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Fired, charged and still working

An ex-Jabil executive has agreed to plead guilty to wire fraud, but flaws in hiring practices let him find other finance jobs.

By SCOTT BARANCIK
Published July 13, 2006

It wouldn't look very good on a resume: "Stole $1.8-million from prior employer by abusing check-writing authority."

Patrick Henry Stewart has carried that legacy to job interviews ever since Jabil Circuit Inc. fired him last year for allegedly falsifying more than 120 company checks. Stewart, 42, used the money to buy goods such as cars, home improvements and a 2.2-pound bar of gold. He agreed last week to plead guilty to federal wire fraud charges in exchange for the possibility of a reduced sentence.

That tainted record hasn't prevented Stewart from landing work in the finance field. So far this year, according to court documents and Stewart's lawyer, the Tampa resident was fired from one job in March, completed a two-month stint in early June as a temporary controller earning $1,600 per week, and has since found employment yet again.

How could an employer overlook Stewart's crime, which has been the target of civil suits and newspaper articles as far back as September? Simple, said one of the employers, Nashville staffing company Vaco Resources, whose undisclosed client enlisted Stewart as a temporary controller. Despite a policy of performing background checks on all job applicants, Vaco simply didn't know about the fraud allegation until a reporter called for comment last week.

"There wasn't a hole in the process," Vaco founding partner Brian Waller said in an interview. "We went through our due diligence."

It's not an isolated problem. Though the phone book is brimming with screening companies eager to sell facts on prospective employees, skeletons from past jobs can remain safely locked away. Corporate recruiters today face many barriers to the truth, including dishonest applicants, ex-employers who won't speak openly about job candidates for fear of being sued, and companies' reluctance to spend extra money for more thorough background checks.

Information on Stewart's recent job applications is limited. He declined to be interviewed; two of the companies that hired him this year haven't been identified. Meanwhile, representatives from Vaco Resources and Jabil are reluctant to share details, due to confidentiality pacts and other concerns. But it's fairly easy to imagine how Stewart's fraud might have slipped through the cracks.

A criminal-record search would have come up clean. Though prosecutors filed a foreclosure suit in September against Stewart's Hunter's Green home, cars and other assets, they did not file criminal charges until late last month. A 2002 arrest for misdemeanor petty theft had been expunged from his record.

Years ago, a company like Vaco, which has offices in 15 U.S. markets including Tampa, might have learned about Stewart's alleged fraud from an ex-boss at Jabil. But fear of slander lawsuits has rendered employer references, once the centerpiece of applicant vetting, nearly useless. Even a $1.8-million theft may go unmentioned today.

"What we would provide would basically be dates of employment and nothing else," said Jabil spokeswoman Beth Walters, who declined to specifically address Stewart's case. "I talked to one of our (human resources) guys, and he said that's basically the way the world works today. Which I guess means people probably don't bother to make reference calls anymore."

What about reviewing newspaper articles, credit reports or civil lawsuits? Dave Wirta, an executive vice president for employer screening services at St. Petersburg-based First Advantage Corp., said such searches are far less common than criminal-record checks. They cost extra, and recruiters typically request them only for high-paying, high-exposure positions, such as chief executive or others that bear a fiduciary duty.

But staffing companies like Vaco are usually at the mercy of their clients' wishes, Wirta added. Some simply aren't willing to spend a lot up front to mitigate vague risks. Vaco's Waller declined to identify what measures it took to vet Stewart on behalf of an unnamed Tampa Bay area client.

Jeff Miesbauer, a Certified Professional Accountant and a manager at the Tampa office of finance consultant PricewaterhouseCoopers, said he was "flabbergasted" to learn that Stewart was still working in corporate finance, given his alleged fraud. "What, is he all of a sudden seeing the wrong of his ways?" said Miesbauer, whose practice includes fraud prevention. "I'm just a firm believer that that kind of behavior tends to repeat itself."

Stewart's criminal defense lawyer said such concerns are overblown. Kevin Darken, a senior attorney at Tampa's Cohen Jayson & Foster, said Stewart's recent jobs have not involved the level of responsibility he held at Jabil. There, Stewart had authority to write checks of $50,000 or less to vendors without obtaining a second signature.

Besides, Darken said, Stewart has obligations: his family, and Jabil, which wants not only its $1.8-million back but has asked a Pinellas County judge for triple damages.

The Stewart family finances are allegedly dire. Its house, cars and other assets will eventually be seized by Jabil or the government. Stewart's wife, Leslie, recently began working with disabled children at their daughters' elementary school, but earns just $7.75 an hour with no benefits, she said in court filings. A co-defendant in the government's civil suit, she has asked the judge in that case to appoint her free counsel.

Stewart's employability may soon be moot. Early next month he will formally plead guilty to six counts of wire fraud in federal court and may later be sentenced to prison.

Wirta, the First Advantage executive, said the lesson for companies like Vaco is not to skimp when screening applicants. "It really comes down to organizations getting serious about conducting due diligence about individuals," he said, "and not being under false pretense that you can get a thorough search done for $10" via the Internet.

Added Vaco's Waller: "Unfortunately, there is no perfect (screening) system, and we will continue to evaluate our process to make sure we exceed industry standards."

Scott Barancik can be reached at barancik@sptimes.com or (727) 893-8751.

[Last modified July 13, 2006, 06:37:26]