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COMMERCIAL INVESTIGATIONS LLC
The big three automakers recently begged Congress for $25 billion in bailout funds. The chief executives of Ford, Chrysler and
General Motors flew to Washington on luxury corporate jets. The representatives in Congress hinted that although it is a symbolic
gesture, cutting their own salaries and refusing bonuses would be an important one.
There is little doubt that the lawmakers skepticism and negative tone towards the executives and the decision to delay a vote on the
bailout was influenced by the actions of AIG executives after the insurance giant received $85 billion in emergency funds.
During an AIG Congressional Hearing, Rep. Elijah Cummings discussed a costly AIG executive retreat that occurred briefly after the
government bailout. The costs, he said, totaled $443,343.71:
“Have you heard of anything more outrageous - a week after taxpayers commit $85 billion dollars to rescue AIG, the company's leading
insurance executives spend hundreds of thousands of dollars at one of the most exclusive resorts in the nation...Let me describe for
some of you the charges that the shareholders, taxpayers, had to pay. AIG spent $200,000 dollars for hotel rooms. Almost $150,000
for catered banquets. AIG spent $23,000 at the hotel spa and another $1,400 at the salon. They were getting manicures, facials,
pedicures and massages while the American people were footing the bill. And they spent another $10,000 dollars for I don't know what
this is, leisure dining. Bars?”
House Oversight Committee Chairman Henry Waxman, D-Calif., added during his opening statement:
"Average Americans are suffering economically. They're losing their jobs, their homes and their health insurance, yet less than one
week after the taxpayers rescued AIG, company executives could be found wining and dining at one of the most exclusive resorts in the
nation."
FOXnews.com further described the panels distain for AIG executive’s actions that led to their financial trouble in the first place:
“The hearing disclosed that AIG executives hid the full range of its risky financial products from auditors as losses mounted, according
to documents released Tuesday by a Congressional panel examining the chain of events that forced the government to bail out the
conglomerate. The panel sharply criticized AIG's former top executives, who cast blame on each other for the company's financial
woes. "You have cost my constituents and the taxpayers of this country $85 billion and run into the ground one of the most respected
insurance companies in the history of our country," said Rep. Carolyn Maloney, D-N.Y. "You were just gambling billions, possibly
trillions of dollars." (http://www.foxnews.com/story/0,2933,434223,00.html)
Much of AIG’s problems could be attributed to the mortgage crisis because of its insurance of mortgage backed securities.
The mortgage crisis itself has countless examples of fraud. In San Jose, CA two brokers were convicted of a combined 62 felony
accounts and face up to a combined 60 years in prison for mortgage fraud involving $10 million in sub-prime lending (CBS5.com).
Along with AIG, mortgage giants Freddie Mac and Fannie Mae are under investigation by the FBI for potential fraud. The FBI is
investigating up to 24 large financial firms and how they possibly misrepresented their assets. In 2005, two senior level executives with
AIG were charged with security fraud. But it took the financial crisis and housing bubble burst to see that the dishonesty and greed may
have been deeper and more widespread than anyone imagined.
With the approved $700 billion federal bailout, lawmakers and Americans are pleading for accountability of CEOs actions and
compensation. But if senior-level executives and CEOs can be tempted by greed and go to great lengths to deceive for financial gain,
what about average employees? The executives may be held accountable and made examples of, but they rarely act alone. They may
be in a better position to abuse their power but the average employee typically has plenty of opportunity to commit fraud or theft as well.
Background screening can be a tool to help judge the quality and character of job candidates before they join your organization.
Looking carefully at past criminal behavior, including Federal Criminal inquiries can be vital before hiring a candidate for any position
where they have access to critical information or company assets. Inquiries such as Motor Vehicle Reports and Credit Reports can
help employers further evaluate the character of their job candidates.
According to the CRISP Report Strategies to Detect and Prevent Workplace Dishonesty:
“Asset protection studies indicate the same thing year in and year out: employees account for much, if not most, of a company’s
losses. Research has shown as many as 75% of all employees have stolen or otherwise harmed their employer. Coffin (2003) reports
that employee dishonesty is the fastest growing organizational problem for many companies. Employees have the best access to all
company assets. They know where cash is stored. They often need or are able to acquire keys, passwords, alarm codes, and safe
combination (Hayes, 2007). Some company associates, aware of security procedures and systems, believe they are able to accurately
weigh their risk of being caught if they steal. More significantly, employees assess the attentiveness of other workers. They know when
alert, caring managers and colleagues are present as well as when naïve or apathetic associates are in charge. Employee theft and
error can account for the majority of losses. A recent survey by Hollinger and Adams (2007) reports that retailers believe employees
account for 47% of their inventory losses. Employees steal in a variety of ways, but the result is always the same: loss of profits, low
morale, and even the demise of an entire business. Regardless of causal factors or excuses, all types of workplace theft and fraud are
wrong and harm organizations, other employees, customers, and reputation.”
For small businesses, it can be even easier for employees to deceive and commit fraud. It is usually more difficult for a small business
to recover from an act of employee fraud.
Congress has asked automakers to present a viable restructuring and business plan before they proceed with a bailout. Many feel
that the proposed $25 billion bailout will not make the U.S. automakers more competitive or efficient and that they will only ask for more
funding down the road. In this tough economic environment, it is more important than ever to make sure that your organization is
competitive and efficient.
One way to improve productivity and your bottom line is to improve the quality of your workforce and mitigate the risk through pre-
employment background screening. A good background screening policy can help assure that you hire the best candidates for your
company. To implement a background investigations policy, or to discuss your current screening process, contact a CI representative
today.
General Motors flew to Washington on luxury corporate jets. The representatives in Congress hinted that although it is a symbolic
gesture, cutting their own salaries and refusing bonuses would be an important one.
There is little doubt that the lawmakers skepticism and negative tone towards the executives and the decision to delay a vote on the
bailout was influenced by the actions of AIG executives after the insurance giant received $85 billion in emergency funds.
During an AIG Congressional Hearing, Rep. Elijah Cummings discussed a costly AIG executive retreat that occurred briefly after the
government bailout. The costs, he said, totaled $443,343.71:
“Have you heard of anything more outrageous - a week after taxpayers commit $85 billion dollars to rescue AIG, the company's leading
insurance executives spend hundreds of thousands of dollars at one of the most exclusive resorts in the nation...Let me describe for
some of you the charges that the shareholders, taxpayers, had to pay. AIG spent $200,000 dollars for hotel rooms. Almost $150,000
for catered banquets. AIG spent $23,000 at the hotel spa and another $1,400 at the salon. They were getting manicures, facials,
pedicures and massages while the American people were footing the bill. And they spent another $10,000 dollars for I don't know what
this is, leisure dining. Bars?”
House Oversight Committee Chairman Henry Waxman, D-Calif., added during his opening statement:
"Average Americans are suffering economically. They're losing their jobs, their homes and their health insurance, yet less than one
week after the taxpayers rescued AIG, company executives could be found wining and dining at one of the most exclusive resorts in the
nation."
FOXnews.com further described the panels distain for AIG executive’s actions that led to their financial trouble in the first place:
“The hearing disclosed that AIG executives hid the full range of its risky financial products from auditors as losses mounted, according
to documents released Tuesday by a Congressional panel examining the chain of events that forced the government to bail out the
conglomerate. The panel sharply criticized AIG's former top executives, who cast blame on each other for the company's financial
woes. "You have cost my constituents and the taxpayers of this country $85 billion and run into the ground one of the most respected
insurance companies in the history of our country," said Rep. Carolyn Maloney, D-N.Y. "You were just gambling billions, possibly
trillions of dollars." (http://www.foxnews.com/story/0,2933,434223,00.html)
Much of AIG’s problems could be attributed to the mortgage crisis because of its insurance of mortgage backed securities.
The mortgage crisis itself has countless examples of fraud. In San Jose, CA two brokers were convicted of a combined 62 felony
accounts and face up to a combined 60 years in prison for mortgage fraud involving $10 million in sub-prime lending (CBS5.com).
Along with AIG, mortgage giants Freddie Mac and Fannie Mae are under investigation by the FBI for potential fraud. The FBI is
investigating up to 24 large financial firms and how they possibly misrepresented their assets. In 2005, two senior level executives with
AIG were charged with security fraud. But it took the financial crisis and housing bubble burst to see that the dishonesty and greed may
have been deeper and more widespread than anyone imagined.
With the approved $700 billion federal bailout, lawmakers and Americans are pleading for accountability of CEOs actions and
compensation. But if senior-level executives and CEOs can be tempted by greed and go to great lengths to deceive for financial gain,
what about average employees? The executives may be held accountable and made examples of, but they rarely act alone. They may
be in a better position to abuse their power but the average employee typically has plenty of opportunity to commit fraud or theft as well.
Background screening can be a tool to help judge the quality and character of job candidates before they join your organization.
Looking carefully at past criminal behavior, including Federal Criminal inquiries can be vital before hiring a candidate for any position
where they have access to critical information or company assets. Inquiries such as Motor Vehicle Reports and Credit Reports can
help employers further evaluate the character of their job candidates.
According to the CRISP Report Strategies to Detect and Prevent Workplace Dishonesty:
“Asset protection studies indicate the same thing year in and year out: employees account for much, if not most, of a company’s
losses. Research has shown as many as 75% of all employees have stolen or otherwise harmed their employer. Coffin (2003) reports
that employee dishonesty is the fastest growing organizational problem for many companies. Employees have the best access to all
company assets. They know where cash is stored. They often need or are able to acquire keys, passwords, alarm codes, and safe
combination (Hayes, 2007). Some company associates, aware of security procedures and systems, believe they are able to accurately
weigh their risk of being caught if they steal. More significantly, employees assess the attentiveness of other workers. They know when
alert, caring managers and colleagues are present as well as when naïve or apathetic associates are in charge. Employee theft and
error can account for the majority of losses. A recent survey by Hollinger and Adams (2007) reports that retailers believe employees
account for 47% of their inventory losses. Employees steal in a variety of ways, but the result is always the same: loss of profits, low
morale, and even the demise of an entire business. Regardless of causal factors or excuses, all types of workplace theft and fraud are
wrong and harm organizations, other employees, customers, and reputation.”
For small businesses, it can be even easier for employees to deceive and commit fraud. It is usually more difficult for a small business
to recover from an act of employee fraud.
Congress has asked automakers to present a viable restructuring and business plan before they proceed with a bailout. Many feel
that the proposed $25 billion bailout will not make the U.S. automakers more competitive or efficient and that they will only ask for more
funding down the road. In this tough economic environment, it is more important than ever to make sure that your organization is
competitive and efficient.
One way to improve productivity and your bottom line is to improve the quality of your workforce and mitigate the risk through pre-
employment background screening. A good background screening policy can help assure that you hire the best candidates for your
company. To implement a background investigations policy, or to discuss your current screening process, contact a CI representative
today.
News Release
FOR IMMEDIATE RELEASE
FOR IMMEDIATE RELEASE
Contact:
Michelle Pyan, Commercial Investigations LLC President
518-271-7546
michellepyan@commercialinvestigationsllc.com
Michelle Pyan, Commercial Investigations LLC President
518-271-7546
michellepyan@commercialinvestigationsllc.com
| CREDIT CRISIS OR CREDIBILITY CRISIS? |
COMMERCIAL INVESTIGATIONS LLC (CI), a full service licensed private investigative agency, offers thorough
and affordable employment BACKGROUND INVESTIGATIONS. CI provides accurate, timely, cost effective and
fully compliant reports supported by high standards of customer service. CI also offers consulting services to
assist organizations with reviewing and auditing their BACKGROUND INVESTIGATIONS processes for compliance,
effectiveness and efficiency. CI provides the PROACTIVE TRUTHTM regarding applicants, thereby reducing
turnover and limiting exposure to civil liability.
and affordable employment BACKGROUND INVESTIGATIONS. CI provides accurate, timely, cost effective and
fully compliant reports supported by high standards of customer service. CI also offers consulting services to
assist organizations with reviewing and auditing their BACKGROUND INVESTIGATIONS processes for compliance,
effectiveness and efficiency. CI provides the PROACTIVE TRUTHTM regarding applicants, thereby reducing
turnover and limiting exposure to civil liability.
DATE: NOVEMBER 2008