Articles And Announcements
Avoid
fraud; don't hire a criminal.
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Dear RSI Client,
Each
month I try to talk about an issue that pertains to the
Multi-Housing Industry. As
I read different articles and publications I thought the
following article was really important to any type of company
that has employees. As
many of you know Rental Services has expanded its services to
include pre-employment screening.
I think the following article demonstrates the
importance of pre-screening employees.
Avoid
fraud; don't hire a criminal
By Al Lewis
Denver Post columnist
Wherever
there is a big pot of money, somebody is trying to steal from
it.
The
folks at Alliance Commercial Partners know this now.
The
Lakewood-based commercial real estate firm has money flying
everywhere. Since its 1996 founding, the firm has acquired or
developed 72 properties across the nation valued around $775
million. Earlier this month, Alliance sold Writer Square in
downtown Denver for $30.3 million.
In managing all that real estate, the firm is
constantly wiring funds to leasing agents, appraisers,
attorneys, banks and vendors.
Enter
Patricia Jagielski Ragusa, 43, who was Alliance's first
employee in April 1997. Alliance made Ragusa its director of
portfolio accounting and authorized her to transfer money over
the Internet so bills would get paid. Alliance even gave
Ragusa, a single mother of two, flexible hours and permission
to work from her Littleton home.
Ragusa
might have seemed innocuous at 4 feet 11 inches - a slight,
white, middle-class accountant with brown eyes and
shoulder-length hair.
But
here's what Alliance executives didn't know: "Ragusa is a
multi-state offender with a criminal history," according
to a Lakewood police report. Her rap sheet includes felony
theft, unlawfully carrying a weapon, and heroin possession,
according to a police report. If Alliance or its employment
agency ever ran a criminal background check on Ragusa, they
should have found this out.
Last
month, Alliance's chief financial officer, Douglas McCormick,
noticed that credits to a certain account came up $76,000
short. He soon discovered that money had been wired to a bank
account held in the name of Ragusa's son.
Ragusa
offered no explanation at first. Later, she indicated
"that someone must have gotten her password and her son's
information, and made the transfer," according to an
affidavit by Lakewood economic crimes detective Dave Voskamp.
Why? Maybe
someone just wanted to get her fired, Ragusa claimed.
A
deeper look at Ragusa's story revealed 72 transactions that
police say were fraudulent. Police allege that, since April
2001, Ragusa illegally wired more than $1 million to accounts
held by herself, her day-trader boyfriend in California and
her two teenage children. Only Ragusa has been charged. Police
arrested her Sept. 16. She is free on bond.
Ragusa
and her attorney, Robert Grossman, declined to comment, as did
McCormick and Alliance president Richard Stone. It will be a
long and embarrassing ordeal for both Ragusa and Alliance - a
company that boasts a "management and staff with a
combined 80 years experience in the real estate
industry."
"She's
a bad actor, but the company made it very easy for her,"
said Daniel Predovich, an independent fraud examiner in
Highlands Ranch who agreed to review Ragusa's case for this
column. Not only
did Alliance fail to uncover Ragusa's past, but it didn't have
proper internal controls for handling money, Predovich said.
The
company simply was too trusting.
"There should have been a segregation of duty so
that three or four people were involved in a wire transfer
rather than just one," Predovich said.
Predovich
said embezzlement cases like this keep him in business as a
private fraud investigator.
Often,
these cases are not reported to police, to avoid
embarrassment. They make companies - particularly those that
depend on their ability to attract investors - look foolish.
But Predovich says companies typically forgo criminal
background checks and aren't keen about those pesky internal
controls either.
"Most
folks who've hired me to do a fraud investigation never
expected that anybody would steal from them," Predovich
said.
Trust
is the basis of all business transactions. But when you give
someone the combination to the safe, it's a good idea to know
who they are.
"Employees
with need, greed and opportunity can and will steal unless
management is alert, and good internal controls are in
place," Predovich said.
Al
Lewis' column appears Sundays, Tuesdays and Fridays. Reach him
at 303-820-1967 or alewis@denverpost.com.
I
hope this article shows how even your most trusted employees
can present a risk. Quality
pre-screening could help mitigate this from happening to you
and your company. If
you don’t currently pre-screen call us.
If you currently are using a company call us for a
competitive quote. If
you have any questions about Pre-Employment screening please
contact me at 303-420-1212.
Sincerely,
Jeff
Malone
Regional
Marketing Director
Rental
Services, Inc.
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