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Anatomy Of A Fraud

Most fraud victims clam up. In this check-tampering case, the victim-a small-business owner-decided to speak out. The resulting cautionary tale offers a rare, detailed look into the mechanics and psychology of fraud. And its aftermath.

By Scott Berinato

Rosen copied Spherion and her bank on all of her correspondence relating to the fraud. She let them see e-mails about planned nightly news-inducing picketing campaigns and copies of a drafted letter to a local TV reporter offering up her story.

Within three weeks, the bank settled. (As part of the settlement, Rosen can't name the bank). Spherion did not. Spherion says that Rosen then requested a $60,000 settlement from the agency in lieu of her filing a lawsuit. Spherion again refused to accede.

Rosen kept pressing. Harder even. She targeted specific publications, including CSO, with an e-mail that offered up her story. David Callahan, an editor at Baltimore SmartCEO, says although he did not receive the e-mail, he had heard about the story elsewhere. He claims he approached Rosen (Spherion contends that Rosen approached Callahan), and in June 2004 published "Attack of the Serial Embezzler." The SmartCEO piece didn't mention Spherion's name. Spherion nevertheless took umbrage at the article. (On Page 52 of the issue, Spherion had taken out a quarter-page ad. Callahan says the company has since pulled its advertising.)

At the beginning of July, Rosen's campaign reached its zenith. According to Spherion, over the course of two days Rosen sent a series of demanding messages to the company and also e-mailed her claims about the case to other area businesses. Spherion claims that Rosen e-mailed the following to the CEO of a Baltimore-area Spherion competitor: "I bet [the SmartCEO article] can really help you obtain new clients that were once with the competition. Please spread the word!" A week after that, Spherion claims that Rosen called Spherion and "verbally berated" an administrative assistant. She also called and pretended to be a client phoning in a job order; when she got someone on the phone, she demanded money, without which she would continue her e-mail campaign.

Finally, Spherion had had enough. On July 9, Spherion sued Wendy Rosen.Spherion v. The Rosen GroupSpherion's sweeping lawsuit, from which all of the company's aforementioned claims were taken, lists five counts against Rosen and her company, including two counts of racketeering and one count of defamation. The racketeering counts seek treble damages plus attorneys' fees.

Spherion's assistant general counsel, Steven Lewengrub, and Spherion's outside firm, Seyfarth Shaw, declined to comment for this article. Lewengrub directed CSO to the complaint, which contends, for example, that the Salvation Army didn't even learn of the fraud until Feb. 12, 2003, the day after Spherion interviewed Jackson. Spherion also claims that there's no evidence that Jackson committed fraud while employed by Spherion, and that he was indicted and jailed when employed by The Rosen Group.

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