Case Studies
Beaufort County (SC) Business License/Employment Eligibility Compliance Audit
Situation Analysis:
All businesses located or operating within Beaufort County, South Carolina must apply for and maintain a Beaufort County business license.
The County had received complaints that certain non-complying businesses gained an unfair competitive advantage over complying businesses.
It was estimated that 80% of businesses in unincorporated Beaufort County did not have the required County business license. The Beaufort County Council mandated random audits of businesses in 2006. The program began in earnest in April 2008.
The County engaged Advance Point Global to conduct inspections to ensure the proper payment of business license fees and understanding of the fees and business license ordinances, and to determine compliance with applicable laws, ordinances and regulations.
Objectives:
Identify persons/entities engaged in business in Beaufort County that have not obtained the required license, and are more likely to engage in unlawful business practices.
Ascertain if licensed businesses have accurately reported their gross receipts and paid the appropriate license fees.
Ascertain if licensed businesses have completed and kept I-9 forms for all employees as required by the United States Government and Beaufort County.
Ensure equitable implementation of the business license ordinance.
Methodology:
The audits consist mainly of document inspections and examination of the business’s books and records to ensure proper reporting of gross receipts to the County and to ensure that the business is complying with federal employment eligibility verification and retention requirements. The process includes the following steps:
Verifying gross receipts documentation (business license fees are based on gross revenue) for the last three years (tax returns, filing statements).
Inspection and examination of company books and records.
Checking employee records for federally required documents.
Inspecting list of employees hired within past 12 months (payroll list, etc.).
Inspecting I-9 forms for each employee.
Results and Actions Taken:
Thanks to the information provided by APG in these compliance audits, Beaufort County has been able to identify businesses that were misstating their revenues or incorrectly classifying employees as independent contractors. These discoveries have resulted in increased license fee revenues because invariably the violators were paying less in fees than their revenues warranted. Also, any independent contractors discovered are being channeled through the licensing process and paying the appropriate fees, and contractors discovered to be illegal aliens are not permitted to continue as contractors.
In some instances, several businesses of the same type or classification were found not to be in compliance with certain ordinances. This indicated a lack of knowledge or understanding of the law within those business classifications, and the business owners were not aware that they were not in compliance. The County Administrator authorized APG to audit additional businesses in those classifications as a means of educating licensees and ensuring compliance with the law.
Approximately 890 businesses and 7,000 employee immigration (I-9) forms were audited in 2008. APG determined that approximately half of the forms checked in 2008 were incorrect or had errors.
Some of the infractions were due to minor mistakes, but others involved missing or misplaced information, unacceptable documentation of identity and/or work authorization. The audits have led to some employee arrests.
The audits conducted by APG have helped to root out instances of document fraud that can go undetected due to deficiencies in the federal I-9 program. Infractions discovered by APG auditors include duplicate A-Numbers (unique identifier assigned to each alien by the U.S. Department of Homeland Security), duplicate alien tax id numbers, and duplicate, fraudulent, or stolen Social Security numbers. APG found nine businesses with serious I.D. fraud issues involving 81 individuals in its first 100 audits.
Additionally, evidence produced by APG’s audits enables Beaufort County to file immigration violation charges against identified illegal aliens and launch the removal process under 287(g) authority.
Benefit(s) to Audit Subjects and Complying Businesses:
Inspections are performed to ensure proper payment of business license fees and understanding of the fees and business license ordinances, and to determine compliance with applicable laws, ordinances, and regulations. This has helped some businesses to avoid suspension or revocation of business license.
Employment eligibility can be a complex issue. APG’s compliance audits have helped to make sure that businesses are in compliance with employee documentation, and lessen the likelihood that local, state or federal government will take action against them.
Not all of the violations found would necessarily result in federal immigration charges of knowingly hiring illegal workers if discovered by ICE. In some cases the employers simply were not well informed about the requirements. But paperwork errors could result in fines in the event of an official ICE audit. The audits conducted by APG provide a service to employers by educating them on the rules and preemptively bringing them into compliance before they might come under federal scrutiny.
The audits are meant to be instructive, not punitive. But if a business doesn't comply, it could lose its county license. The audits help businesses avoid loss of license.
Other Case Studies
Advance Point Global has participated in numerous investigations wherein clients have required confidentiality agreements prohibiting disclosure of specific information relating to the investigation conducted. Therefore, client and subject names and other specifics have been omitted from the following case study narratives.
APG can, however, provide information of a general nature that will attest to the breadth and depth of experience of Principals and Associates and can further discuss this experience, if necessary, in private.
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Due Diligence
Client believed that individual charged with major fund raising effort on client’s behalf was being duplicitous with regard to claims being made about integrity, past experience and general background information. Advance Point Global was able to show subject had extensive arrest and conviction record for financial crimes and provided false and misleading information and statements about past experience.
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Brand Protection/Counterfeit Pharmaceuticals
Major drug manufacturer requested a full-scale investigation of Internet companies filling prescriptions with a clandestinely manufactured, patent protected company product.
Advance Point Global managed, supervised and conducted an 18-month, multi-state undercover operation involving dozens of purchases of company product for analysis. The investigation confirmed that false claims were being made, that product was clandestinely manufactured and that product was inferior to patent protected product and unsafe for patients to consume. Matter resolved to client satisfaction and referred to FBI for further investigation of Federal law violations.
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Counterfeit Financial Instrument Investigation
Client requested investigation of corporate check drawn on a Canadian company and presented for payment in Helsinki, Finland by an unknown subject. Advance Point Global was able to identify the person attempting to pass the check and ascertain facts surrounding acquisition of the check presented for payment. The check was discovered to be a counterfeit created in Africa and presented for payment by an internationally known con artist who had participated in questionable transactions in other European countries. APG’s client was satisfied that the check was counterfeit, was not stolen from client, and that no employee of client was. The matter was referred to Helsinki police for further investigation and subsequent adjudication.
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Asset Search
Client believed that company premiums received by insurance broker were being diverted for private use. Advance Point Global was able to confirm the diversion of funds and locate assets for seizure.
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Asset/Business License Search/Subject Locate
Client owed just debt requested assistance in locating debtor believed to be an Italian citizen with business interests in Spain. Advance Point Global was able to obtain information on subject’s Spanish, Italian and Swiss business interests and locate subject’s new address in Switzerland, where he was living in a newly acquired residence.
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License/Education/Employment Verification
Client requested verification of business license, education and past employment records of a subject who had claimed that he held a certain professional license, had held employment in a foreign country and held degrees conferred from universities in Europe and the Middle East. Advance Point Global was able to prove that all claims were false.
International Criminal Background Checks
Client requested criminal background checks be performed on employees working in the United States who had emigrated from Africa, China, South and Central America. Advance Point Global performed all background checks successfully and in a timely manner.