Background check is as useful in screening a top ranking executive as it is for verifying the past credentials of a suitable matrimonial match. Background screening becomes an effective process when efficiency and thoroughness is applied to the verification aspects like identity, accessibility, criminality and fitment. For more information visit www.authbridge.com

1. Background verification is as useful in screening a
top ranking executive as it is for verifying the past
credentials of a suitable matrimonial match. Background
check becomes an effective process when efficiency and
thoroughness is applied to the verification aspects like
identity, accessibility, criminality and fitment.
With RBI taking step to tackle consumer protection
concerns and banks trying to address reputational risks,
screening practises are gaining in increasing importance.
The central regulator has penalized 22 banks for
violating customer identification requirements and,
issued draft guidelines for tightening rules on wealth
management services as well as reiterated the need for
Unique Customer Identification Code.
With the size of corporate frauds and top executives’
compensation both increasing, one is left to wonder as
to whether there is any way to ensure integrity of the
employees.
Thisissuehasalsolookedattheverificationrequirements
of individual customers, especially the ones looking
for matrimonial alliances. From a Mumbai based man
slashing his ex-wife 100 times, to a single mother being
cheatedthroughamatrimonialportal,oneisfloodedwith
such news regularly. Awareness begets proactiveness
and we aim to provide solutions to our customers to stay
as safe as possible from the unscrupulous .
Monthly Newsletter
Volume VIII Issue 5
Editorial
Content
1. News
2. Legal Update
3. A Point to Ponder
4. Screening Trends
5. Best Practices in Screening
6. Case Studies
7. Products and Services

2. Stirrings within the Nation
RBI Penalizes 22 Banks for Violating KYC Guidelines
The Reserve Bank of India has imposed penalties on 22 lenders including Punjab National Bank and State Bank
of India. In probably one of the biggest penalization in the industry, the banks have been penalized for violating
requirements on customer identification. The apex bank found non-adherence to norms at these banks during a
scrutiny of their books of accounts as well as internal control and compliance systems in April 2013.
The money laundering charges levelled by online portal Cobrapost.com, initially against ICICI Bank, Axis Bank and
HDFC Bank and extended to many later, had prompted the central bank to investigate practices at banks.
“After considering the facts of each case and individual bank’s reply, personal submissions, information submitted
and documents furnished, the Reserve Bank came to the conclusion that some of the violations were substantiated
and warranted imposition of monetary penalty,” it said in a statement.
The central bank found flaws in banks’ KYC practice for walk-in customers, customer identification procedure and
sale of third party products such as insurance and mutual funds. Lapses in following instructions on import of gold
consignments and in monitoring of dormant accounts’ transactions were also discovered. Based on the findings,
RBI issued show-cause notices to these banks before imposing penalties ranging from Rs 0.50 crore to Rs 3 crore.
Man Kidnaps and Tortures Ex-wife Brutally; Held
Bazzu Uzaman Akbar Badshah alias Suka alias Pasha (23), a resident of Adamjee Jivajee Chawl in Sewri, has been
caught by Mumbai police on the complaint of his ex-wife, Sarita Sharma (name changed) who escaped his torturous
captivity. Pasha had befriended Sarita on Facebook and after a short courtship both got married at the Bandra
family court.
Soon, she felt the first tremors in the relationship when he started tormenting her over her religion. Her suspicions
of having been cheated were confirmed when she discovered that his claims of owning an import-export business
were elaborate fabrications. He had also lied about being a graduate, having dropped out of school in Std IX. Pasha’s
menacing behaviour was soon extended to Sarita’s family, whom he started threatening and abusing.
A traumatised Sarita finally lodged her first non-cognisable complaint in Mulund police station. This was followed
by a divorce. Due to his continuous abusive ways, she filed a second complaint.
Pasha had also started making desperate attempts to meet her which were repeatedly turned down. To take revenge,
Pasha ambushed her and took her to his residence in Sewri, where he held the girl captive for days. For nine days,
Pasha rained kicks, punches and slashed her with a razor blade about 100 times.
Finally, an FIR was registered against him and he was arrested and charged under 9 sections of the IPC. During
interrogations, Pasha confessed that his father is an accused in the 1993 Mumbai blast case. A history sheeter, 16
criminal cases have been registered against him in the past, 13 of them in the RAK Marg police station. Police have
recovered three weapons from him. He was in the ‘business’ of lending money.
News
1
Continued...

3. 2
Global Ripples
Burlington County Manufacturing Companies’ Ex-CEO Charged for Money Laundering
Michael Geiger, former CEO of two Burlington Township manufacturing companies, pleaded guilty to first-degree
money laundering after being charged with stealing more than $2.3 million from the businesses. The two compa-
nies headed by Geiger during the span of 2004-09 were American Casein Co. and American Custom Drying Co.
From 2006 through 2009, Geiger had the firms pay about $335,000 in bills for work performed by nine contrac-
tors or vendors at his home, with $221,186 stolen from the businesses to buy a condominium in Fort Pierce. He
directed Henley, president of one the suppliers for the two firms, to submit phony invoices. Similarly, the next
year, in October 2009, Geiger stole $192,113 from the two companies to buy a vacation home in Cape May for
which he again took help of Henley.
In November 2009, a month before he was terminated as CEO, Geiger had two checks issued to himself from the
firms for a total of $734,220 in severance pay, even though the maximum allowed severance pay under his em-
ployment contract was $300,000. Geiger also stole $1.4 million in unemployment insurance benefits by directing
employees to underreport their hours and wages in applications to the state Department of Labor so they could
collect benefits. In November 2008, he implemented a rolling layoff program in which employees were laid off for
one week per month.
Fannie Mae VP fired, Executive Arrested Amid Kickback Controversy
Home-finance giant Fannie Mae has fired James Tiegen, a vice president who oversaw Irvine and other regional
offices where foreclosed properties are sold, amid a federal investigation into alleged kickbacks from real estate
brokers. Also police have caught a former disclosure specialist Armando Granillo who was clutching 11,200 in
cash at the time of arrest. Allegedly, it was the money he demanded in return for providing foreclosure listings to a
broker, who alerted federal authorities.
An affidavit filed in federal court said Granillo had told the broker that kicking back a slice of commissions on
foreclosed properties was “a natural part of business” at Fannie Mae. In fact, most of the employees were aware of
such activities way before the management got the whiff of it.
RBI Proposes More Stringency on Wealth Management Services
The Reserve Bank of India (RBI) has issued draft guidelines for tightening rules on wealth management services
offered by commercial banks in the wake of allegations regarding the violation of money laundering and know-
your-customer (KYC) norms. The draft has proposed that banks should offer such services only through a separate
subsidiary or through a “separately identifiable department or division” (SIDD) set up for the purpose. This would
essentially help in avoiding conflict of interest and in ring-fencing the main business from any possible risk posed
by such activities. In addition, banks would need the prior approval of RBI before undertaking wealth management
services whether through a subsidiary or an SIDD.
The central bank noted that the mis-selling of products has raised serious consumer protection issues in the banking
sector and exposed banks to reputational risks. However, according to experts, if the guidelines are accepted in their
entirety, it could impact the wealth management operations of some banks. Presently, many of the banks offer such
services through branches and not subsidiaries.
Legal Update
Continued...

4. A Point to Ponder
The Worth of High Executive Compensation
’The average size of frauds since 2009 is R 502 crores, an increase of almost 80% from the average of the past 15 years
which was R 381 crores,’’ said the latest study report by Thought Arbitrage Research Institute (TARI), in partnership
with UN Global Compact India.
Corporate frauds in India have increased in the last 15 years in terms of both size and scale of the fraud. More than 50%
of frauds are related to defrauding lenders and to siphoning of funds by the promoters or top management.
The significant increase is due to a number of high profile and large frauds detected in the period of 2009-12. A signifi-
cant motivator for the promoters and management to commit fraud is to bring about personal enrichment at the cost of
all other stakeholders.
How do you think can the urge of top executives to use fraudulent means for personal gains be tackled?
Can greater annual compensation do the trick?
Off late, companies are paying more to CEOs’ and top management executives than they used to. According to the re-
search conducted by an executive compensation analysis firm, Equilar Inc., the median 2012 pay package for top man-
agement executives came in at $15.1 million, a rise of 16% from 2011.
Can honesty of corporate heads be assured by any other measure, if not by higher compensation?
3
RBI Asks Banks to Provide ID Codes to All Customers
The Reserve Bank of India (RBI) revised its Know Your Customer (KYC) norms and reiterated the need for the
banks to allot Unique Customer Identification Code (UCIC) to all their customers. RBI had previously asked banks
to issue UCIC in June 2012 but it has now been extended to March 2014.
“Banks should allot UCIC to all their customers while entering into any new relationships for individual customers,”
said RBI in a master circular. “The UCIC will help banks to identify customers, track the facilities availed, monitor
financial transactions in a holistic manner and enable banks to have a better approach to risk profiling of customers,”
it said.

5. A comparison between the employment discrepancy trends over the last three fiscals has been made. A marked increase
has been observed in 2011-12, although it had subsided to 27.66% in 2012-13. The trend clearly shows that more than
a quarter of candidates give false information regarding their employment history. A more detailed analysis of the
discrepancy and reasons for discrepancy will be shared in our annual report.
Screening Trends
4

6. Efficiency and Thoroughness should be applied to the four aspects: Identity, Accessibility, Criminality and Fitment.
Identity
Passport, Pan Card, Driving Licence, Voters ID or Aadhaar are used to verify identity. Most of these are not online
processes and even if they are verification is not ‘in toto’. Online verification validates the document number of these
identity proofs have been issued to the ‘name’ but it does not validate that the ‘person’ in both instances is the same. The
only way that can be achieved is if the data includes the photograph and other key identifiers which are probably used
during issuance of the document but are not part of the issued document.
Verifying these from the issuing authority is of course the other method which is still a challenge in our nation.
Till official verification becomes the preferred mode; you should ensure the next best mode is followed
using at least two of the possible five documents.
Accessibility
Keeping the dynamics of today’s society in mind and migration of the population for education and jobs; verifying
addresses have their own importance.
Permanent Address: The address where either the parents/grandparents of the individual still reside and have
resided for at least since last ten years; when verified should exist, family should be residing and neighbours should be
able to recognise their residence. Once accessibility is confirmed, police verification should be conducted at that address.
Current Address: Current should be that address where the individual has stayed for minimum of last 6 months and
has at least one valid address proof at that address. Address of less than 6 months duration or with no address proof
should be treated as ‘alerts’ to be verified when 6 months is completed or address proof is provided whichever is earlier.
Also in cases where addresses are of less than 6 months stay, the previous address should be confirmed and police
verification at that address conducted.
Criminality
Through Media: Media searches can reveal if the criminal act was newsworthy in sources with large reader base.
Limited circulation sources maybe difficult to research on.
Through Databases: Staying cognisant of the ‘exclusions’ as these will only carry judgements or records of ‘cases
in hearing’; these searches are quicker than verification through police. Conducted across courts and data sources this
needs elimination to ensure accurate name match to the right person.
Through Police Records: For FIRs and complaints; police is the only authority and this takes time but patience is
well worth it.
Conducting all three for highly sensitive roles and two of the three for less sensitive roles will ensure
the risk is covered largely.
Fitment
With HR: With more and more organisations opening to the idea of sharing exited employees’ data with repositories;
verifications should in future become real-time. Till such time insistence of verification through HR followed by the
reporting manager is the most efficient mode.
With Reporting Managers: Ensuring the reporting manager was in fact the reporting manager of the candidate in
the particular employment and responses are in sync with HR responses is best.
With Education Authorities: Education results repository is the future of education verification. Till such time,
education and professional qualifications should be verified from the issuing authorities especially for roles where
education qualification or professional expertise is the key criterion.
Best Practices in Screening
5

7. A Miss in Selection of Match on Matrimonial Portal
5 July 2013. Delhi Police have registered an FIR against Yuvraj Singhania for cheating a single mother of money by
posing as an airlines pilot on a matrimonial agency. The single mother had registered herself on matrimonial portal
through which Yuvraj alias Gaurav Singhania contacted her. Singhania posed as a divorcee and claimed to be working
as a pilot with British Airways.
First trapping her with false marriage promises and assurance of taking her child’s responsibility, Yuvraj then started
to demand money, the total of which stands at Rs. 60,000. Later it was realized that Yuvraj is a habitual cheater who
targets women with kids through websites.
Are you taking the profiles on matrimonial portals on face value?
Is the matrimonial alliance made this time an informed decision?
Matrimonial portals lack strict controls on the authenticity of registrations and matrimonial profiles. This brings the
onus of careful selection on the users themselves.
Decision pertaining to re-marriage is expected to be wiser and a more rational call. However, eluding the practice of
matrimonial verification is a folly which makes the individual looking for an alliance more vulnerable to frauds and
eventual revelations.
Check into a prospective match’s background reveals facts about his/her employment or business, education, address,
family background, existence of criminal history, etc. Matrimonial verification also checks for the authenticity of stated
facts so that the alliance is made wisely once all the facts are on the table.
Former President Arrested for Furthering Personal Interests by Fraudulent Means
18 June 2013. Former TigerDirect president, Carl Fiorentino, has been taken into custody for engaging in money
laundering, wire fraud and mail fraud. Fiorentino, who handled the responsibility of selecting suppliers for receiving
computer peripherals, components, and other related products, defrauded Systemax Inc. as well as its subsidiary
TigerDirect.
Allegedly, Fiorentino received bribes of $6.5 million and $570,000 from a Taiwan-based firm and a California-based
company, respectively, for steering TigerDirect’s business to that firm by purchasing their supplies. The kickbacks were
sent through cheques and wire transfers in favour of third party individuals and entities handled by Fiorentino.
Misuse of a coveted position entrusted to an executive for furthering the business interests of the organization.
A leader is accountable for efficient utilization of organizational resources in order to steer the company towards its
objective. And, for hiring an accountable leader calls for an even more accountable and robust hiring process. Background
verification, as part of the hiring process, mitigates the risk of making a bad executive hire to a large extent. Verification
process before taking the hiring decision ensures that a company does not end up hiring a Fiorentino.
Furthermore, periodic background check keeps a company informed about any relevant updates in a senior executive’s
background as well as about any influential or questionable affiliations developed by him/her during the employment
tenure.
Verification at various stages of employment complemented with other corporate controls can ensure that cogs of a
corporate mechanism are working in tandem towards the attainment of organizational goals.
Case Study
6

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Plot No. 123, II Floor, Udyog Vihar, Phase IV – Gurgaon – 122 016 , Haryana, India
Sales Enquiries: E-mail: sales@authbridge.com Tel: +91 – 8826988001
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