Contact Information [more...]

Contact: Allison Pierce, Media Contact 517-373-8060
Agency: Attorney General

June 1, 2005

LANSING, MI - Attorney General Mike Cox announced today the results of two studies conducted by his office that reveal almost 10% of the employees caring for Michigan's vulnerable adults have criminal backgrounds that include homicide, criminal sexual conduct, weapon charges, and drug offenses. The findings come three years after Michigan's first law requiring criminal background checks of prospective residential care facility employees went into effect.

AARP of Michigan's Associate State Director of Government Affairs Bill Knox joined Cox in unveiling a new initiative to address the problems raised in the Attorney General's report.

"Many of us have had to face the difficult decision of whether or not to place a loved one in a nursing home," said Cox. "In three years, as the first group of 78 million baby boomers begins to retire, the safety of Michigan's nursing homes should be on all of our minds. When we place our loved ones in these facilities, we expect that our family members will receive the highest standard of care. A system that fails to meet those expectations by allowing hundreds of criminals daily contact with residents must be changed and I am committed to changing it."

"AARP has 1.5 million members in Michigan, many of whom are among the state's vulnerable adults living in residential facilities," said Knox. "The Attorney General's report exposes major flaws in Michigan's current laws and we agree they need to be strengthened to provide our members with the protection they deserve."

Cox commissioned the studies to evaluate the effectiveness of Michigan's statutes in response to a disturbing series of cases uncovered by his Health Care Fraud Division. The division, which investigates and prosecutes Medicaid provider fraud and residential care facility abuse and neglect, uncovered that 43% of individuals and 25% of employees charged for crimes against residents in the past three years had past criminal convictions.

The results of the two studies completed in 2005 were equally disturbing. The first reviewed the criminal backgrounds of a statewide sample of Michigan's 40,000 Certified Nurse's Aides (CNAs), the single-largest group of certified workers providing direct care to residents. Of the more than 5,500 CNAs studied, 9% had a total of 836 outstanding criminal warrants and 3%, or 170, had past criminal convictions.

The second study checked the backgrounds of entire employee populations - from CNAs to administrators - at four nursing homes in different regions across Michigan. A total of 618 employees were checked and 58, or more than 9%, had 101 outstanding warrants; 68, or 11%, of the staff had past criminal convictions.

In both studies, the criminal histories included homicides, armed robberies, criminal sexual conduct, weapons violations, drug charges, and retail fraud.

"The owners, operators, and employees of Michigan's almost 5,000 residential care facilities are the people we entrust to care for Michigan's most vulnerable citizens," said Cox. "When one out of ten of these employees have serious criminal histories, it is clear that we need to do more to protect Michigan seniors."

On Friday, Cox notified each of the State's approximately 5,000 residential care facilities of the report's findings and submitted a comprehensive proposal to the Legislature that would enhance Michigan's criminal background statutes. In addition, the Health Care Fraud Division has requested information from facilities regarding employees with criminal histories.

"It is only through our combined efforts that we can reform the system and effectively achieve the level of protection Michigan's most vulnerable citizens deserve and that we all expect," said Cox.

The Attorney General's Health Care Fraud Division is one of 49 federally certified Medicaid Fraud Control Units. Medicaid fraud investigations and prosecutions include false billings, unlawful delivery of controlled substances, practicing medicine without a license, kickbacks, and bribery schemes. Abuse and neglect investigations and prosecutions include physical assault, criminal sexual conduct, identity theft, theft of residents' property and funds, and harmful neglect in Michigan residential care facilities. The division also initiates civil actions, including asset forfeiture and claims for Medicaid overpayments.

In conducting its activities, the division works closely with other agencies such as the Federal Bureau of Investigation, Drug Enforcement Administration, Department of Justice, Michigan State Police, state regulatory agencies, local law enforcement agencies, and private health insurance companies.

To report Medicaid provider fraud or identity theft/patient abuse in a resident care facility, call the Attorney General's 24-hour Hotline at 800 24-ABUSE (800-242-2873);e-mail hcf@michigan.gov; or visit the Attorney General's Web site at www.michigan.gov/ag.

Employers received good news last month when the Equal Employment Opportunity Commission reported a broad decline in discrimination claims. The EEOC said claims declined 5.9% from 84,442 in fiscal year 2002 to 79,432 in fiscal year 2004. Racial discrimination and national origin claims declined 7.5%, religious discrimination claims declined 4.9%, and sex discrimination claims 5% over the same two-year period. Only retaliation charges did not decline.

Other federal administrative agencies experienced declines as well. Total case intake by the National Labor Relations Board declined 11.3%. Unfair labor practice claims dropped 10.9% over the same two-year period, while 13.5% fewer representation petitions were filed with the Board's regional offices.

Why the sudden decline in employee complaints? One reason might be the tight job market during the reporting period.

"History suggests that employees tend to complain less and behave better when jobs are scarce," said Robert Samuel, Executive Vice President of Credential Check Corporation. "When the job market is favorable, offended employees are more likely to voice their grievances and pursue their offenders at the risk of loosing their jobs."

The EEOC's mediation program collected $112,400,000 in benefits for individual employees during the 2004 fiscal year.

The national debate about illegal immigration has focused on the possibility that terrorists might sneak across our borders undetected. Yet the biggest threat from illegals passing over our borders is disease, not terrorism. The TSA has x-rayed more than 500 million shoes. Thus far, Richard Reid is the only known terrorist who attempted to bomb a plane using a shoe bomb. The TSA also recently banned cigarette lighters on airliners, but only those at the TSA seem to know why. Aren't matches as dangerous as lighters? Since 9-11 the U.S. has spent billions in an effort to keep our nation safer. However, some security experts think the money could be spent more wisely. Here are several unconventional security measures we thought might actually make a difference:

• Require all airline passengers to keep their cell phones on and accessible, even while seated. Rationale: Contrary to popular myth, cell phones do not interfere with an aircraft's avionics. Passengers with easy access to cell phones could alert authorities on the ground with little chance of detection in the event of a hijacking.
• Require all illegal citizens to have driver's licenses. Immediately deport those caught driving without one. Rationale: For most illegal aliens this would be the only form of registration. In the event one needs to be found, we would at least have a photo, fingerprint, and an address. The practice would increase state revenues and likely inspire some of these drivers to also obtain insurance. California alone would likely yield 3.5 million more licensed drivers and $100-200 million to its coffers.
• Coincide the expiration of driver's licenses with that of visas. Rationale: Visas typically expire before driver's licenses. If both expired on the same date, those overstaying a visa would be easier to identify and apprehend.
• Eliminate the removal of shoes at security checkpoints at airports. Rationale: The inspection of shoes has not improved security. It wastes time and resources. Moreover, shoe inspections are a distraction for both passengers and security personnel. Eliminating shoe inspections would speed up security lines and free up security personnel to do more important things…like inspect more checked bags.
• Keep public records open but increase recording and access fees, and fingerprint anyone who accesses them. Rationale: Public records help keep a free society free. The technology of taking a single fingerprint at public record access points is inexpensive and widely accessible. The cost of such technology would be offset by recording and access fees. In the event of an incident, investigators would then at least have a fingerprint of the person who accessed the record in question. The idea could be enhanced by recording drivers' license information at the time the fingerprint is taken.

According to the U.S. Bureau of Labor Statistics' 2004 annual survey, the economy added 1.2 million new jobs. However, union membership fell by 304,000. The loss reduced the percentage of American unionized workers to 12.5%, an all-time low. Union membership has steadily declined from 20.1% in 1983 when BLS began its surveys. While public sector workers make up 36.4% of all unionized employees, their numbers are declining as well.

Since 1991, the U.S. economy has added approximately 20 million jobs. From 2001 to 2004, approximately 440,000 private sector jobs were created. During the same period, organized labor lost one million members.

The states with the highest percentage of union members in 2004:

New York	25.3%
Hawaii	23.7
Michigan	21.6
Alaska	20.1
New Jersey	19.8

The five states with the smallest percentage of union members in 2004:

North Carolina	2.7%
South Carolina	3.0
Arkansas	4.8
Mississippi	4.8
Texas	5.0

The AARP has more members than all of the U.S. unions combined.

Employers who ask terminated employees to sign claims release forms in exchange for severance pay should use extra caution. The common practice of asking for such releases has received little scrutiny until last month. The 8th U.S. Circuit Court of Appeal rendered a decision on May 3rd that says the language of claims release forms should be written in language a layperson can understand.

"This decision underlines the important to draft waiver agreements that are easily understood," said Tim Whiting, Director of Applicant Screening for Credential Check Corporation. "Complicated waivers filled with legal jargon have a higher rate of not being signed possibly being annulled."

IBM has reason to be concerned. According to a quote in a Crain Communications Inc. publication, an attorney representing several hundred IBM employees in a similar case in California, IBM has used a form substantially similar to the one invalidated in the Thomforde decision in roughly 20,000 prior discharges.

The latest threat to computer users does not destroy data or steal passwords-instead, important files are locked-up and held for ransom. The scheme starts with a virus uploaded to the victim's computer. The virus locks .doc, .xls and .jpg files using a widely available encryption script. The cyber-villain who controls the encryption key then demands a ransom to unlock the files. According to a report from The Associated Press, Symantec, a large security software developer, the threat is very serious but not yet widespread. The FBI fears that criminals will perfect this technology and soon attack businesses. Said one security expert, "Why take your neighbor's data hostage for $200 when you can extort a ransom of $1 million from General Motors?"

Computer security experts report they have identified a new Internet worm which disables antivirus protections and installs software which enables hackers to control the victim's computer. The new worm, dubbed Glieder, is believed to be a variant of the Bagle family of worms. It adds the victim's computer to underground robot networks known as botnets. The worm is capable of networking hundreds or even thousands of computers and remotely controlling them in order to send spam, steal personal information, or gain control of more computers. Experts consider botnets to be a growing and substantial threat to the Internet. The new Glieder worm commodores the victim's address book to distribute itself. Once installed, it downloads a Trojan that blocks antivirus software updates as well as Microsoft's routine system updates. A second Trojan enables hackers to take over the victim's computer and use it to send spam or steal personal information. Best Advice: Manually update anti-spam software and ensure firewalls are working properly. An audit of one randomly selected corporate network, uncovered 52 open and unprotected ports.

That italicized three- or four-digit number on the back of nearly every credit card is more than window dressing. The card verification number or CVN, permits retailers to authenticate the card and thwarts the distribution of stolen card numbers. In many instances, a transaction will not be approved without this number and proper authentication.

"By not embossing the CVN and putting it on the back of the card, both sides of the card must be accessible to would-be thieves," said George Patak, Risk Management Consultant for Credential Check Corporation. "This prevents the use of cards which have been photocopied or have had their numbers copied."

After 9-11, Robert C. Bonner, head of U.S. Customs and Border Protection, introduced two aggressive initiatives designed to inspect or secure containers before they arrived in U.S. ports. The programs-the Container Security Initiative (CSI) and the Customs Trade Partnership Against Terrorism (CT-PAT)-were aimed at preventing terrorists from smuggling weapons of mass destruction (or their operatives) into containers bound for the U.S. However, congressional investigators report the programs are flawed. Congressional staff have recently visited CSI ports and found both programs lack standards, oversight and consistent verification practices. The report issued by GAO, released last month was critical also of the inconsistent application of the technologies used to detect hidden weapons. In two separate incidents this year, Chinese immigrants arrived at the Port of Long Beach, California in containers shipped by CT-PAT members.

The GAO's report on port security revealed that 28% of the containers U.S. Customs identified as high risk were not inspected before they left the country of origin and arrived in U.S. ports.

Security experts agree that it is only a matter of time before criminals figure out ways to find and exploit security holes in Check 21's new check processing technology. In the meantime, consumers can do more to protect themselves. Here's what we recommend:

• Never make checks payable to Cash.
• Order your checks from your bank. Mail-order checks are often less expensive but typically are easier to alter than bank checks.
• Protect deposit slips. A common scam is to deposit worthless checks into your account and get some of the deposit back as cash.
• Review all deposited checks and ensure they are still made out to and endorsed by the original intended party.
• Protect your signature. Use your real signature for checks and important documents; use another for forms, questionnaires and other routine documents.
• Report suspicious transactions to your bank immediately. The sooner the bank is aware of a problem, the sooner it can investigate it and take corrective action.

If you are interested in obtaining additional information about these articles or the services offered by Credential Check Corporation, please contact one of the following individuals:

Michael A. Pachuta President		888-689-2000 michael.pachuta@credentialcheck.com
Robert H. Samuel Executive Vice President		888-689-2000 robert.samuel@credentialcheck.com
George M. Patak Risk Management Consultant		248-526-5209 george.patak@credentialcheck.com
Timothy D. Whiting Director of Applicant Screening		248-526-5213 timothy.whiting@credentialcheck.com

Thank you! We'll see you next month!