Sketchy job screenings lead to big trouble

Organizations want to hire quality employees, but many also don’t want to spend much money, time and effort screening them. However, ethically they should cast a wide net when searching for possible criminal histories. If they don’t, they will employ convicted fraudsters.

Edwin Husenfarfel, chief financial officer of a Manhattan corporation, was comfortable but eternally bored in his plush 71st floor office. Sixteen years after his second conviction for rape of a minor under the age of 14 and vowing to himself never to get caught again, Husenfarfel (obviously not his real name) was getting restless. He wanted more recognition as the rising star CFO of a Fortune 500 company. And he was going to lie about his past transgressions to land it.

Criminal psychologists and FBI profilers call this “escalating.” And fraud examiners call Husenfarfel’s decision to do whatever he needed to avoid getting caught again (which included lying about his past convictions) “fraud by omission,” one of the most common frauds in business. Human resources departments can help thwart these criminals by ethically choosing the best background screening methods to discover convictions regardless of the required effort, time and expense.

Husenfarfel’s never-ending quest for bigger money and more grandiose professional recognition drove him to seek employment with my client. (I operate one of the nation’s oldest employment screening firms.)

The company missed Husenfarfel’s prior crimes despite running what it thought was a thorough background screening process.

Even though Husenfarfel’s Minnesota Multiphasic Personality Inventory (a standard psychometric test of adult personality and psychopathology) came back with no adverse personality traits (obviously inaccurate), something just didn’t sit right with the company’s in-house recruiter. So, the company hired me to see if it missed anything in Husenfarfel’s background.

I was able to find Husenfarfel’s latest rape and murder conviction and final adjudication date, which overlapped the date of his application for employment and Husenfarfel’s legally required written consent authorizing his prospective employer to run a background check by 22 days.

That means that after serving a little over nine years in the state penitentiary with time off for good behavior, Husenfarfel was released from the jurisdiction of the court (case fully adjudicated) exactly six years and 343 days prior to his application with my client’s firm.

The state of California, in which the prospective employer — my client — was located, has a seven-year, statutory reporting limit. In other words, in California, fully adjudicated convictions that precede the date of consent by seven years aren’t reportable. So, you might ask, “How can you, an employment screening firm, provide a criminal conviction record to a client past the seven-year, statutory reporting limit imposed by the state in which the prospective employer is located if a conviction happened more than nine years past the legal reporting period?”

The answer is that apart from the no-limit nature of employment-based public record reporting available at the federal level under the Federal Credit Reporting Act (FCRA) Section 613(a)(2), [15 U.S.C. § 1681k], in several states the federal law defers to state law. And, in many states, a seven-year, state-level reporting limit is common.

What’s important to understand is that federal law imposes no limit to the extent of a person’s criminal convictions that can be reported by a consumer reporting agency (CRA). However, if a given state imposes a reporting limit, federal law is subordinated to state law, the lesser of the two limits are imposed, and the CRA must report only what’s legally reportable under that state’s reporting law.

For example, federal law allows for the reporting of all convictions, but because California limits the reporting of criminal convictions for employment purposes to seven years, fully adjudicated convictions that occurred seven years before the date of consent are all that’s reportable. That means, if a criminal was convicted 20 years ago but was released from the jurisdiction of the court, prison or parole within seven years and 364 days from the date that he consented to the background check, that conviction is reportable under California law even though the “conviction” is 20 years old.

In Husenfarfel’s case, the company that was considering hiring him generated the report in California, which has a seven-year statutory reporting limit. But even with that, his prior crimes were reportable because they overlapped with both the seven-year statutory reporting limit and the date of consent by 22 days. The company (my client) had a zero-tolerance policy for felony convictions. The 22 days became critical to the ultimate hiring decision. Because of the discovery, the company eliminated Husenfarfel’s candidacy.

No one in Husenfarfel’s present life knew about his past deeds. The town that he grew up in, and to which he repeatedly returned to commit his horrifying acts, kept cases like Husenfarfel’s conviction quiet and didn’t report any of its criminal cases to the FBI’s identification bureau — a chilling but often common situation.

Best practices for reporting options

What most employers, and an embarrassingly large share of background screening industry players don’t understand, is that CRAs have three reporting options when it comes to public records that could have an adverse impact on prospective employment under 15 U.S.C. § 1681k of the FCRA:

1. Good but amateur: reporting conviction(s) that occurred within a given statutory reporting period. For example, in several states a CRA might report convictions only for seven years back from the date of a consumer’s consent to perform a background check. Sadly, many amateurs only consider convictions as reportable, when in fact adjudicated cases from prior convictions that precede the seven-year statute are universally reportable if the final adjudication date overlaps the seven-year statutory reporting period.
2. Better but not great: searching back 10 years for convictions that occurred in which the adjudication(s) might overlap into a given statutory reporting period — such as one of the states that impose a seven-year reporting period.
3. Best practice, great: searching to identify attributable residential, employment or traveled to/from jurisdictions back to the age of emancipation (age 18) for attributable conviction(s) or adjudication(s) that might overlap a given statutory reporting period and strongly recommending to the end user that searches of all the applicable jurisdictions are the only way to ensure a complete convictions check.

Of course, Option No. 3 is the best practice because it opens the door for the widest possible search parameter for a CRA to determine the most complete information.

My client’s CRA, when initially searching for Husenfarfel’s criminal record, ignored all three options, and so it missed the applicable conviction that could’ve provided a window into Husenfarfel’s soul even if that window was only 22 days.

The screening firm ethically lapsed when it either was unaware of the available reporting options, ignored them or failed to advise the client of possible discoveries that could lead to reportable convictions and thus would’ve put Husenfarfel back in the driver’s seat had an attentive recruiter not smelled a rat.

Ethical basics for criminal records providers

1. To assure compliance with the FCRA, know and advise the extent of information reportable to end users.
2. Understand the methods of searching that are certain to gather the most complete and accurate conviction information from:
3. Know and communicate to end users the limits of any non-public repositories, such as their depth and robustness of information and the breadth of their file capture.
4. Ensure that search platforms encourage thoroughness in the capture of all applicable convictions.
5. Know the information that courts can provide on felonies and misdemeanors and then advise clients that to determine the full extent of available convictions that must meet either the end-users’ criteria or — in the absence of those — reporting standards.
6. Quickly report applicable convictions to clients.

Poor background check of a violent bus driver

After a bus driver completes his shift, he stops and parks his bus. An elderly, disabled passenger asks the driver to drive 100 yards further so he doesn’t have to walk so far to his stop. The bus driver curtly tells the passenger that he’s at the end of his shift and orders him off the bus.

The passenger uses several racial slurs to express his displeasure. The driver removes his uniform shirt, gets off the bus and beats the passenger mercilessly. The driver is arrested, convicted and sent to jail.

When the bus company was hiring the driver, it conducted an inadequate background check and so missed a three-count, armed robbery conviction from 20 years prior to the date of consent but with completed adjudication within seven days of the seven-year reporting statute of the state where it happened.

That’s six years and 358 days before the driver executed his consent to have the background check run. Best practice No. 3 outlined above would be the only way the background screening company could’ve known to report the horribly violent conviction for which the driver spent 14 years in prison and five years on parole.

The bus company also failed to contact the driver’s previous employers. If they had, they would’ve discovered that the driver had been terminated from one job for violent acts against a fellow employee and from two other positions for making threats.

This critical background information could’ve potentially prevented the attack on the elderly passenger and possibly significant trial damages or settlement. (At publication, this case is pending.)

Of great consequence in this and Ed’s scenarios are the ethics of both the background check purveyor and the end user.

Naturally, defense counsel in the case of the bus driver is desperately attempting to assert a faux industry standard that limits the reporting of any convictions in that state to the seven-year statutory reporting period and assumes that because the conviction was 20 years prior to the date of consent no conviction report was actually (legally) available to the bus operator.

That argument probably doesn’t have a chance of prevailing. Not only was the reporting opportunity within the statutory reporting limit but the unethical screening firm decided to not call itself a CRA even though by statute it was.

As a result of its positioning, the screener willfully ignored the appropriate federal reporting requirements, namely FCRA Section 607 and 613a2, which mandates accuracy in this context.

The screening firm for the bus company could’ve prevented this tragedy with strong ethics and thoroughness plus understanding and following the FCRA law on illegal and/or incomplete reporting including identifying itself as a CRA.

Many screeners refuse to call themselves CRAs. But under 15 U.S.C. § 1681k, a third party establishes itself as a CRA if it’s requested to search for and report public records as part of an end-user client’s hiring process.

Checking all legal repositories of criminal records

Are you shocked that not all criminal records appear in what most perceive is the root of all criminal information — namely the FBI’s Criminal Justice Information Services Division (CJIS)?

In 1998, the Boulder City, Nevada, Police Department, which openly and actively runs free fingerprint checks to local charities, provided a “no record found” result based on fingerprint submission to the CJIS for Larry Wisenbaker, a job applicant for St. Jude’s Ranch for Children in Boulder City. What a shame. (See Vegas authorities irate that they were never notified of molester’s background, Reno Gazette-Journal, Feb. 6, 2000.)

Unfortunately, computer searches at prosecutor Clark County Deputy District Attorney Gerald Gardner’s office also didn’t turn up a 1996 conviction for cruelty to a child at a home for children in Macon, Georgia, according to Counselor gets four life terms for abuse of children, by Bill Gang, Las Vegas Sun, Feb. 4, 2000.

St. Jude’s Ranch for Children hired Wisenbaker. During Wisenbaker’s trial for actively molesting 16 boys in just one year at the ranch, Gardner called Wisenbaker “… the most prolific serial sex offender we have ever prosecuted in this state,” according to Molester gets life terms, by Peter O’Connell, Las Vegas Review-Journal, Feb. 5, 2000.

Wisenbaker’s four life terms plus additional years will keep him in prison for 65 years before he’ll even be eligible for parole, according to the Las Vegas Sun article.

As the expert witness of record in the ensuing civil case against Wisenbaker, G. Dallas Horton, Esq. hired me to assist in the prosecution of the co-defendant, St. Jude’s, for negligently hiring Wisenbaker.

Within an hour of my retention on the case, I identified two jurisdictions in which Wisenbaker had committed similar crimes within the prior seven years in residential and employment jurisdictions in Texas and Georgia.

Neither of these jurisdictions cooperated with federal authorities to report Wisenbaker’s crimes, and therefore the fingerprint check by the Boulder City police department yielded the “no record” finding.

St. Jude’s Ranch lost the civil suit in a multimillion-dollar settlement.

Practicing comprehensive candidate identification

Usually the decision to thoroughly complete a screening job involves the expenditure of capital. Sadly, many if not most employment background-screening decisions are driven by budget and not competence (or compliance), so what happens far too often is that organizations substitute cheap data modules for in-depth background checks.

In the St. Jude’s Ranch case, if the Boulder City police department and the deputy district attorney had preceded the fingerprint checks with simple and inexpensive identification checks — performed — at the most basic levels, they would’ve identified Wisenbaker as living and working in jurisdictions not covered by the FBI’s Criminal Justice Information Services Division.

And had an astute and knowledgeable police investigator determined where Wisenbaker had lived within the previous seven years, a simple interagency call to either or both jurisdictions’ law enforcement departments would’ve yielded the same fruit that I was able to uncover through calls to the court clerk’s offices after I ran my ID check.

Unbelievably, Wisenbaker in his employment application with St. Jude’s actually admitted that he’d committed felonies, but he gave no details. No one in the human resources department followed up; if they had, Wisenbaker would’ve never worked for St. Jude’s.

In addition to finding undisclosed identifiers that might lead to the discovery of additional convictions, there’s the subtle but huge benefit of determining if the candidate has been truthful or is hiding something.

The goodie here is that once you’ve determined a candidate is lying, your organization can quickly dismiss their candidacy under the basic precept of truthfulness — the only non-recourse candidacy elimination tool left in the hiring context.

Fraud examiners, following one of the basic precepts of fraud examination, can ultimately determine if frauds have occurred by ensuring that they’ve, as much as possible, searched through the full information universe. If fraud examiners’ supervisors don’t allow them to do that then organizations will miss convictions.

How to thoroughly identify employment candidates

Cheap screeners aren’t always the ethical choice. They can potentially damage their end-user clients by failing to properly invest in the single most important tool in the screener’s toolbox: the relentless pursuit of identity.

A search at the very least must include:

1. Use of credit bureau Social Security number (SSN) identity and credit bureau header products independent of services that offer these products as “integrated” in their ID platforms, such as ID Verify®. The three credit bureaus between them offer up to nine identification products. Do you run all of them? What do you do if you don’t have access to all three? The answer is to run everything you can to get to a place where you’ve exhausted the potential for new information.
2. Poll several or all of the proprietary repositories such as TransUnion/TLO, LocatePlus, ID Verify, etc. for identities, name variations, SSNs and dates of birth (DOB) variations, and prior addresses.
3. Obtain identity products from all available sources until it’s clear that you’ve succeeded in thoroughly identifying the candidate, or at least, can’t find any more additions to an ID.

This process requires not only access to all available identification repositories but intimate knowledge of the completeness of each repository polled and the willingness of a screening company to subscribe to all available services regardless of costs.

Ethically bound to search all sources

Best practices in background screening dictate that organizations determine for a job candidate the depth and breadth of possible convictions and potential identity variations prior to dispatching researchers to applicable court jurisdictions. However, organizations often substitute ethics for the sale of incomplete data so the screener can meet the limited cost expectations of the potential end-user client, which wants to improve the bottom line.

Big data’s searchable fields over wide areas usually include many federal, state and local jurisdictions. Large private national criminal database repositories such as CoreLogic National Background Data and many others can be good friends or terrible enemies depending on the contexts. The databases can sometimes be incomplete or misreport records on the wrong persons. This data, however, is invaluable if screening organizations use it internally and not as final results.

We must never forget that the highest search value in addition to searching all applicable court records by hand and via the internet (where available) lies in using as many of the private repositories as possible to achieve satisfaction that we’ve arrived at the suitable universe of available information.

That process is expensive, but it’s only a tiny fraction of the human and financial costs associated with missing a conviction that might result in hiring a fraudster.

The cases here attest that organizations need to initiate fundamental, ethics-based, practical and thorough screening processes to assist in determining if candidates are worthy of their trust. It’s the ethical thing to do.

Thomas C. Lawson, CFE, CII, is the founder of APSCREEN, a factual employment screening firm. He’s a life member of the ACFE and a member of the ACFE Editorial Advisory Committee. His email address is: tomlawson@apscreen.com.