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UBER BACKGROUND CHECKS MISSED CRIMINAL RECORDS

“The background-check service that ride-hailing company Uber uses to screen potential drivers did not flag the criminal records of 25 drivers who gave thousands of rides to customers in Los Angeles and San Francisco, prosecutors said Wednesday.

The findings were made public in an amendment to a consumer protection lawsuit filed last year by the district attorneys for Los Angeles and San Francisco. The suit alleges that Uber has misled customers about the safety of the app-based ride service, including how they screen potential drivers.

In the amended 62-page civil complaint, prosecutors detailed the criminal histories of 25 people who gave rides to passengers in Los Angeles and San Francisco in the last two years.

“I support technological innovation,” San Francisco Dist. Atty. George Gascón said in a prepared statement. “Innovation, however, does not give companies a license to mislead consumers about issues affecting their safety.”

The Times reported this month that four Uber drivers cited at Los Angeles International Airport had criminal records that would bar them from driving a taxi in Los Angeles.

Whether ride-hail drivers should be held to the same background-check standards as taxi drivers has been the subject of hours of testimony at Los Angeles City Hall, as lawmakers prepare to vote on a permit process that would allow Uber and its main competitor, Lyft, to pick up passengers at LAX.

Prospective Uber drivers are not required by state law to submit fingerprints as part of their background checks. The company says its background-check service identifies all criminal convictions in the last seven years.

By contrast, the Los Angeles Department of Transportation runs the prints of potential taxi drivers through federal criminal databases.

Uber and Lyft use services that can process screenings within days. They have both argued that using fingerprint checks would be redundant.

In a prepared statement, Uber spokeswoman Eva Behrend said that no background check is “100% foolproof.” Running fingerprints through state and federal databases can flag the criminal records of people who have been arrested but not convicted, “which can discriminate against minorities,” she said.

According to the amended lawsuit complaint, one driver was convicted of second-degree murder in Los Angeles and spent 26 years in prison. He gave a different name when he applied to drive for Uber, and a background report said he had no known aliases and no criminal history, the complaint said. The driver gave 1,168 rides over seven months, according to the prosecutors’ court filing.

Using fingerprints and checking federal databases would have identified the man’s criminal history, prosecutors said.

Prosecutors also said they found three unlicensed drivers who used someone else’s account to drive for Uber.

Five drivers had convictions for driving under the influence in the last seven years, the complaint said, and some still drive for Uber. The company has said it bars applicants with convictions for DUI in the preceding seven years.

Several drivers were convicted of fraud, including one driver convicted in 2010 of 29 felony counts of theft, grand theft, filing false or fraudulent real estate deeds, and money laundering, according to the complaint.”

ANOTHER CIRCUIT COURT RULES PAID SUSPENSION IS NOT ADVERSE EMPLOYMENT ACTION FOR TITLE VII

“Addressing an issue of first impression, the federal Third Circuit Court of Appeals (which covers Delaware, New Jersey and Pennsylvania), recently held that an employee’s suspension with pay is not an adverse employment action for purposes of Title VII. In doing so, the Third Circuit has joined several of its sister Circuits across the country, including the Second, Fourth, Fifth, Sixth and Eighth Circuits.

The case, Jones v. Southeastern Pennsylvania Transportation Authorityinvolved an employee who was suspended with pay while her employer investigated allegations that she had submitted fraudulent timesheets. She didn’t suffer any loss of income or compensation. She was off workwith pay. Nevertheless, the employee sued her employer claiming, among other things, sex discrimination and sexual harassment.

In evaluating whether or not the paid suspension could be considered discriminatory, the Third Circuit observed that Title VII prohibits discrimination with respect to decisions concerning hiring, firing, compensation and other terms and conditions of employment. Because suspending an employee with pay does not neatly fall within these categories, the court concluded that such a paid suspension could not be an adverse employment action for Title VII purposes. The lack of an adverse employment action similarly negated the plaintiff’s sexual harassment claim.

All in all, the decision is good for employers and ensures that those who do go the extra mile to suspend with pay do not get burned for doing so. Although the decision does not guarantee that an employee will not sue over a paid suspension, it does effectively curtail a Title VII claim in this context – and particularly in the Circuits that have adopted this rule. And doing so makes perfect sense: it smacks of unfairness that a company which pays an employee on leave might then be forced to also pay to fend off a discrimination or harassment claim filed by the very same employee who was on the paid suspension.

Practically, what does this case mean for employers? They have a choice to make: (a) pay the suspended employee and eliminate the potential for a discrimination claim; or (b) choose not to pay the suspended employee and accept the risk that the employee – and a court – would find the lack of payment as an adverse employment action.

Whatever choice employers make, they also must make certain they handle similar decisions uniformly and not in a way that would be perceived as discriminatory: selectively suspending some employees with pay but not others (i.e. those who are not be in protected classes) would only create a bigger problem. As with everything in the employment arena, employers constantly must evaluate the risks and benefits of their individual actions, while simultaneously keeping the big picture in mind.”

Originally posted by The National Law Review. Article can be found at http://www.natlawreview.com/article/not-all-good-deeds-are-punished-paid-suspension-not-adverse-employment-action-title-

SEC CLARIFIES WHISTLE BLOWER PROTECTIONS AGAINST EMPLOYER RETALIATIONS

“The Securities and Exchange Commission has issued an interpretive rule clarifying that whistleblowers are protected by retaliation by employers even if they have not reported their concerns to the SEC first.

The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 included a section offering incentives and protections to individuals who report possible violations of the federal securities laws, including protections against employer retaliation. The SEC issued rules in 2011 spelling out how the whistleblower protections would work, but there was some ambiguity when the SEC specified how whistleblowers should report a tip to the SEC in order to qualify for a whistleblower award, and those who would be protected from employer retaliation.

In particular, questions arose over whether an employee who first reported the matter internally to their employer, such as a compliance department, would be protected from retaliation from that same employer, or only those who reported directly to the SEC.

“Our interpretation best comports with our overall goals in implementing the whistleblower program,” said the SEC in the rule it issued last week. “Specifically, by providing employment retaliation protections for individuals who report internally first to a supervisor, compliance official, or other person working for the company that has authority to investigate, discover, or terminate misconduct, our interpretive rule avoids a two-tiered structure of employment retaliation protection that might discourage some individuals from first reporting internally in appropriate circumstances and, thus, jeopardize the investor-protection and law-enforcement benefits that can result from internal reporting. Under our interpretation, an individual who reports internally and suffers employment retaliation will be no less protected than an individual who comes immediately to the Commission. Providing equivalent employment retaliation protection for both situations removes a potentially serious disincentive to internal reporting by employees in appropriate circumstances. A contrary interpretation would undermine the other incentives that were put in place through the Commission’s whistleblower rules in order to encourage internal reporting.”

The Government Accountability Project, a whistleblower protection advocacy organization, and Labaton Sucharow LLP, a law firm that specializes in securities class-action lawsuits, wrote a letter Tuesday to SEC chair Mary Jo White thanking her for the interpretive rule, but also asked for further protections.

They pointed out that the new rule clarifies that any disclosure protected by the Sarbanes Oxley Act is shielded from retaliation under its Whistleblower Program. In effect, according to them, protection extends to disclosures within a corporation, to other law enforcement audiences, or to the public. Protection also extends to any violation of federal law, not just those enforced by the SEC. However, they cautioned that the SEC should take additional measures to address the remaining vulnerabilities they identified in a petition last summer to the SEC.

“Our July 2014 petition emphasized that new and creative forms of corporate prior restraint are preventing disclosures from happening at all, making academic the issue of subsequent retaliation,” wrote GAP legal director Tom Devine and Labaton Sucharow partner Jordan Thomas. “Merely presenting employees with nondisclosure agreements creates a chilling effect, and there are no rights for refusing to agree—only for violating one with protected speech. Further, corporations regularly file breach of contract lawsuits, theft of corporate records actions, and other litigation attacks outside the employment context. Realistically, to prevent a chilling effect on the flow of evidence necessary for SEC oversight, it is necessary to go beyond interpretations that restrict harassment of incumbent employees.” ”

Article posted by Accounting Today. Original article at http://www.accountingtoday.com/news/audit-accounting/sec-clarifies-whistleblower-protections-employer-retaliation-75468-1.html

TSA BACKGROUND CHECKS PASS 73 PEOPLE WITH POSSIBLE TERRORIST TIES

” Background checks by the Transportation Security Administration cleared 73 people for access to secure airport areas even though their names were on a federal database of possible terrorists, a senior official told a Senate committee Tuesday.

The latest security lapse came to light as John Roth, the inspector general at the Department of Homeland Security, delivered a scathing report on problems and blunders at the long-troubled agency.

They include inadequate baggage screening, hiring of convicted criminals, questionable spending, and narcotics smuggling and human trafficking by TSA employees.

“We remain deeply concerned about [the TSA’s] ability to execute its important mission,” Roth told the Senate Homeland Security and Governmental Affairs Committee.

The hearing was held a week after Jeh Johnson, secretary of Homeland Security, reassigned the acting administrator of the TSA in the wake of reports that auditors from Roth’s office had successfully slipped mock explosives and weapons past TSA checkpoints 67 out of 70 times.

The White House has nominated Peter V. Neffenger, vice commandant of the Coast Guard, to take the helm of the TSA. Neffenger is expected to win approval from the Senate committee after a confirmation hearing Wednesday.

In the latest case, Roth said, his investigators had found the names of 73 airport workers “with possible terrorism-related information” in a classified federal database that the TSA could not normally access.

“TSA acknowledged that these individuals were cleared for access to secure airport areas despite representing a potential security threat,” Roth testified.

Roth said the risk was discovered after he asked the National Counterterrorism Center to check more than 900,000 active aviation workers against the classified intelligence database called the Terrorist Identities Datamart Environment, or TIDE. It contains confirmed and unconfirmed information about people with potential terrorist links.

The search found 73 matches of people cleared for access to secure areas. Investigators immediately gave the TSA the names that raised concerns, Roth said. He did not say whether they included any TSA employees, when the discovery was made, or whether any of the people posed an actual threat.

The names of people who are hired by airlines and airport vendors are normally checked against a more narrow, unclassified database that is maintained by the FBI’s Terrorist Screening Center.

Last year, then-TSA head John Pistole sent a letter to the FBI asking that TSA background checks also include a search of the bigger, more inclusive database, Roth said. But the FBI and the intelligence community have not acted, he said.

“I can’t imagine the FBI would not have moved on this with the utmost haste,” Sen. Kelly Ayotte (R-N.H.) said at the hearing. “The bureaucracy can’t hold this up.”

The fact that 73 workers with potential links to terrorism had access to the secure areas of airports “really does give you pause,” Ayotte said, “because it really only takes one.”

Roth also repeatedly criticized the TSA’s use of PreCheck, which allows expedited screening of vetted passengers. He said the TSA allows expedited screening of nearly half the flying public, often by randomly pulling people out of line.

In one case, he said, a convicted felon who was “a former member of a domestic terrorist group” was granted expedited screening even though the traveler was “sufficiently notorious” that a TSA screener recognized him.

The screener “notified his supervisor, who directed him to take no further action and allow the traveler to proceed through the PreCheck lane,” Rush said. He did not identify the passenger. ”

 

 

Originally posted by The Los Angeles Times. Article can be found at http://www.latimes.com/nation/nationnow/la-na-tsa-security-lapse-20150609-story.html

PAYROLL FRAUD – HOW TO AVOID IT

“Make no mistake. Payroll Fraud is real.  According to the Association of Certified Fraud Examiners, it’s the number one source of accounting fraud and employee theft.  Check out these statistics:

  • Payroll Fraud happens in 27 percent of all businesses
  • Payroll fraud occurs nearly twice as often (14.2 percent) in small organizations with less than 100 employees than in large ones (7.6 percent).
  • The average instance of payroll fraud lasts about 36 months. That’s three years of paying ghost employees or overpaying existing ones. In Delaware, a School District Finance Director paid himself an extra $150,000 over eight years. He also underpaid several school administrators a combined $50,000 in one school year.

The reality is payroll fraud is not preventable, but is catchable.  Anyone can steal at any time.  The key is catching it and minimizing the risk. The best way in doing so is to reconcile your payroll at least quarterly with someone other than the person who runs your payroll.  Yes, it is that simple, and it probably costs you no more than a few hundred dollars each quarter.

There are two common types of payroll fraud, the first being timecard falsification, which can be easily caught through the reconciliation and employee review process I just mentioned. The second most common type of payroll fraud is “ghost employees.”  Ghost employees are just that.  They are employees that do not exist.  In one case that I heard about, the bookkeeper was paying herself a duplicate paycheck through the name “XYZ” and having the money deposited in her checking account. Nobody said criminals were creative.

The third most common type is one that is self-inflicted by the employer through worker misclassification and workplace fraud. It’s the illegal practice of designating an employee as a “1099 worker” or an independent contractor. Unscrupulous business owners do this to avoid paying payroll taxes, unemployment tax or workers’ compensation insurance and are therefore able to submit lower bids for projects, undercutting responsible companies.  Unfortunately, many other business owners may be misclassifying workers without even knowing it, such as if they designate tasks or set time with the contracted employee, if the 1099 employee works only for one company or if he or she is paid a regular amount each week or month. In these instances the company may be misclassifying a W-2 employee as a 1099 employee.  In the State of California, worker misclassification will cost an organization $25,000 per occurrence plus back payroll taxes and penalties.  Many states have similar harsh penalties.

In all cases, it is simply not worth it.  A business can survive and thrive while they classify workers properly. Most importantly, you’ll sleep well at night knowing that they don’t have to worry about the IRS or State taxing authorities knocking on their door.”

Originally posted by Forbes and can be viewed at: http://www.forbes.com/sites/matthewgarrett/2013/09/10/payroll-fraud-a-big-threat-and-how-to-avoid-it/

FORMER EMPLOYEE ARRESTED FOR STEALING MONEY FROM NONPROFIT GROUP

HUNTSVILLE, Alabama —

A former Big Spring Partners employee has been arrested for stealing money from the nonprofit downtown revitalization group, The Times’ news partner WHNT is reporting.

Stefanie Nicole Hamilton-Dryer was arrested Nov. 16 and charged with two counts of first-degree theft of property, plus a single count of second-degree theft of property, according to WHNT.

Dryer’s arrest followed an internal audit that revealed Big Spring Partners was missing $10,300, WHNT reports. She was booked into the Madison County Jail on bonds totaling $25,000 and released the same day.

Her first court appearance on the theft charges is scheduled for Dec. 12.

In a written statement provided to the media Monday afternoon, Big Spring Partners Chairman John Stallworth said the missing money came to light during a financial review of the Huntsville-Madison County Veterans Memorial, which was managed by Big Spring Partners.

“The employee responsible for these funds was allowed to resign while we investigated this fully,” Stallworth said. “After the audit, and a more complete investigation, our findings were reported to the appropriate officials.”

All partners on the veterans memorial were later “made whole,” said Stallworth, and the theft did not involve any city tax money given to Big Spring Partners to market downtown.

Located next to the Historic Huntsville Depot, the $3 million veterans memorial honors more than 360 local service members killed during World War I, World War II, Korea, the Vietnam War, the Persian Gulf War and the global war on terrorism. It opened in November 2011 following a three-year private fundraising effort that included the sale of thousands of engraved brick pavers.

Dryer, 29, was an executive assistant for Big Spring Partners before leaving the organization.

 

For the full story, click here or visit  http://blog.al.com/breaking/2012/12/former_big_spring_partners_emp.html

FORMER ARTS CENTER EMPLOYEE ACCUSED OF STEALING OVER 1 MILLION DOLLARS

Woodruff Arts Center officials said Tuesday that a former employee submitted $1.438 million in fraudulent invoices over the last five years.

They didn’t find out about it until the unnamed “mid-level” administrator, employed since 2004, left the center at the end of October for reasons unrelated to the alleged embezzlement, said Woodruff President and CEO Virginia Hepner.

A few days after his departure, some “suspicious” invoices were brought to Hepner’s attention and an internal investigation was conducted. It quickly became apparent that the departed administrator had bilked the arts center out of a substantial amount of money, officials said at a Tuesday morning news conference.

“This individual was able to find a weakness in our interior controls,” said Woodruff Board Chair Larry Gellerstedt. “No one here knew any of this was going on.”

According to Hepner, the alleged thief acknowledged culpability when confronted with evidence uncovered by the arts center’s internal investigation.

The suspect has not been charged but Hepner said she has alerted the U.S. Attorney’s Office and plans to share findings with prosecutors….Continued

 

For the full story, please visit: http://www.ajc.com/news/news/local/employee-accused-of-stealing-more-than-14-million-/nTGdM/