well-versed in check cashing scams may pass the illegal instrument at a store that does not have good check approval policies. In contrast, a vice-president of a bank may attempt to juggle the figures on an account to cover their embezzlement if they are in charge and have discovered a "fail-safe" plan for covering up their crime. In each example, both subjects were presented with a set of circumstances that lended themselves to a particular type of fraud.
Because there are so many types of fraud, an investigator has to be able to be versatile enough to adjust to each particular situation. The premise is the same; identify the elements of the crime, trace the leads, secure the evidence and identify the culprit. Seems easy enough until you go from investigating a computer fraud to a worker's compensation fraud which have different elements altogether. Therefore, to better understand the investigation of fraud, I will use examples of actual cases our agency has worked.
Our agency was contacted by a bank, who indicated one of their tellers had found some "discrepancies" in their records and were concerned about the possibility of internal fraud. We immediately identified those tellers who had access to the money and tape registrars in question and initiated a background investigation to determine whether any of the subjects appeared to have dramatically changed their economic status recently or had obvious financial problems. Secondly, we began to audit the records in question to positively identify a crime and the amount of money believed missing. Next, we began to interview the tellers and their supervisors regarding their normal operating procedures and their personal lifestyles. We were able to narrow the scope of the investigation down to several factors through these tactics. The initial results indicated that there was at least $150,000 which had been embezzled over a two year period. In addition, we discovered some problems in the accounting and the accountability process of the tellers. The investigation also began to point to a supervisor who appeared to have a more affluent lifestyle than her income would provide. What we eventually learned through various record checks and interviews with neighbors of the suspected supervisor would astound our client. The supervisor was being considered for promotion to vice-president of the bank and therefore our client kept directing the investigation away from the subject. However, we were able to confirm that the subject had been accepting large deposits from a local car dealership and then taking the money for herself. When the dealership made their next deposit, she would let that cover the prior deposit and then embezzle whatever was left over. By interviewing the neighbors, we discovered that the employee had been taking her neighbors and friends on all-expense paid weekend excursions to Las Vegas. Unfortunately, the money had been spent, but the bank was able to correct their policies and prevent any further loses. The resulting investigation revealed internal fraud which could have been prevented if proper procedures and policies were in place.
This particular bank was a small institution with only three drive-through branches. Because they were a small home-town bank, they treated their customers and employees like family. Unfortunately, this attitude towards their employees is what supplied the opportunity for this fraud. The bank administrators were versed in normal banking procedures but chose to over-look some of these because they felt the normal threat of internal theft was non-existent because all employees were "family". Although they typically conducted a background check on all potential employees, their policy stopped there. The bank now conducts background checks on all employees once a year so that any dramatic change in economic standards, police contact such as alcohol or drug abuse and similar concerns can be identified and acted upon. The bank had also failed to follow their own policy concerning teller transfers. According to their policies, tellers and account executives were to be transferred to other accounts every quarter. In addition, the tellers were suppose to rotate from the main branch to the three drive-through branches. None of these things were being done. The supervisor who committed the fraud was suppose to have her daily tapes checked and initialed by another supervisor, which was also not being done. In this case, the supervisor was well liked, had been with the bank for 14 years and was therefore allowed to remain at her job function without alternating jobs or having her work checked. One of the red flags associated with fraud is when an employee refuses to take paid vacations. This supervisor had not taken a vacation in more than three years and the crime became apparent when she finally had to enter the hospital. A teller who filled in for the supervisor discovered the inconsistencies, otherwise the supervisor could still be getting away with the fraud.
In a separate issue, our agency was employed to investigate a possible fraud and/or conflict of interest. Our client, a trucking company, suspected a vice-president of operating a trucking company of his own in direct competition and in violation of company policy. Our agency initiated the investigation by checking the county assumed name records, the Secretary of State and State Comptroller's records and found listings in all three identifying the vice-president as the owner of a separate trucking company. Although this proved that a conflict existed, we still had not obtained the information needed to show that any damages had occurred to our client's business. We therefore initiated surveillance and was able to obtain video documentation of the vice-president using his trucks, along with our client's trailers to haul merchandise from our client's customers. This was still somewhat circumstantial, so our agency set up a "new" operation that needed our products hauled to our clients and contacted the vice-president for a bid. The subject was called at our client's office and when he met with our investigators, he presented a bid from our client and from his own company. We could now demonstrate that direct competition was being conducted. Additional interviews with some of our client's customers resulted in our agency obtaining copies of invoices that the vice-president's personal company had been paid, which helped show actual damages. In this case, the internal fraud included theft of clientele information, theft of services, and re-distribution of assets. The client could have avoided some of these issues if they had paid attention to the supervisor's periodic written ratings by his subordinates (anonymous) and had adhered to their policies regarding client relations.The trucking company had all employees complete an anonymous appraisal of their supervisor once every six months. Although this was completed, no one bothered to read them and they sat in a pile in a file cabinet. Had they taken the time to review the documents, they would have seen where employees had made some direct comments concerning the supervisor "spending company time in pursuit of other business interests" and a decrease in the favorable attitude of the employees towards their supervisor. Secondly, their policy required a member of management to make follow-up visits with clients regarding the satisfaction of their services, attitude of employees and related issues. Had they done this, they would have found what our investigators found-clients who knew of the supervisor's other business. Of course, they stated that the vice-president indicated that our client's company was growing too fast and they decided to set him up in a sister company for tax shelters. In addition, had the client paid attention of the vice-president's expense account, they would have found expenses on days when the subject was suppose to be in one part of the State dealing with our client's customers when he was actually in different locations marketing his own company.
In a different issue, a client called our agency after an employee had apparently changed her lifestyle which included more expensive clothes, jewelry, a new car and a conversation where she was overheard saying that she had bought her mother a mink coat. Our client knew that her salary was less than $17,000 and she would not be able to afford these luxuries. A background investigation was initiated with very little significant information being obtained. The next step was to observe the subject's activities at work through the use of hidden video cameras. Sure enough, the subject was observed sneaking company checks from a supervisor's desk. The investigation revealed that she would make the checks out to some of her friends, who would cash the checks and split the profit. Through an audit of the books, it was found that she had been responsible for fraud in excess of $100,000.
While conducting this investigation, our cameras also documented one of the roots of the problem. The company checks were locked in a cabinet with only one supervisor per shift having the key. The supervisors were suppose to keep a log of each check as they were checked out and the on-coming supervisor was suppose to check the log against the checks before signing off on the supervisor's sheet to relieve the off-duty supervisor. The cameras found that none of this was occurring and that the supervisors would get 10-15 checks at the start of the shift and place them in their desk drawer for convenience. The desk drawer was not locked and was unattended for at least two hours per shift. Needless to say, opportunity presented itself one too many times.In a totally different type of fraud, our agency was recently employed to determine who was breaking into our client's computer program after hours. The client was located in a twelve story office building and had less than twenty employees, of whom no were suspected. The first glaring problem was the lack of computer security that our client was using. We convinced the client to install computer security programs, assign access codes and to turn all of the computers off at night. Next, we installed hidden video camera lenses which were in wall clocks, smoke detectors and an exit sign, which were all linked to a 48 hour long-play video recorder. This system was then lined to motion detectors which would trip the system. Unfortunately, against our advisement, the client called an employee meeting and announced the problem and the solutions that they had taken. After these measures were taken, no break-ins occurred. Since we had already crossed out the possibility of modem access, it seemed somewhat apparent that an employee was responsible for the break-ins. Our focus therefore changed to educating the client regarding internal fraud and providing policy breeches. The next step involved conducting background investigations on their employees to better determine any party with characteristics towards criminal behavior. Through these and other searches, we concluded that one employee had taken on too much debt and had decided to blame their employer for the situation. The employee had decided to break-in to various files to gather confidential information on the business, it's clients and other employees. Fortunately, enough circumstantial information was developed to allow investigators to approach the subject, who subsequently confessed to the plot.
This situation could have been prevented using several different methods. First, the client failed to have any computer security programs in place, even though they had financial information, accounts, human resource files and product development documents on the system. We convinced the client to purchase some of-the-shelf security programs which makes employees enter codes to start up the system and different codes to get into different areas of the system. The computer main-frame, as well as each terminal are now turned off each night to help prevent access by modem. In addition, all lines, including their computer telephone line is forwarded to their answering service each night. An internal "employee satisfaction" questionnaire was developed in an attempt to keep abreast of employee attitude changes and supervisors are now encouraged to take employees to lunch once a month to enable a rapport to be established so that employee dissatisfaction and problems can be addressed in a non-threatening work environment.In yet another case, our client indicated they had an employee who had been receiving life threatening notes that were left on her desk. The employee immediately claimed a stress related worker's compensation injury, was off of work and had demanded a settlement in excess of $50,000. Our investigators interviewed all employees in the office (40+) and initiated background investigations on the injured employee. A review of the worker's compensation records revealed the employee had a history of suspicious injuries. A check of the civil records indicated two law-suits against former employers for a worker's compensation injury and for sexual harassment. Documents with the claimant's hand writing were located and compared to the notes left on the employee's desk. From a lay person's view, the handwriting appeared to be very comparable. The interviews resulted in at least five employees who were told by the claimant that she didn't like working at the business and wished they would fire her so she could file a wrongful termination lawsuit. Once all the evidence was compiled, the investigators met with the employee and indicated their suspicions. The employee eventually became concerned about the probable involvement of the police and suggested that the whole affair be dropped. Based on the client's wishes, the entire episode came to a close after the employee signed an affidavit indicating she had set the whole thing up.
In this case, the client had made it a policy to conduct a background check on all potential new-hires. However, they had become selective as a means of cost-cutting and were down to conducting investigations on the average of 1 out of every 5 new hires. Secondly, because of the type of work the client performed, a battery of psychological tests were suppose to be administered as well. The program had been discontinued as another means of cutting costs. The client did not use employee exit interviews when employees left their company. If they had, they would have discovered that some of the co-workers sought other employment as the working conditions had gotten more than they wanted to deal with since this subject had been hired.In our final example, a client approached our agency to conduct an investigation on their business partner. The client had hired a CEO approximately two years before and had recently made him a junior partner in the company. After noticing funds being wired out of their account to unknown accounts in Europe, our client became suspicious. The CEO had indicated that he had worked for his previous employer for eight years. What we found is that the subject took a year off in between jobs, which has still not be accounted for. Before this, he worked for a company which filed a lawsuit against him for embezzlement through falsifying expense accounts and creating a bogus company to have expenses paid to. Prior to this, he actually worked for the employer he indicated, but only for a short time. During the investigation, our agency found that not only was he sued by his former employer, but the attorney generals in 14 different states, along with the postal inspectors had filed lawsuits against him for deceptive trade practices, mail fraud and fraudulent solicitation. Once again, had our client had a policy of conducting background checks on potential business associates and employees, this could have been prevented.
As you can see, fraud is very diverse and can easily be mis-diagnosed. In some of these situations, the client could have easily continued to be victimized by fraud. The use of a good internal awareness training program, adherence to policies and practical observation can help stem fraud.
Nursing Homes Gone Astray
I recently have become involved in a travesty of justice regarding the nursing home industry. The family of a lady who had been in a nursing home asked me to check into the nursing home where their mother was a resident because they suspected she had been mistreated. During the course of the investigation, I located and interviewed 20-30 former employees of the nursing home. What I found after interviewing these people lead me to one inescapable conclusion; I would never put a relative of mine into a nursing home without investigating them with a microscope.
The majority of the nursing home employees had worked for 4-5 other nursing homes and they indicated that the abuse and neglect occurs in various degrees in almost every nursing home. It would have been one thing if only one or two employees told me some of the horror stories, but almost everyone interviewed agreed that the patients were mis-treated. It is kind of hard to believe and you almost refuse to believe that someone would intentionally abuse the elderly, especially when you realize that they could be your mother or father.
During the interviews of the ex-employees, I was told that it was common for the employees to move the emergency call light buttons away from the patients to keep them from annoying the staff. Some had even unplugged the call light and replaced it with a "dummy" plug that they put into the electrical socket to keep the call light from going off. If a patient became agitated for some reason, the employees indicated they would often place the patient into physical restraints without a doctor's order. If they didn't want to be that obvious, they would give the patient a "chemical restraint", which would knock them out. Thefts were a major problem according to the employees and some even indicated that some businesses had donated some clocks, radios and tape players for the elderly just before Christmas and within two days, none of them could be found anywhere in the nursing home.
Almost every employee indicated they knew when a state audit was coming because all nursing homes keep a closet full of new sheets, curtains, table cloths and things of that nature that can be put out while the audit is in progress and taken away afterwards. The employees on the 3-11 and 11-7 shifts indicated that it was common to find some employees on those shifts sleeping in the TV room, which created more problems for an already understaffed floor. According to the information, it was not uncommon to find aides giving out medicine, starting G-tubes or signing charts that only licensed LVN's or RN's are suppose to handle.
Then I learned about "slam-dunking." This term is given to those patients who are in wheelchairs and get lifted out to be placed into bed. According to the employees, slam-dunking occurs when the aid "throws" or otherwise roughly mis-handles a patient while putting them back into bed. Since the elderly usually have brittle bones to begin with, this is encouraging breaks and bruises. Every employee interviewed indicated that staffing is a problem in all nursing homes and because of the shortage of staff, a lot of "bad apples" get into the nursing homes. Although almost every home has a policy that the patients have to be turned every two hours to prevent bedsores, it became obvious that this didn't occur due to understaffing and the laziness of employees. The nurses indicated that suspicious bruises were not to be reported on the patient's charts as this would create problems with the state. Therefore, only the most severe abuse appears to be documented.
I have interviewed employees who indicated that food was used as a source of punishment. The interviews revealed that the patient's food would be taken away from them as a source of punishment if they acted up in any way. The elderly typically have problems with nutrition as it is without having to take away food from them. Some nursing homes have gone to the adult diapers in an attempt to cut-down on laundry and bed stains. Unfortunately, according to the employees, this meant that the patients did not have to be checked as often.
I then stumbled onto some situations which are more of a one-of-a-kind, but which could have the possibility of being repeated. For instance, I was told about a situation where an aid was called into work early. When she arrived at 5:00 A.M., she was visibly upset due to a conflict at home. The nurse on duty gave her some medication to calm her down and she ended up over-dosing and having to be rushed to the hospital. Then there was the aid that would get upset whenever the elderly would have a bowel movement in their bed. She was caught using the patient's own bowel movement on the patient as tooth paste.
It became apparent from this one investigation that the nursing home industry is in need of some serious policing. The state offices that have the responsibility to regulate the nursing homes are under-staffed themselves, which contributes to the problem. One thing is for certain, if my relatives are ever forced into a nursing home, I will check out the nursing home thoroughly and put hidden video cameras in their room as protection.With more and more people reaching the age of retirement, problems like these are bound to become more prevalent. Before considering a nursing home, I would suggest the following:
1) Interview the administration and go through their preview of the facility 2) Return on the 3-11 and midnight shift and see how many employees they have, if the doors are locked and what the atmosphere is like3) Talk to some of the employees on the 3-11 shift and get their true opinions of the administration4) Check the nursing home facility through the local courthouse records to determine how many lawsuits they have had and the nature. You can also do this by logging onto www.knowx.com. 5) Check with the State Board to determine if the facility is properly licensed and what type of disciplinary action they have on record. 6) Check the facility and doctors ratings through the web site www.healthgrades.com 7) Conduct an "address survey" through the local police department. Give them the address of the facility and request a list of all police calls associated with the address for the past year. You will quickly determine what really goes on in the facility.
Even after you take all of these precautions, abuse may still occur to a patient. However, you will at least have made an informed decision that will give you and your family piece of mind.
Private Investigation - A Real Business
Tell anyone that your a P.I. and they immediately think of the ex-cop who got fired for being an alcoholic and now lives and works out of a small, dimly lit office. The truth is, many of our counter-parts once fit the stereotype. However, today's P.I.'s are business entrepreneurs who have to run their organization like any other business. Sure, there are still a lot of ex-police officers who retire and then start a business as a P.I. For the most part, these guys don't last long because they do not have the business skills necessary to have a successful business.
Many P.I.'s today still have a background in police work, but the typical P.I. is much younger, left the police department before retirement and have a college degree. The P.I. has to be proficient in marketing, business administration, human resources, budgeting, and all of the other aspects that comprise a business. The P.I. must be an ambassador of good faith as the way that they operate will either confirm the stereotype or provide a new and fresh outlook to those they deal with. In addition to being an ambassador of good faith, the PI has to be somewhat of a counselor. Often, a client contacts a PI knowing that they need help, but are unsure of exactly how a PI can help. The P.I.'s that conduct domestic cases usually have to console their client and provide some lay counseling to the subject.
The P.I. must also be an educator. Because T.V. has helped to create a miss understanding of what a P.I. is and does, the investigator must educate their client as to the reality of investigations. By properly educating their clients, business conflicts are kept to a minimum. The P.I. of today must also be somewhat of a computer guru. They have to be up to date on the most current data sources, use of the computer and the Internet.
To be successful as a P.I., the investigator must possess communication skills (both verbal and written). The days of talking in police jargon are long gone. Being the greatest investigator doesn't mean much if you can't put the information into written form and provide accurate verbal communication when called upon to testify. In addition to these skills, the P.I. must be adept at marketing. The P.I. may be the best investigator going, but if they are not able to generate business it really doesn't matter. They must learn the different methods of advertising, determine which ones are most effective for this industry and develop appropriate ads.
Once the P.I. has developed investigative skills, mastered the art of marketing and the other traits listed above, they still have to have typical business devices such as accounting and personnel skills. The business is just like any other, which includes juggling cash flow, paying bills and hiring and managing employees. If the P.I. can put all of the business skills together with good investigative skills, they may just make it in business. Just like any other business though, it is a business!
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