Hiring Fraud


Hiring Fraud?

Yes, there certainly is such a thing. Unfortunately, hiring fraud is relatively common, takes many shapes and forms and does indeed have victims. Often, victims suffer a direct loss by not getting the position because someone else fraudulently got it or suffer a loss they do not even and never will realize, or they may suffer in an ancillary way. Quantifying hiring fraud is difficult because understanding exactly how much of this occurs is nearly impossible.

A general and relevant definition of fraud for this article is:

  • a person or thing that deceives and/or intentionally deceive others, typically by unjustifiably making a decision or claiming or being credited with accomplishments or qualities.

A typical case study might look like this: 

A government agency expects to obtain new budget dollars to create a certain position. Long before the government bureaucracy is able to fund and actually create the position, a senior administrator decides that they would like a certain person to have the position — but without any real understanding of that person’s true professional abilities and qualifications, as it relates to the new position. The person is secretly promised the position. The reason for the selection is because the administrator knows and likes the person and wants to hand select the person that will have this job so they can have a person in the position they like and can work with.

(Every jurisdiction has different hiring rules and procedures. This study is a general study and not associated with any particular jurisdiction. However, it should be noted that at the level of the position in question in this study, the administrator may indeed have had the right to simply tap someone’s shoulder and pick them for the position without any process at all. However, the politics of doing so often involves internal and external politics, causes great nuisances and problems for government entities. So, fake competitive processes are used to give the appearance of fairness. This fraudulent process enables the hiring agency to choose who they want and not have any push back afterward).

Months later, after the government bureaucracy machine works its way through the red tape, the position is created and low and behold — it is advertised as and open and “competitive process” incredulously even after secret discussions had been had long ago with the person who ultimately gets the job. There are many reasons to create a real competitive process, but remember in the this case, the person who the top administrator wants for the position has already been promised the slot. So, in this study, the phony process is made to look competitive and fair but it really isn’t. This permits the government officials to select the person they want in advance but make the outcome appear fair.

The government agency sets up an elaborate process — it takes staff time to develop, administer and review. Advertising occurs and remember again that all this goes on while that the person who gets the job has already been promised the job months before — the process includes a resume review, and multiple interviews. Nearly 50 people apply for the job. Many of the applicants have extensive experience directly related to the position and in fact, have held almost identical positions in other government agencies. One applicant has had direct experience with the new position for nearly 10 years — having previously handled many of the duties that the new position will assume. But none of these applicants gets the job – it goes to the lesser qualified hand picked person.

So what’s the harm?

Applicant Property Loss (Employment) – Many of the applicants notify their employers they are seeking another position. Two are terminated from their current employment – yes, this is a risk they take when they seek other employment. But again remember that these applicants believe they have a good shot at the position — after all, it is a fair and competitive process.

Applicant Deception – In this study, the government lied to its citizens. Citizen applicants were advised they were going to participate in a fair and objective process and the successful applicant would be chosen based on criteria that is relevant to experience and skill. Little did the applicants know the job was filled before they applied. The applicants spent hours researching the job, purchasing books to study with, took off time from work and away from their families to prepare and spending precious travel time and dollars traveling to interviews — hey, it was worth it after all — they had a fair shot right? Wrong.

Applicants bought new suits and dresses, got their hair done and asked their partners and spouses to sit with them and do mock interview scenarios so they would have the best shot at presenting themselves and their qualifications. They spent money they would have used to take their family out to dinner on gas, tolls and travel. Yet, the entire effort — multiplied many times by all the applicants combined — was in vain. Remember? The position had already been filled.

Later, even the emotions and feelings of these unsuccessful applicants could never be truthfully reconciled. They left the final interview thinking they had a good shot — felt good about themselves and their performance in the process. After they were not selected, they recapped everything they did, examined their past employment and performance and maybe came up with some areas they might improve upon. However, all of this post process self-examination by all of the non-select applicants is completely invalid – their process performance may never be objectively evaluated by anyone. The hiring for this position was done in secret, months in advance and the process was fake. This process was tantamount to a betrayal.

Transparency and Fairness – As citizens in a democracy, is it too much to expect that OUR government agencies will actually conduct OUR business they we have authorized them to do on OUR behalf–  transparently and fairly? When a government agency does not handle OUR business, the people’s business in a fair and transparent manner – someone gains unfairly and other people are harmed unfairly. Fairness is a foundation principle of democracy in the context of reward in the form of employment.

Honesty and Fraud –  A basic tenant of fraud is the use of lies and/or deception. Clearly, the study above is full of both. The process was fake and the outcome was not legitimate because an under qualified person was selected and the results were predetermined. Once the job was offered to the person before it was even created, everything afterward was a lie and deception. When citizens are deceived by a government agency, they suffer a loss — in many tangible and not so tangible ways.

General Property Loss and Economic Harm – In the study, someone gained employment. This is a fraudulent employment windfall for the person pre-selected. The other applicants, a number of whom would probably have attained the position in a fair, truthful and objective process all suffer property loss because they may have been selected for the position if the process was again fair and objective. Fraud prevented other, far more deserving applicants from having a fair shot and ultimately obtaining the position.

Position Incompetence and The Cost of Cronyism – What is the cost of this concept!? Who knows!? When a person is selected for a government position and is unskilled, does not possess the necessary experience and qualifications and is truly inadequate for the position, they harm the public they are serving and do a great disservice. Inefficiency results in extra training that may be required, other employees having to take up slack, incorrect and costly decisions occurring — inefficiency costs dollars — dollars that are being provided by citizens — so who pays? Citizens do. Twice. We pay extra for what should be a lot less expensive and far more efficient delivery of services. An entire book could be written about the economic impact of cronyism in the context of hiring practices.

This case study outlines a fraudulent government hiring process. If you, the reader, takes an opportunity to consider the entire negative impact of hiring fraud – whether public sector or private sector – you will develop a very large list of serious impacts this deceptive practice has on individuals and on society. Unfortunately, the old saying “its not what you know its who you know” unfairly manifests itself in a fraudulent hiring practice scenario. “Who you know” may certainly be used legitimately to one’s advantage on many, many an occasion – but it simply has no place in a fraudulent hiring process.

Every citizen who values fairness, government transparency and the truth and  experiences or has knowledge of hiring fraud should make reasonable attempts to expose and correct the situation. I hope this article assist the reader to identify and  understand this type of fraud when they see it.

The author, Tom Santaguida, is the owner of Dirigo Investigations, a Brunswick, Maine based  investigations company. He spent 20 years working for government agencies, 10 years of which he was a top administrator. He is a member of the Association of Certified Fraud Examiners. Tom may be reached at tom@dirigois.com



2 replies
  1. Brent Maggard
    Brent Maggard says:

    I work for a public utility in Washington State. I have fallen victim to a situation of hiring fraud. When I read your article it was exactly what I have just experienced. Do you have any suggestions or any attorneys that may help me with this? I am also a union member and my local president is involved. I have already filed against him with the union.

    Thank you for your article, it’s nice to know I’m not alone.

    Brent Maggard

    • tom@dirigois.com
      tom@dirigois.com says:

      Hi Brent:

      Thank you for your message and I am sorry to hear about your troubles. These situations can be very challenging and take a while to be resolved. The fact that you are a member of an association or union that represents employees is an automatic plus. However, if a union officer at a high level is involved, I strongly recommend that you seek the services of a employee rights attorney. Attorneys, just like many other professions, have areas of specialization. You would no more hire a heart doctor to conduct brain surgery than you should hire lets say a divorce attorney to handle an employee rights case.

      I suggest try 2 things: 1) you Google employee rights attorneys and include your area/region 2) contact the Washington State Bar Association. Explain that you believe you were denied employment/promotion and that there is collusion with the local President and you seek legal counsel for a remedy. I’m sure they will be able to connect you.

      The problem in so many of our systems and organizations today is that the “who you know” syndrome is so prevalent that a large percentage of the population finds it an acceptable practice for folks to use relationships rather than merit for hiring and promotion. Even though these tainted processes are nothing more than fraud and corruption, there is a large segment of people that are desensitized to this and do not respond accordingly when issues are raised.

      An employee focused attorney will take my position and yours and try to help you.

      Exposure of the corruption is important. You not only have to remedy your personal situation, you have to fix the system. Depending on legal advice, timing and your own predicament you may want to consider going to the press at some point. Another idea is to bring much light to this scenario inside the union organization. Unions do not like bad press.

      Keep your voice, stay calm through the process of challenging these folks and stand up for what you believe is right, truthful and fair.

      Best regards and feel free to contact me at any time if you have additional questions.

      Thank you again for your message.

      Tom Santaguida, President/Senior Investigator
      Dirigo Investigations


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