After William Schmidt lost his job as part of a mass layoff from a Columbus, OH auto parts distributor in 2009, several colleagues who had also lost their jobs asked him if he would act as a reference and fib about whether they were still employed. He obliged and was pleased when his friends found new jobs.
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That gave Schmidt, 50, an idea: He could start a company that would provide fake references for job seekers. He decided to give it a try and set up a website called CareerExcuse.com. Within days, he says, he had multiple clients. Though he admits he’s built a business based on lies, he says he feels justified because his “members” so need his services. “I’ve heard so many horror stories from people,” he says. “They have obligations, especially with child support. They tell me they’ve lost their marriages and their jobs and they’re in bankruptcy.” He says he feels compelled to help. “I’ve taken one or two people for free,” he adds. “I felt so freakin’ sorry for them.”
Though Schmidt says he got rehired by the auto parts distributor after just nine months (he won’t name the company because he claims his employer doesn’t know he’s running a business on the side), by that time he had dozens of members and people were already depending on him. Since then he’s honed the operation, which he runs by himself together with three independent contractors who he says have experience in human resources.
Here is how it works: First prospective members fill out an online form where they specify what kind of fake job they want the site to portray (accounting, sales, IT, engineering, etc.), and information like job title, supervisor’s title, start and end date for the phony job and salary. Members get a three-day free trial, after which they pay either $150 for Schmidt to set up a new, fictitious company, or $50 to use one of the “virtual” companies he has already created. Then the fee is $50 a month.
To create a fake company, Schmidt uses domain name service GoDaddy, buying a URL that also serves as a source for email addresses. He buys phone numbers from a company like Onebox or RingCentral that provide cloud-based phone services and 800 numbers, regular numbers that sound like land lines and voicemail. He also uses a live answering service so callers can get through to a human being. Each time CareerExcuse fields a reference contact, it gets in touch with the member.
Members are best off, he says, if they start working with CareerExcuse before they’ve finished their résumé, so that they can include the fake company to either plug a hole or be the last place they worked.
After nearly five years at it, Schmidt says he knows what to anticipate from employers or staffing firms like Robert Half. “For most of the companies the questions are boilerplate,” he says: They simply check employment dates, job title, salary and responsibilities. Since some employers ask more questions about things like an applicant’s strengths, weaknesses and major accomplishments, Schmidt has developed a 50-point questionnaire for members. But often he doesn’t bother looking at the answers. A typical response to a question about an applicant’s greatest weakness: He doesn’t delegate enough to subordinates and tries to take on too much responsibility. In other words, a weakness that could also be read as a strength.
Schmidt says his ruse has never been discovered by an employer and that in the last year, 90% of his members landed jobs within 90 days. He has a law firm on retainer and has made sure that none of his practices run afoul of unfair trade practice laws. He’s not vulnerable to criminal fraud statutes because his scam doesn’t involve cheating anyone out of money.
I checked in with Daniel O’Meara, chairman of the employment law department at Montgomery, McCracken, Walker & Rhoads, and he points out that in a civil suit, Schmidt is probably “judgment proof,” because he is not a deep-pocketed corporation. O’Meara adds that most employees sign a line in their employment agreement that says they didn’t lie during the application process. If a boss finds out they used a phony reference, that’s grounds for firing.
Schmidt won’t give a fake reference from a real company like Coca-Cola or Lockheed. He’s turned away potential clients who wanted positive references from real companies because their supervisors were down on them. “To me that’s fraud, because you’re representing a real company, which you’re not,” he says without a hint of irony.
It’s illegal to give a reference to a government employee, including firefighters and police officers. Schmidt says he doesn’t want to help anyone with a false reference whose jobs might hold someone’s life in the balance, like hospital workers, nurses and doctors. He also won’t give references for loans, presumably because that could run afoul of fraud laws. Sometimes he just feels uncomfortable about a member, like the time someone wanted a reference that had to do with an airline. When I pressed Schmidt about why he turned that member away and refunded his money, he just said, vaguely, “It could jeopardize…the things that happened with 9/11.”
Though it’s ticked along with no problems, except, early on, several inquiries from state attorneys general, which Schmidt’s lawyers helped him handle, Schmidt hasn’t felt a need to expand CareerExcuse. He says he’s had a lot of international members from India, the UK, China and even a member from Poland, who want to show that they’ve had US job experience. This year he had around 120 members and revenues of just $25,000.
I didn’t do an exhaustive search,but it’s my sense that Schmidt is a lone wolf in a small, murky corner of the employment world. I couldn’t find any competitors that were alive and kicking. Schmidt says that a former employee started The Reference Store, but when I called the U.S. phone number, I got a FAX tone. I tried the big HR trade association, the Society of Human Resource Management, and the spokeswoman sent me an article from a SHRM publication that mentioned CareerExcuse, The Reference Store and another company AlibiHQ, which launched in 2008 and produced fake doctor’s notes and other false documents, including fake invitations to parties and weddings. It’s since gone out of business.
Why is Schmidt sticking around? He says he doesn’t want to let down his members. “I have a full-time job,” he says. “I don’t need the money. But even though I could refund everyone’s money and quit tomorrow, I feel obligated now because these people depend on me.” But does he really feel good about helping people lie? “People ask, ‘How can you live with yourself, lying all the time?’” he says. “I’m not the one who’s really lying. It’s the members who are choosing to do this. I’m following their script. I haven’t twisted anyone’s arm. I don’t advertise my service. The only way they can find me is if they Google ‘fake reference’ or ‘job reference.’” But then, oddly, he goes on to say, “I know there is a huge moral issue with what I’m doing.” When I point out that his reasoning is circular, he concedes, “I’m helping people to lie and that’s my service. So how do people know that my service isn’t one big lie? That’s the circular problem I’m always goi
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