Business Solutions with SAP

Legal Liability

Too many companies have not considered the potential legal liability to shareholders or other company stakeholders for having “fake” consultants at involved in their company IT projects.  This can be applied personally or coporately for the fake IT “professionals” that vendors and placement firms bring to company projects.  By not conducting sufficient due diligence in screening vendor resources, or for inconsistent labor practices there is a much larger potential for liability than many realize. And that would include both corporate and personal liability for Directors and Executives that fraudulent “consultants” may cause.

There is not only the potential of torts for negligence or gross negligence but there are also potential wrongful termination suits for any regular employee your company might need to terminate. The real shock is that more of this type of legal activity hasn’t already taken place, but it is just a matter of time.  It’s not important to take this author’s word for it, just read this material and then have your corporate counsel and HR departments review it as well and then ask yourself what the consequences to you and your company might be.

For example if an employee submits a false or fake resume or otherwise lies on their application to your company about their skills and you fire them there may be both personal and corporate liability.  This is true if you do not use at least similar diligence, care, and consequences for vendors and their resources.  If a CIO, IT Director, or some other managing official were so brash as to knowingly ignore the fraudulent vendor resources or consultants and then not apply the same standard for regular employees there may be a solid case for wrongful termination of anyone who is fired for false claims. You might as well just remove that clause on your employment applications and employment forms where you claim you can fire an employee for false information.

The most disturbing aspect of all of this is if you dare fire an employee for fraud, embezzlement, theft, or other such infractions but discover that a fraudulent consultant has come to work at your company you may be subject to wrongful termination liability there as well. In other words, if you or your company won’t deal with the frauds, cons, and cheats that come into your corporate environment through contracts and other means then you may be implicitly waiving any legal ability to enforce those standards on your internal employees. 

Your risks and exposure are far greater than you may think.

The first time a lawyer takes one of these cases where you have done an expensive ERP or IT implementation and it is discovered that one of more of the resources was a fake you may be in serious trouble.  Consider this:

First there is the potential for wrongful termination suits as already mentioned above.

Second there may be personal or individual liability if it can be demonstrated that there was not an adequate amount of due diligence in verifying the skills and experience of the vendor resources.  This exists because if you do any kind of prior employment verification on regular employees but do not do at least a similar amount of verification of the skills and qualifications for high paid vendor resources an argument could be made for negligence.  If it is serious enough, it might be gross negligence. 

Third, even if you win a lawsuit employee morale will be damaged.  The negative employee and public perception from the legal discovery process of finding out just how much you paid to that fake consultant will KILL your career and any future you might have at any company.

Fourth, there may also be U.S. Sarbanes-Oxley implications for any financial performance impacts caused by inexperienced consultants.  Couple this with the potential personal liability for negligence or gross negligence that may obtain and you have a serious mess.

Fifth, you may be subject to corporate liability for terminating, suing, or pressing ANY charges for any employee who has pilfered or stolen anything from you.  If you do not do the same thing for any consultant that a vendor brings to your company.

Sixth, you may still have liability for not taking action against a vendor or placement firm if you find a pattern of their use of fraudulent consultants that is not isolated.

Seventh, back to U.S. Sarbanes-Oxley legislation, it may not be enough to hide behind a vendor or consultant’s liability insurance for supposed “protection” if it can be shown you did not have sufficient controls in place to prevent your company from being defrauded by these con artists and cheats. You may discover that certain exceptions to your own corporate insurance policies will not protect you in the case of this type of “negligence”.

You and your company WILL settle every one of these cases that comes across your desk no matter how ridiculous the claims of the lawyer’s client, your former employer, might be.  See point three (3) above to understand why you will settle every wrongful termination case where anyone who is fired can possibly dig up any consultant on one of those expensive IT projects with a falsified resume. 

During discovery any lawyer can get copies of the consultant resumes and the experience presented by the vendor or consultant for the project. From there it is not a difficult issue for them to make the necessary HR calls to the companies that the consultant lists on their resume to verify all of the experience the consultant listed from every company they supposedly worked at.  And most HR departments will track down information even on contractors if you approach them.  And let me assure you, with the MASSIVE AMOUNT OF FRAUD done on a regular basis they WILL find at least one or two resumes from fake consultants.  And if you weren’t careful during the hiring of a few years ago you may be in deadly serious trouble in your own IT or Engineering departments with lots of fakes and frauds in there as well.  You may quickly discover that your technical departments have several fakes, frauds, and cons.  Are you ready for the fallout?

If this happens you may be in serious trouble.  If it goes to litigation and there is more legal discovery over what your company paid for that fraudulent consultant your career as CFO, CIO, IT Director, or other IT professional is over. 

The worst case scenario is if it is discovered that you fired an employee for theft, embezzlement, or fraud and then took any kind of civil action or made a criminal complaint against them.  You might as well hang it up. 

When it comes out how much that FRAUDULENT CONSULTANT and their fake resume cost per month that you didn’t throw off the project, or take civil action against, or file a criminal complaint against for fraud or embezzlement, your head will be on a silver platter.  Shareholders will be hunting for you and both HR and the legal department will have your number on speed dial.

This is all in addition to the messes and dissappointment that so many companies experience from the lack of expected results all of these frauds and fake resumes have created in the marketplace.  Wonder why your IT projects go over time and over budget? I’d almost be willing to wager that some 75 – 90% OR EVEN MORE of those projects were staffed with several fake consultants with fake experience and fake resumes. Wonder why you’re paying so much for that ERP project and not seeing the desired results?  Wonder no more.

Further Reading:

 How to screen for SAP consultants
Avoid fake SAP resumes, fake SAP experience, and get the experience you pay for.

Screening methods to find the right SAP consultant

Screening Methods to Find the Right Consultant – Part 2


Contact me today through our site contact form ( ), phone, or e-mail.

Bill Wood
+1 (704) 905 – 5175
Bill Wood contact


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5 Responses to “Corporate and Personal Liability for Fake Consultants”

  1. Why don’t firms just do the good old fashioned thing, hire talent, and then nuture/train that talent into the roles/positions they desire?

    Sure seems to be a lot cheaper than hiring a bunch of foreign H1-B workers with falsified resumes, simply to save a few bucks.

    • Truth is, I don’t know. Some of it I chalk up to plain old ignorance. I’ve worked with a lot of well meaning senior IT folks, including some executives, who take on very expensive SAP projects and rely heavily on recruiters or on implementation vendors to do some of the up front background checking.

      • A lot of times, there is not even a savings involved because even though the cosultant is paid peanuts, the firm representing them charges what that resume would actually command. Translation: Everyone loses except the consulting company who is making a killing for no work delivered.

  2. hemen parekh says:

    Background Screening Trends — India
    [ DNA Money / Feb. 02. 2011 ]
    First Advantage is a background screening company. For the resumes that got referred to them for background screening during July – Sept 2010, their findings are as follows :
     10.8 % of these resumes contained some or other discrepancy
     39 % of these provided false info re: company name / employment status / reasons for leaving
     35% gave incorrect tenure
     13 % inflated their designations
     11 % received negative HR / Supervisor feedback
     2 % inflated their compensation
    If the idea is to impress the recruiters, why don’t jobseekers
    simply customize their resumes instead of faking the data ?
    With regards
    hemen parekh
    Jobs for All = Peace on Earth

  3. hemen parekh says:

    Creative Resumes ?
    Writing in The Economic Times ( Jan 8-14,2011 ), Mishita Mehra provides following findings of a report by First Advantage , which conducts 1.5 million background checks per year in India :
     Who lies the most in resumes ?
    • Senior Management ……………………. 2 %
    • Middle Management ……………………. 21 %
    • Associates …………………………………… 65 %
     What do they lie about ?
    • False employment info …………………… 41 %
    • Incorrect tenure ……………………………….. 32 %
    • Inflated designation ………………………… 15 %
     Which Industry have most liars ?
    • Education ………………………………………… 33 %
    • Travel & Hospitality ………………………….. 25 %
    • Bio-Technology …………………………………. 19 %
     Top Resume Cheat list
    • Hong Kong …………………………………………. 47 %
    • Singapore …………………………………………….35 %
    • India ………………………………………………………11 %
    No wonder , Recruiters are saying :
    This is no way to Customize Resume !
    With regards
    hemen Parekh
    Jobs for All = Peace on Earth

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