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Many people don’t understand the importance of the shred company
selection. All companies are not alike. With possible civil suit awards in the
millions, your selection could be the most important decision you ever
make for your company. Your corporate attorney and insurance
company may want to be consulted. They’re the ones who will be defending
you and possibly paying any claims arising from a negligent security
action. Example: If they know you’re using a start-up company or
garbage/recycling company, they may not underwrite your liability
insurance, especially with the added risk associated with off-site
document destruction.
Awards associated with lost records could be in the millions. A one or
two million dollar liability policy may not be sufficient to provide the
protection you need if choosing off-site service.
Regardless of what services say, or what security they have at their
off-site facility, the best security comes with an on-site service. The
risk is low using an on-site service, especially if you’ve researched
their shred type, background and disposal practices.
SOME NEWS FOR THOUGHT
You should be able to find the following if you search the internet.
* Medical files found in a dumpster in East Huntingdon Township, PA
* Two people arrested for dumping medical files in Arizona.
* A truck carrying documents to be shredded overturns in a river in
South Baltimore.
* A box containing confidential records falls off a document truck in
New York.
* Records from a closed National City Bank were dumped into a ravine in
New Kensington. * Time Warner, Lexis-Nexis, Wachovia, Ameritrade and ChoicePoint have
all announced that confidential information about their customers has
gone missing. * Bank of America lost tapes containing information on more than one
million federal government employees, including some US Senators.
* Time Warner tapes with 600,000 social security numbers were lost in
transit by a major record storage company. * A person arrested on more than 30 criminal charges is found to be a
partner in a Florida shredding company.
* Bank tapes containing information on millions of customers goes
missing in transport.
* School district is fined over $100,000 for unauthorized release of
student records
Remember, bigger doesn't always mean better. It's very
difficult for a large or nationwide company to keep a tight control on
many locations and thousands of employees. Unfortunate situations
can happen to any company, but you may find you get better security and
service by using more local services.
The February 19, 2006 edition of the New York Post reports
that (Jim Steinman) filed a multi-million dollar lawsuit in the New York
Supreme Court claiming Boston based Iron Mountain lost original
recordings he wrote for Bonnie Tyler "Total Eclipse of the Heart" and
Barbra Streisand's "Left in the Dark" recording.
The following was re-printed from Secure Destruction Magazine:
The Sunnyvale, Calif., Department of Public Safety arrested a suspect
in a scheme by which he allegedly attempted to inflated the weight of
the paper being shredded, creating fraudulent billing for services not
performed.
The suspect in the case is Daniel Lozano. He is employed as a driver for
Cintas Corp., which acquired the operations of Certified Document
Destruction Inc., late last year. Lozano had previously been employed by
Certified Document Destruction.
The charges were based on evidence that Lozano billed the city of
Sunnyvale for the services. Investigators are now attempting to
determine if other clients have been defrauded by this practice.
In a news release, the city notes that DPS employees became suspicious
that they were being defrauded when billing for shredding services
increased while the amount of paper being submitted remained constant.
The agency began weighing paper before it was submitted to the mobile
shredding operation. The department determined that since checking on
the weight differences, starting in September 2005, the driver was
routinely overweighing the amount of paper being collected for
shredding.
The driver has worked for the company, both Cintas and its previous
owner, for three years.
Friday, April 7, 2006
Fair suit alleges ticket scam
Officials say $1.5 million lost after coupons destined for shredding
were resold
11:47 PM CDT on Monday, September 18, 2006
By KATIE MENZER / The Dallas Morning News

REX C. CURRY/Special to DMN Robert Smith (left), the fair's general
counsel, and David Margulies discuss a suspected coupon scheme.
Officials say an unusual number of 2004 State Fair of Texas coupons that
were supposed to be destroyed were used during the 2005 fair.
The State Fair of Texas filed suit Monday against a document-disposal
company that fair officials say helped sell food and ride coupons on the
black market instead of shredding them.
The fair says it was bilked out of about $1.5 million in the alleged
scheme.
Iron Mountain Inc. was hired in 2004 to destroy used and extra coupons,
according to the suit. The fair said that the 50-cent coupons were not
destroyed and that Iron Mountain employees and others sold them at a
discount in 2005 at businesses near the company's shredding plant in
Dallas' Stemmons Corridor.
"We've done extensive research over the last 12 months to determine the
distribution network," said Robert Smith, the fair's general counsel.
"It was a network within the corridor of businesses."
A spokesman for Iron Mountain said in an e-mail Monday that the company
had cooperated with a Dallas police investigation and had done its own
inquiry into the matter.
"It is our understanding that the Dallas Police Department concluded
that there was no evidence against Iron Mountain or its personnel of any
wrongdoing," Laura Sudnik said.
She said she could not comment further because the company had not
received a copy of the lawsuit. But the company believes "that any
complaint will be without merit," she said.
The suit names Iron Mountain and a handful of employees who were working
there at the time the alleged scheme was under way. Former or current
workers and residents at a Deluxe Inn motel and employees of a
McDonald's also were named.
The fair said it will ask a Dallas County district court for recovery of
its losses, attorneys' fees and punitive damages, which could reach into
the millions of dollars.
According to its Web site, Iron Mountain is the "global leader in
information protection and storage services" with more than 15,500
employees and 850 facilities worldwide.
Iron Mountain made national headlines last year when Time Warner Inc.
said the Boston-based security company misplaced computer tapes
containing personal information on 600,000 current and former Time
Warner employees.
The company also admitted to losing information about customers from Los
Angeles' City National Bank, and Sen. Charles Schumer, D-N.Y., asked the
Federal Trade Commission earlier this year to investigate Iron
Mountain's security and privacy policies.
Bharti Patel, manager of the Deluxe Inn and a defendant in the suit,
said she first heard of a coupon scam six months ago when she received a
call from an investigator.
"I told him I didn't know anything about the tickets," she said Monday,
adding that she did not know why she was named in the suit.
A woman who said she was the owner of the McDonald's on John Carpenter
Freeway said she also didn't know about the case.
Coupons are used at many fairs to help track sales and keep business
honest. At the Texas fair, visitors may buy coupons only at authorized
booths on the fairgrounds to purchase food and rides from vendors. Those
vendors turn the coupons into fair officials, who pay them a percentage
of their value.
The coupons are color-coded and numbered so that fair officials can
track their progress. Fair policy allows fairgoers to keep unused
coupons for use in following years.
But when a large number of 2004 coupons began showing up at the 2005
fair, officials knew something was amiss. They hired two firms of
private investigators to follow the trail.
The investigators paired with Dallas police officers and interviewed
fairgoers who were using 2004 coupons. In the final four days of the
fair, they identified 137 fairgoers who tried to redeem coupons that had
never been sold at the official coupon ticket booths.
Ultimately, the police declared that no crime had occurred and told the
fair that the coupon situation was a civil matter.
"The fair had a contract with the disposal company," said Lt. A.F.
Diorio of the northwest operation bureau's investigative unit. "If they
didn't destroy them, then that was in violation of that contract."
Fair officials said they have no idea how many people bought the
illegitimate coupons, but they estimate about 3 million were sold.
According to the suit, the coupons had been bought by people from across
the area, including Dallas, Lancaster, Mesquite, Richardson, Red Oak,
DeSoto, Balch Springs, Midlothian, Duncanville, Murphy, Plano,
Mansfield, Irving, Rowlett and Grand Prairie.
"They claimed to have received them from street purchases, shopping
center parking lots, barber shops, relatives, employers and a bus
station," the lawsuit says.
"The magnitude of the pilferage of SFT property could not, in all
reasonable probability, have existed without the intentional direction
of upper management at the IM shredding facility, or through their gross
negligence and absolute abrogation and dereliction of duties or through
carelessness and negligence."
The fair destroyed its own coupons until 2001, when Iron Mountain was
hired to do the job. The company was paid $10,000 each year to destroy
coupons that had been used by fairgoers and unissued ones.
Under protocol, Iron Mountain employees were to pick up the coupons at
the fairgrounds, sign for them and drive them back to their facility to
be shredded, fair officials said. Fair employees would follow behind in
their vehicles to oversee the process.
But in 2004, Iron Mountain employees said their shredder was broken, so
they told the fair that the coupons would be kept on site in locked bins
until their equipment was working again, according to the lawsuit.
The fair claims that Iron Mountain didn't maintain the integrity of the
bins, however, because each employee had keys or combinations to unlock
them.
Fair officials said vendors did not lose money last year and were paid
by the fair whether the coupons they had received from fairgoers were
legitimate or not. Officials confiscated prohibited coupons from
fairgoers in the final days.
Fair officials have hired another company to shred coupons this year.
That company has mobile equipment, which it will bring to the
fairgrounds to destroy the coupons while the fair's internal audit team
watches.
When the fair opens Sept. 29, officials said they will continue to honor
previous years' coupons, but fairgoers must exchange them for new
coupons at one location on the fairgrounds.
"We're going to try to make it as simple as possible," Mr. Smith said.
Staff writer Jason Trahan contributed to this report.
E-mail kmenzer@dallasnews.com
COUPON REDEMPTIONS
The State Fair of Texas will honor previous years' coupons bought at
fairground booths. But fairgoers will need to swap them for 2006 coupons
at an exchange center on the south concourse of the Coliseum. The center
will be open from 10 a.m. to 10 p.m. each day of the fair.
The following article is re-printed with permission from Rochester
Democrat and Chronicle.
Phone card scam revealed
Frontier Corp. might lose $6.5 million in access-card theft; Buffalo man
pleads guilty.
BY MICHELE LOCASTRO RIVOLI, STAFF WRITER
A Buffalo man pleaded guilty yesterday to selling 1 million Frontier
Corp.
prepaid phone cards that were supposed to be destroyed here.
The crime could cost Frontier up to $6.5 million and could send the man
to
prison for 10 years.
“We are the victims of a crime“, Frontier spokesman Randal Simonetti
said.
“We trusted a third-party supplier to destroy these cards, and they were
stolen from the supplier’s premises.”
Derick Ayers, 26, pleaded guilty before U.S. District Judge David
Larimer in
Rochester to a charge of unauthorized use of the access cards. The
charge covers the 1 million stolen cards.
The cards taken were “Call Time”
telephone calling cards issued by Frontier.
Assistant U.S. Attorney Rick Resnick said the cards were issued for
Frontier
but were brought to the Rochester company Shred-It to be destroyed after
it
was discovered they had an expiration date of “6/31/99.”
“There’s only 30 days in June and Frontier took them to Shred-It to
have
them shredded,” Resnick said.
Ayers, an employee at Shred-It, admitted that on Sept. 10 he took the
cards
and sold them to two unidentified men for an undisclosed amount of
money,
Resnick said.
Officials would not say where or how the cards were distributed because
the
investigation is ongoing.
But Simonetti said it was Frontier that quickly realized there was a
problem.
“We have a comprehensive fraud control process built into the calling
card
platform that allowed us to learn quickly that the cards had not been
destroyed,” Simonetti said. “Within 48 hours of the first illegal use of
one
of the cards, our system picked it up, and at that point we began
working
with both local and federal authorities on this case.”
The cards were being used all over the country from cities including New
York City and Chicago, he said.
Resnick said the million phone cards were worth varying amounts of
long-distance calling minutes. If all were used they could have cost
Frontier about $6.5 million.
“We are cooperating with the FBI on determining the actual value of our
loss,” Simonetti said.
“When all the calculations are complete, it could be far less. Our quick
response to the problem reduced our exposure,” he said.
Ayers is free on bail pending his sentencing on June 26.
Ayers couldn’t be reached for comment and his attorney Terry Granger did
not
return phone calls.
An official at Shred-It would not say whether Ayers was still employed
and
declined comment on issues related to the case.
Frontier discontinued the calling card portion of its business during
its
reorganization last fall.
<<<<<<<<<<<<<<<<<
Copyright 1998 Gannett Rochester Newspapers
COMPARING SHREDDING SERVICES
Company Background: Knisely Shredding _____________ _____________
Security __YES__
Garbage/recycling
New start-up
Moving/storage
Employee backgrounds:
Nationwide fingerprint __YES_
Years in Business: __18___
Type of service provided:
On-site __YES__
Off-site __YES__
Shred type used:
Hammermill __YES__
5/16” shred __YES__
1/2” shred
5/8" shred Grinder
___YES__
Pierce & Tear
Disposal Method:
Public Facility
Private Facility __YES__
Bonded: __YES__
Liability Insurance __YES__
Errors & Omissions
__YES__
KNISELY MOBILE SHREDDING - Bellefonte/Woolrich, PA
Phone (800) 810-0474 Fax (570)769-7429
email:
dkknisely@aol.com Copyright
2006 All rights reserved |
