Fantastic Beasts of the Background Check World: the "national criminal search"


Every investigator gets phone calls like this. The tone excited, the tenor demanding. How can you, sir, charge so much money for a background check when other firms offer "national criminal record checks" for $24.95?

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Our response is: Do you want to buy a griffin? A hippogriff (half-horse, half-eagle, 100% fantasy)? Time to review Fantastic Beasts of the background check world.

The national criminal check is a myth. What constitutes a “national criminal check” or “nationwide employment criminal background” as the product is often described? Usually, the firm offering this search is checking a compilation of conviction data--people who actually were sentenced to prison. However, only a very small percentage of people charged with crimes ever do any prison time. National offender databases are misleading: they miss charges that have been pled out, dismissed, not prosecuted (nolle prosequi, the legal term of art meaning the prosecutor is unwilling for some reason to pursue the case).

How do you actually check for Criminal Records?

Everyone is familiar with scenes from movies where a law enforcement agent runs a quick database check and gets an entire criminal history in seconds. In real life, things tend to be a bit more convoluted.

One database used by law enforcement is the National Crime Information Center (NCIC) and it is
typically limited only to law enforcement. While the closest thing to a national criminal records database, even NCIC data is riddled with gaps, with as many as 50% of all criminal cases failing to hit the database. So how do you proceed to check a person for crimes committed across 50 states in the USA?

Convictions data is a start but we always go back to the primary sources of criminal records: the state court system. On the state side, this means searching a higher court (Superior Court) that handles major crimes in a particular county, as well as lower courts with more limited jurisdiction. These courts are called district courts or municipal courts. Don’t make the mistake of skipping this step as district courts can hear cases involving serious criminal matters; for example in Massachusetts, some felony cases are found in district court. And access to the dockets still remains mixed: Massachusetts still keeps criminal records off the internet; you need to look at the index in the court.

And on the federal side, you will be checking for criminal cases in the national PACER system.

So just beware when you are conducting a criminal background check for employment or any other purpose: to do it right, the investigator may need to leave the office and review records ((paper or database) at the courthouse. Be certain that you are buying more than the fantastic beast of a "national criminal check" which is usually just convictions data.

Background Check Myths - The National Criminal Check

Every investigator gets phone calls from this person. The tone excited, the tenor demanding. How can you, dear sir, charge so much when other firms offer "national criminal record checks" for $24.95?

Time to review Fantastic Beasts of Background Myths: what constitutes a “national criminal check” or “nationwide criminal background check” as the product is often described.

The national criminal check is the hippogriff of the industry, a complete myth. Usually, the firm offering this search is checking a compilation of conviction data--people who actually were sentenced to prison. However, only a very small percentage of people charged with crimes ever do any prison time. National offender databases are misleading: they miss charges that have been pled out, dismissed, not prosecuted (Nolle prosequ, the legal term of art meaning the prosecutor is unwilling to pursue the case).

Everyone is familiar with scenes from movies where a law enforcement agent runs a quick database check and gets an entire criminal history in seconds. In real life, things tend to be a bit more convoluted.

One database used by law enforcement is the National Crime Information Center (NCIC) and it is typically limited only to law enforcement. And even NCIC data is riddled with gaps, with as many as 50% of all criminal cases failing to hit the database. So how do you proceed to check a person for crimes committed across 50 states in the USA?

Convictions data is a start but we always go back to the primary sources of criminal records: the state court system. On the state side, this means searching a higher court (Superior Court) that handles major crimes in a particular county, as well as lower courts with more limited jurisdiction. These courts are called district courts or municipal courts. Don’t make the mistake of skipping this step as district courts can hear cases involving serious criminal matters; for example in Massachusetts, some felony cases are found in district court.

And on the federal side, you will be checking for criminal cases in the national PACER system.

So just beware when you are scanning someone for a criminal history: to do it right, the investigator will probably need to leave the office and pull some paper records. A thorough investigation will take more than just a database search.

Misguided CORI reform

Massachusetts today unveiled its new iCORI system for criminal background data. According to the Boston Globe, some community groups want to cut off access to this data, citing problems with investigators who go to courthouses and obtain original records with additional information about the crimes.

These groups are attacking the very procedures recommended under federal law and by industry experts to avoid mistakes in background checks. In effect they want to ban users of iCORi who search out original documents. In effect, they want to forced employers to act on a dry sparse records for fear that, say details about, say a habitual offender who seems to prey on women, should come to light.

Governor Patrick signs CORI Reform

The new Criminal Offender Record Information law (CORI) prohibits employers from asking on an “initial written application form” about an applicant’s “criminal offender record information,” which includes information about criminal charges, arrests, and incarcerations. The term “initial written application" in the new text may allow employers to continue to question applicants about felony and certain misdemeanor convictions later in the process. Moreover, the law does not address classic court docket research conducted by investigators.

Lack of due diligence in Massachusetts Ponzi scheme

The numerous Ponzi schemes unearthed in 2009 highlight the point that some very sophisticated investors skipped basic steps in conducting due diligence. Lawyer Jay L. Fialkow and his partner, Jeffrey P. Ross, a Boston businessman, are facing civil charged filed by Massachusetts Secretary of State for failing to register as dealers-dealers or investment advisors while referring clients to Richard L. Elkinson, who the SEC has charged with running a Ponzi scheme. The SEC complaint alleges that Elkinson, of Framingham, Massachusetts, lured 130 investors to invest $28 million with him through his d/b/a Northeast Sales. Ross and Fialkow allegedly referred clients to Elkinson (they dispute that charge, and claim they merely introduced clients to Elkinson). Ross and Fialkow earned $319,000 in commissions from Elkinson, according to Mass SOS filings.

The Boston Globe highlights red flags: "In 1992 Elkinson declared bankruptcy, and court filings reflected a man with virtually no assets, and just $600 in a bank account. When Fialkow and Ross visited Elkinson at his office, they found a sloppy desk in a bedroom of his Framingham home, with a computer and a few papers that looked like contracts. Elkinson would call Ross and Fialkow’s office daily, asking if they had raised new money for him. The pair never received tax forms from Elkinson reporting their investment gains, as required by law, according to regulators. And a cursory check of public filings would have revealed that Elkinson never submitted incorporation papers for his company, Northeast Sales."

A Jan. 2006 letter to a CPA firm from the RossFialkow firm noted that Elkinson had earned 9-13% per contract, which ran 6 to 10 months--a tidy rate of return that sounds too good to be true.


Sealing federal records

Reporter Michael Doyle did a nice summary of a year-long study by Tim Reagan and George Cort for the Federal Judicial Center on the practice of sealing federal cases.

Sealing federal records apparently is justified for almost any reason under the sun. Doyle notes the report findings: "There was one (criminal) case sealed because the defendant had a high profile. According to the judge, 'it seemed a good idea at the time.' Another reason for sealing: "A person of influence failed to respect the authority of an officer on federal land." Four civil cases were sealed to protect the reputation of doctors.

FINRA BrokerCheck fixes gaping hole in database.

Our tests show that changes to FINRA's Brokercheck have finally closed a major loophole in a database long criticized as outdated and difficult to use (previous editions were cumbersome: for example, users were required --in an era when name searches are the norm on almost any database--to specify past employers for a broker before checking their background; otherwise the search did not work).

Some estimate that more than 15,000 individuals who left the securities industry after facing regulatory action did not have their disciplinary history available on BrokerCheck. Those records became available this month. Many of those former brokers returned to the business world in different capacities and, like stock market vampires, found new victims. Repeated scandals in 2009 finally forced the industry to make this necessary change.

How to do a background check in Massachusetts

The big problem facing HR people is balancing costs with coverage. For example, some firms offer a "statewide criminal check" or even "national criminal check". Often times they are simply checking a database of convictions only -- a small universe of people compared to those who are charged. So if your guy has a record of being charged with sexual assaults against women in the workplace, but somehow pled out to misdemeanors or had the cases dismissed, a statewide convictions database would give you no reason to pause.

By searching the lower district courts for any cases filed, your background due diligence would allow you to find the cases and make your own evaluation. This is especially true in certain states such as Massachusetts, where the lower courts hear some felony cases, assaults, and various other serious crimes.

Equifax stops selling credit reports for employment background checks

Although allowed under the Fair Credit Reporting Act, Equifax has stopped selling credit reports for employment background checks.
Use of credit reports by employers has become more controversial as many people have been hammered in this poor economy and otherwise reliable employees are thrown into credit difficulty by layoffs, mounting bills, mortgage defaults. etc.