Another EB-5 visa fraud, more burned investors. For people outside the United States trying to pick a reputable investment that will get them permanent residency in the U.S., sorting through hundreds of projects is often the hardest part of the job.

EB-5 due diligence

There is plenty written about what you should do before you invest, one of the latest guides being from the North American Securities Administrators Association, here. You can read up on EB-5 frauds here.

What are the warning signs of fraud? Last year’s revelation of a huge fraud at a Vermont development that had sucked in hundreds of investors led many to wonder, “How could we have known this would blow up?”

There is no guaranteed way to find fraud, but if you see things that would give a prudent investor pause; if the project’s sponsors don’t have a good track record; if you don’t understand the risks of the project (and they all have risks) walk away.

Remember, many reputable immigration lawyers refuse to recommend an EB-5 investment because they don’t want to be sued if the investment encounters problems, whether of a normal business variety or because of fraud. Even if your lawyer recommends an investment, you should still perform due diligence on the project.

Even more surprising to some non-Americans, once the government spots EB-5 fraud, it’s often too late for the investors who have put in their money. Sometimes investors can recover and sometimes not, but the green cards they wanted will not be delivered and they have lost time in addition to money.

Looking at the track record of a developer is much easier than going through the hundreds of pages of documents you and your lawyer will need to examine before you invest your money. You will always need to do both, but as you sort through five or ten possible investments, start with the track records.

The Vermont Fraud Warning Signs

One of the most celebrated of all the projects was the group of investments in the northeastern state of Vermont, near the border with Canada. Jay Peak was an old ski hill that fell into the hands of a Canadian operating company. They began with the EB-5 program by raising money for one project, but then in 2008 the Canadian company sold the business to a man local press described as “mysterious,” Ariel Quiros. He grew up in New York, was of Puerto Rican and Venezuelan background, but had spent years in Korea building unspecified businesses which supposedly gave him the ability to buy Jay Peak for $25 million.

Once Quiros bought the mountain, the EB-5 projects accelerated, with six more projects for hotels and finally, before the scheme was exposed, a bio-technology park that was supposed to flourish among the ski hills and dairy farms of far-northern Vermont.

The main thing an investor should have asked about Jay Peak was, who exactly is Ariel Quiros, the owner? The whole sickening unravelling of the investment project is available at (going from most recent to oldest story). But anyone investing after January 14, 2014 would have had an easy way to throw this one in the waste basket. A Vermont Digger article available on line described Quiros’ track record this way:

  • He lost his seat on the board of Bioheart Inc. after AnC Bio [Quiros’ company] failed to make the second installment in a $4 million investment.
  • Quiros also survived a Texas lawsuit in which two investors alleged breach of contract after they didn’t get their money back in full in 10 years.
  • And a Florida man claims he never received almost $16,000 worth of equipment from a [Quiros] company called Q Vision, but he appears to have dropped his pursuit of the matter.

Of course, full due diligence could involve verifying the assertions in this article, but if they turned out to be true, who would entrust half a million dollars and a green card to someone with a track record of not following through on investments and unhappy investors alleging breach of contract?

If Quiros occasionally had disputes with investors and partners, you would also ask a more basic question: how did he make his money – the money that bought Jay Peak — in the first place?

The article in January 2014 said,

“Quiros has melded street smarts from New York, military sensibilities from the Korean Demilitarized Zone and a love of adventure into a business empire that spans the globe, starting with international trade from Korea in the early 1980s… GSI Group, where he got his start in Korea, imported and exported goods ranging from shoes to women’s blouses to radios…He specialized in raw materials, much of it for the Korean government, he says.”

In addition, Bloomberg says that “Mr. Quiros serves as a Director and Principal of GSI Group, a raw materials procurement company for the South Korean manufacturing community with offices in Seoul, Beijing, Sydney, Hong Kong and Miami.”

The only problem is, GSI is one difficult company to find. Quiros shows up on open-source databases as a corporate officer of 96 companies, but these are all in Florida, Panama and Vermont. None of the Florida companies are called GSI.

On line, there is www.GSIkoreanet., but this mentions no overseas offices. GSI Australia’s website says it is a company dealing in poultry, swine and grain. There are no Korean links evident. And it is based in Queensland and Victoria, not New South Wales where Sydney is. The Australia companies registry provides no evidence of any Korean trading company registered in New South Wales.

In Hong Kong, a search of directors of all Hong Kong companies shows that nobody named Quiros and no company called GSI directs any Hong Kong company.

A search of regulatory filings in the U.S. turns up nothing on Quiros until 2010, after he bought Jay Peak. A news search on Bloomberg turns up only GSI Group Inc., a maker of agricultural equipment.

The earliest mention of Quiros in securities filings in the U.S. is in 2011, as an investor in a U.S. biotech company. His Korean address in this filing was: 10th Floor, H&S Tower, 119-2 Nonhyun-Dong, Gangnam-Gu, Seoul, Korea 135-820. A reverse search of this address turns up nothing on GSI.

Are we therefore stunned to learn today that according to the U.S. Securities and Exchange Commission, Quiros never used his own money to buy Jay Peak in the first place? Instead, according to the judicial complaint filed in 2016, Quiros took money investors had already put into Jay Peak when it was owned by the Canadians, and used that cash to buy the ski resort.

Subsequent cash that came in for new projects funded prior projects, but eventually the game was up when Quiros told investors that their hotel project was cancelled and converted into a loan. They would get their money back, he promised, but green cards would not be forthcoming. Quiros is fighting the SEC, while his President has settled with the agency.

In the Bernard Madoff Ponzi scheme, there were red flags that sent many prudent investors away: a small-time accountant for what was supposed to be a multi-billion-dollar enterprise, and no independent custodian for the investor money.

In the case of Quiros and the Vermont project, a history of unhappy investors and a murky source of funds should have been enough for investors to say, “Not this one.”


About the firm:

Charles Griffin Intelligence is an independent consulting firm that performs investor due diligence for hedge funds, corporations and individuals both inside and outside the United States. We never do work for any EB-5 developer or regional center. We do not provide legal advice, but can help investors and their lawyers assess the business risk of an investment.

For more information about the firm, please see the website at You can also read our blog, The Ethical Investigator, at


We pretty regularly find ourselves blogging about small business owners that draw people into scams.  We’ve seen the would-be movie executive, the sweet-talking investment solicitor, the landscaper and the produce company owner. Too often, we find that defrauded consumers and investors could have avoided their losses by doing some basic due diligence.  Sometimes the diligeCollapsed Roof.jpgnce can be as simple as a Google search, while other times it might pay to get an investigator involved.

Not surprisingly, we came across two stories this week and now add a roofing contractor and appliance repair store to our list of alleged (and some convicted) fraudsters.

Michigan roofer Kenneth Bird’s scheme was nothing out of the ordinary.  According to media reports, he took deposits for roofing work from potential clients and then never showed up to actually do the work.  He pleaded guilty to defrauding one couple of $6,125 for a $12, 250 roofing job he never completed at their home.  Colorado appliance repair store, AAAA TV Electronics Vacuum Appliance, allegedly over-charged customers for parts that they did not need, did not receive and some that did not even exist.

So how do you avoid losing money to these kinds of businesses?  In both of these cases, a quick Google search might have done the trick.  The Better Business Bureau had received numerous complaints about each of these companies, a tally of which was readily available on the internet.  In addition, a “Ripoff Report” was posted online about the appliance store and both businesses had some fairly negative reviews on  We tend to be very cautious when relying on internet information.  Most of the time, you don’t know who is behind a Yelp review, Ripoff Report or Better Business Bureau complaint, and not everything you read online is true.  That said, when there are a large number of complaints and/or troublesome reviews online about one company, it should at least give you pause before choosing them for your vacuum repair or roofing needs.

Beyond basic Google searching, it can pay to hire an investigator to go further than what’s available online.  We’ve blogged here about why Google should not be a substitute for thinking and we know from experience that most public records are not available on the internet.  As investigators, we use a whole range of ethical techniques to gather balanced information about people and companies.  This puts our clients in the position of feeling protected against the many fraudsters and scam artists that are out there.

According to the Sacramento Bee, a would-be movie studio executive, Carissa Carpenter, pleaded not guilty last week to defrauding investors of at least $5 million during her failed 17-year attempt at creating a movie studio in Northern California.  Over the 17-year period, she shifted Movie Reels.jpgthe location of her planned studio several times.  Her last purported studio location was in Dixon, California where she proposed building a $2.8 billion complex that was supposed to have opened in October 2015.  On October 30, 2014, Carpenter was indicted by a federal grand jury, charging that she spent 17-years making a string of studio pitches in a fraudulent attempt to raise money from investors and spend it on her own extravagant lifestyle. 

We always come across these stories in which investors are bilked out of huge sums of money.  The first question that pops into our heads when we read these stories is, “well, did anyone run a background check on the fraudster before forking over their life savings?”  Most times, it appears the answer is probably no, and we’ve blogged about it over and over (here, here and here).  This case seems to be no different.   We ran a quick litigation search on Carpenter in one of our commercial databases and came up with 6 cases against a Carissa Carpenter in California.  Because we didn’t pull the records, we can’t be sure that all of those cases are against the movie studio Carissa Carpenter.  But we know that at least two of the cases are, one of which is for contractual fraud, since one of her companies is also listed as a defendant.   Carissa Carpenter isn’t an exceedingly common name, so there is a decent chance the other four cases may be suits against movie studio Carpenter as well. 

The presence of litigation against a person doesn’t necessarily mean that you should steer clear of investing with them, but it should give you pause and cause you to look into the facts surrounding the lawsuits.  Investors usually come to us too late in the game.  They hire us after they’ve already been defrauded by someone, and they are looking to grab any remaining assets.  Too often, when performing these after-the-fact asset searches, we find that the person that defrauded our client has a long history of being accused of fraud, amongst other red flags.  If our clients had asked us to do a little due diligence before investing money, they probably would not have lost it in the first place. 

“TelexFree is already creating MILLIONAIRES and now is YOUR turn.”  So read the now defunct website of TelexFree Inc., which U.S. officials ordered to be taken down earlier this month.  Massachusetts company TelexFree Inc. held itself out as a low-cost internet telephone company.  In reality, its founders were allegedly running a billion dollar global Ponzi scheme, luring in tens of thousands of investors with promises of annual returns of up to 250%.     

TelexFree Scam.jpgTelexFree’s promoters allegedly preyed on low and middle income immigrant communities.  These investors may not have had the resources to hire an expert to conduct exhaustive due diligence prior to investing.  But we often see wealthy investors who choose not to ask too many questions before sinking their money into a risky venture, and instead rely on the advice of a friend or financial advisor who may or may not have done their own due diligence.    

In the case of TelexFree, had investors done some digging, they would have likely found enough questionable information about the company and its founders to persuade them to take their cash elsewhere.  A simple internet search would have revealed that TelexFree was shut down in Brazil nearly a year ago after a judge ruled that the company was a fraud.  Also, authorities in Guernsey posted warnings about TelexFree on their Facebook page months ago.

A more thorough investigation would have shown that TelexFree promoter Sann Rodrigues, whose real name is Sanderley Rodrigues de Vasconcelos, had already been in trouble for a similar, if much smaller, scheme.  In 2006, the SEC won a fraud case against Rodrigues and his former company, Universo FoneClub.  The company was ordered to pay $1.6 million in restitution.      

The moral of the story is: do your homework.  Before you invest in a company or hedge fund, get an objective opinion about whether they really are what they say they are.  Don’t rely on the people who want your money to give you a complete warts-and-all picture of their company.  Hiring people like us to conduct a thorough investigation may seem expensive at first blush, but it could end up saving you the value of your investment.  Just ask the people who wrote checks to TelexFree.    

One of the best ways to learn how to detect fraud is to look at people who have been caught and then analyze what you could have done to avoid being taken in as others were.Fake royalty.jpg

News from Germany here about a man jailed recently for rape and fraud after pretending to be German royalty has its share of easy as well as harder-to-find falsehoods.

Anyone who’s German and is of a certain age can claim to be a German diplomat, friends with Angela Merkel or the owner of a gold mine. Harder to swing is the claim that he was an owner of The World Bank.

But what draws a lot of people in is often a claim to be part of a noble or celebrated family. The U.S. has had plenty of fake Rockefellers and Rothschilds, and this man in Germany, identified only as “Roland Johannes P.” claimed to be “Prince von Hohenlohe.”

That kind of claim is problematic and to get to the bottom of it requires what we refer to as “meta searching.” That means one Google search won’t be enough to dispose of the question, “Is this man a real Hohenlohe or not?”

Meta searching is searching for the search that will lead you to your answer. This case reminded us of the time that we had to unravel a scam based in Spain. We knew quickly it was a scam not because it was listed on a website about scams, but because the street address of the fake entity was not to be found in any Madrid street guide we could find. We knew we were onto something when the saint’s name of the street did not appear in a list of the Catholic Church’s saints.  

The real Hohenlohes are part of a real dynasty, for sure, but you won’t find a complete membership list with a single Google search. Google is not set up to give you yes-or-no answers to anything remotely complicated, as we’ve written about here in A Fact Finding Test for Lawyers or here in Google is Not a Substitute for Thinking.

Don’t expect Google to tell you who the Hohenlohe’s are specifically. Expect Google first to tell you in general terms about the Hohenlohe family. With that information, you may find out such things as:

  • Whether there are other websites (perhaps in German or other languages) devoted to this family, or to German royalty in general. In could be that there are lists of names on these websites, but these names won’t pop up in a Google search if they are on pdf documents not scanned by Google’s robots. You may also need to search Google in Germany or Austria as opposed to
  • Names of other Hohenlohe people who are more verifiably the genuine article. You could always contact them to see if they either know the person you are looking at, or know of a definitive family registry that could confirm the fact that your person is a member of the family. One such person in this case could be the jet-setting and apparently real Hubertus von Hohenlohe, who for reasons you can read about here is on the Mexican alpine ski team at the Olympics even though he is 55 years old.

The easiest way to pick apart fake nobles and plutocrats who don’t appear to check out on the internet or in any public record you can find? Ask them for the name of a single relative who knows them. These people usually work alone and won’t want to cough up a name. If they do, call that person up and ask them about your alleged prince, Rockefeller or whatever he claims to be. Chances are you can end the inquiry right there.

GettyImages_138621830.jpgMost people have seen the warning message on the ATM machine that recently deposited funds may not be made available for immediate withdrawal.  What people may not realize is that a number of scams have been designed to take advantage of the lag time between deposit and collection.  A variation of the scam even has the notorious honor of being named one of the top ten scams of 2011 by the Better Business Bureau. And bar associations nationwide have warned lawyers to be on the lookout

This is what happens: An American attorney is retained by a foreign client to help the client collect a debt or enforce a judgment. The lawyer does his due diligence and determines that the email, web site and address provided appear to belong to a legitimate company. In fact, it may even be publicly traded. The debtor agrees to pay or settle the amount due.  The debtor sends along a check, which the attorney deposits.  The attorney then promptly arranges to have the funds wired to the foreign client. 

Eventually the bank realizes that the check was forged, but by then the account is overdrawn.  Sure enough, the attorney who oversaw the transaction is left fighting with the bank to clear himself of any liability.

Outside of the corporate context, the scam usually involves people selling goods or subletting apartments via websites like Craigslist. The buyer/tenant lives abroad and sends a foreign check for more than the amount owed. Realizing the mistake, they ask the vendor to please deposit the check and just wire back the difference.  Sure enough, the original check eventually bounces and the vendor is liable for the amount previously wired.

So, why does it take so long to clear a foreign check? Well, because even in this day and age, when you deposit a check from a foreign bank, the physical check actually has to be mailed overseas for collection.  That’s right, mailed. While abroad, it may need to make an additional five to six stops before the funds are fully cleared: One bank’s spokesperson explains that the mailed check goes to the bank’s international group abroad, which sends it to the corresponding bank in the country involved, which may need to send it to the bank on which it was drawn. The check then makes its way back to the correspondent bank and then again to the international division.  All that back and forth can take weeks and weeks.

So what does this mean for the person who originally deposited the funds? Well, even though it may initially appear that the funds cleared, in fact there are no assurances until the bank has completed the lengthy process

Some banks leave no room for doubt, holding all funds until the transaction is officially completed. While this sort of policy is inconvenient, it does have the advantage of protecting against scam artists.

Usually, though, banks are eager not to inconvenience their clients. They take a less rigid approach, using a scoring system to determine what kind of hold, if any, is necessary. Among the factors they consider are the size of the check and the customer’s relationship with the bank. If they deem the check a low risk, they’ll release the funds before the process is done.  But if it is a con, then the client, and not the bank, is left footing the bill. 

Contrast this long bank clearing process to wire transfers. Once a wire transfer is authorized, the funds are automatically transferred. There is no lengthy delay, there is no time for clearance. The money is instantly gone.

Given how sophisticated some of these con artists are, perhaps the best way to protect against this sort of scam may be to refuse to wire any funds until after all checks have completely cleared. With the caveat, of course, that for foreign funds this means being prepared to wait anywhere from 10 days to 8 weeks, depending on the amount and the country of origin.  And if clients aren’t willing to wait that long, ask them to wire their original funds to help move things along. If they are con artists, they’ll most likely cancel the deal, cut their losses and move on to their next target.

A sophisticated friend of our firm was in the market for a luxury car and found one for sale via the Internet. His concern was aroused when the seller said she was handling the sale through a company called Escrow Atlantic, an international payments company.


Our friend asked us to look at this company, and the results make for a nice case study in the detection of possible fraud.

We started with the Escrow Atlantic website. It looks professional enough, but we always like to know who has registered an internet domain since that can provide a good clue as to who is behind the operation. Sometimes this is hidden information, but in this case it isn’t. It turns out that by going to Network Solutions’ Who Is registry here, we found that Escrow Atlantic’s site is registered to a man in Florida who has an Italian telephone number. His email address is a hotmail account with the name of a different individual.

None of this is tantamount of a scam, of course, but it’s a little unusual. Why not a company email address? Why an Italian phone number when, according to the company website, the company has no office in Italy?

We pressed on and tried to call Escrow Atlantic, but the toll-free number went to the voicemail of “Escrow Atlantic” (and not a particular person). The numbers for the Florida and Missouri offices went instantly to voicemail, and we were unable to connect with the London number.

A search for a business registration record at the Secretaries of State in Florida and Missouri turned up no record of a company called Escrow Atlantic. Nor was it registered under that name at Companies House in the United Kingdom, where you can do a free search here.

Finally, we emailed the Missouri office of Escrow Atlantic, and here we got quick responses, up to a point. Where is the company registered? We were referred to the website’s contact page with the office addresses and phone numbers. We asked again and were told that Escrow Atlantic is “Registered in the United Kingdom with offices in America and Australia.”

Unfortunately, when we responded that we could find no registration in the UK, the company went quiet on us. Of course, Escrow Atlantic could be a “DBA,” or doing business as – a business name different from the official company name – but it would be easy enough for the company to tell us that.

While we can’t say that Escrow Atlantic is not a reputable company, if it is it could do two things to boost our confidence:

  1. Get someone –  anyone – to answer the phone;
  2. Provide that most basic of information: the place of incorporation and the name of the company that was incorporated.


The news is out and it’s not good. In fact, it’s downright troubling.  It seems that every day, usually several times a day, there is more and more information available about the dangers of the Internet.  It’s enough to make a Luddite out of even the most devoted technophile.  Here’s a sampling of some of the latest updates on the lack of privacy on the Internet, and threats to personal and financial information:

  • Online Tracking is Worse Than We Thought: UC Berkeley Law School recently released its first ever Web Privacy Census, which was aimed at measuring how companies track visitors to their websites. The report confirmed that all the top 100 web sites use cookies to track users and visitors. If that’s not worrisome enough, the study also determined that the use of tracking software on users’ computers has doubled in the past year. This is about more than tracking users anonymously to provide targeted advertising—like when you scroll a website for a grill and then you check your email and suddenly see ads for some of the same grills you clicked on from the sites you just visited.  Apparently, companies are just as likely to collect and use personal information in ways that may subject consumers to price discrimination, lowered credit scores and limits, and even identity theft.
  • Social Networking Can Be Dangerous: The FBI recently issued a new warning on social networking.  The FBI pointed out that hackers are not only threatening governments—they are also targeting individual users via social networks, exposing the users and their workplaces, if they are online in the office, to great harm.  Hackers either exploit personal connections through social networks or write and manipulate computer code to gain access and/or install unwanted software on personal or company computers or phones. 
  • Tweets and Facebook Posts May be Used Against You: The courts continue to weigh in on whether social networking may be used against users who post information on their personal sites.  While the judiciary’s responses vary on a case-by-case basis, so far the trend seems to be that posts on Facebook or tweets may be used as grounds for dismissals from jobs, or even against defendants in criminal or civil cases.

Politicians are paying attention.  Senators and Representatives have introduced a plethora of competing bills and held or plan to hold a number of hearings to discuss how best to protect Internet users.  A good summary of the most recent efforts can be found on the Data Privacy Monitor blog run by the law firm Baker Hostetler.  Issues being addressed include protections to safeguard users’ privacy, requiring greater transparency from companies about how they troll for information from users and what they use that data for, and clearer terms of use that allow consumers to easily opt out of having their time online tracked.  In addition, the National Telecommunications & Information Administration (NTIA) has announced its first meeting to develop a code of conduct in order to uncover how companies that provide apps for mobile devices deal with personal information.

Keeping up with all the changes is daunting, but as we’ve said before, in our entries “The Myth of Online Privacy” and “Fight Hackers With Encryption,” there are simple steps you can take to protect yourself.  This article, “How to Keep Your Facebook Profile Private Yet Usable,” written by Dave Copeland details the best ways to protect yourself on Facebook, short of not signing up in the first place. Numerous software programs exist to block tracking data from being stored on your computers.  Creating a clear Internet use policy for your company and making sure your employees understand what is expected of them is also a good plan.

And, as always, doing the bare minimum is crucial: encrypting emails, only using secure Wi-Fi connections and avoiding some of the most common tricks used to activate malware that can log keystrokes or record phone calls.

None of these measures will provide complete protection, but they are good places to start to ensure that you and your company are being proactive about guarding against some of the dangers that lurk online. 

There are plenty of excited articles around these days about the new JOBS (Jumpstart Our Business Startups ) Act and the effect this new law will have on the marketing of hedge funds. In brief, it’s now going to be easier for hedge funds to market themselves to the general public. If previously hedge funds ever thought of running ads on TV or radio, or writting guest promos on blogs and social media, they would have been restricted by a legal prohibition against such things. The JOBS Act changes that.


Another big change is that hedge funds, rather than having to collect only really large sums of money from wealthy people, will now be able to raise up to $1 million a year in small amounts from people not previously allowed to invest in such vehicles. Remember all the complaining that only the really rich had access to the elite performance hedge funds were able to provide? That protected a lot of little people from Bernie Madoff, but never mind – now the little people will have the same chance as everyone else to make a lot of money or, if not hand it to a criminal, invest with someone who won’t deserve the huge fees he will be charging.

Now say you are thinking of putting money in a hedge fund, or are given the task of checking out a prospective hedge fund for your client. The hedge fund has been around for three years and has pretty good returns. What else should you look at?  We’ve written in “Allen Stanford: Persistent Due Diligence Could Have Made a Difference” about the huge red flags Allen Stanford had flying if investors had just cared to look. Bernie Madoff, aside from his tiny auditor, declared with the SEC just a fraction of the stocks under management he was supposed to have had.

In the interest of avoiding such disasters in future, here for starters are some of the questions would recommend:

  • What funds did the principals run before? Hedge funds can (and often do) close up shop when they don’t do well. They return money to investors and dissolve. But what about the managers of those poorly-performing funds? It’s accepted practice in the world of hedge funds that managers of failed funds get new investors and open new funds under a different name. Is your manager one of those on the rebound?
  • What were the circumstances that caused the old fund to close? Was it the retirement of the manager’s partner, or just sub-par returns? If unclear on this, are there any former employees or investors we could talk to in order to find out what really happened?
  • Beyond previous fund experience, have the managers ever been subject to regulatory sanctions? Have they ever been sued by investors or anyone else? If the answer to the lawsuit question is “yes, but the legal matter settled,” we would advise that you retrieve the court documents (manually is usually the way we usually do this, not on line) and then read the allegations made against your manager.
  • Finally, you want to make sure the fund is registered where it says it is and the principals are really the people as represented. We’ve written before in “Prevent Corporate Identity Theft: A Consumer’s Checklist about preventing corporate identity fraud, and now that hedge funds can advertise you want to be especially careful that the address to which you send your money corresponds to the one in official records.

Will all of this take a little bit of time? Sure. But given that some people agonize for a year about which kind of luxury car to buy, it makes no sense to us that cocktail party chatter alone should be the basis for an investment worth several Porsches.

Due diligence isn’t as much as fun as the Porsche showroom, but failure to do it right could mean a downshift to a Hyundai when you least expect it.

One of our most closely-guarded pieces of personal information, we nonetheless are obliged to divulge our Social Security numbers several times a year. You want a job? Hand it over.

A client once approached us to see whether we could run a quick background check on domestic helper he was thinking of employing. She cheerfully offered references, photocopies of a foreign passport and green card, plus a social security number. Our conclusion after about an hour? Her SSN was probably faked, and her green card probably was too.


How did we know without picking up a phone or looking at the document? Anyone with a SSN issued after June 25 of last year got a randomized number. There’s no way for us to tell on our own whether it’s valid or where it was issued. Employers who want to find out if a prospective worker has a real SSN need to use the Social Security Number Verification Service here. You need to register, and there’s a time lag.

What’s nice for anyone else looking at SSN’s issued before June 25 of last year (as our subject’s supposedly was) is that there used to be a system employed in issuing the numbers that could be helpful in figuring out where a person may have lived and when the number was issued.

The first three numbers related to which state the number was issued in. We often find it helpful to know that if someone we’re investigating claims to have lived his entire professional life in New York, his SSN issued in Michigan or Texas gives us a clue that for a time, anyway, he was outside of New York. For someone born in the U.S. that may just mean that he was with his family for a year when he was 12.

But for a person who grew up abroad and got a SSN when he was 35, it’s nice to know where he was when he got that number. For one thing, when checking for a criminal record you get a second state to look at since there is no such thing as a single, national criminal records check available to people outside of law enforcement.

The second two numbers of the SSN are called the series number, and we use these to figure out when the card issued. This was also how we figured our domestic helper was probably faking. The series numbers were not issued sequentially, but were issued according to a known system. If you know the system and when someone’s number was issued you can see whether the number matches the real SSN series issued in that month for that state prefix. Just check the “high number” list).

In the case of our domestic helper, she had a number that should have been issued several years earlier than her arrival in the U.S. Our theory was that she copied part of the legitimate number of a relative who had a good SSN, but that relative had been in the U.S. a lot longer.