PEO's and Staffing Companies Hit With Payroll Fraud

The American Staffing Association has issued a warning to its members to be on the alert for companies that create fictitious temporary employees that are paid out of the targeted staffing company's bank accounts. Although the victimized companies are in Georgia, all should be watchful.

Below is an excerpt from the email alert:

Firms Should be Vigilant According to a detective from the Fulton County, Ga., police department, at least three staffing firms have been targeted in an alleged scam by perpetrators in Georgia. The suspects, Nicholas Lee Thomas and Jakim Edward Pearson, allegedly operate Furniture Showroom Inc., Appliance Warehouse, Radiator Warehouse, and Weatherization Inc. According to the detective, they allegedly contact staffing firms to manage their companies' payrolls and then defraud the firms by submitting falsified timecards and names of fictitious employees. The suspects also allegedly remit payments to the staffing firms using checks that later bounce.

At Directo we conduct due diligence on new clients in order to avoid these situations, and monitor accounts to maintain security.