For people looking for highly-paid executive positions with private equity or venture capital firms, Worldwide Executive Job Search Solutions and PrivateEquityHeadhunters.com claimed to offer the inside track to the suite life. But according to a lawsuit against the companies and Craig Chrest – whom the FTC alleges controls the businesses – the defendants took thousands of dollars from consumers and then engaged in an elaborate charade to hide the fact that the big-money positions didn’t exist.
How did the operation work? According to the complaint, the defendants used social media platforms like LinkedIn to identify people with business or management experience and then sent them messages claiming they were qualified for unadvertised high-paying executive positions. The defendants invited people to call or email if they were interested in the lucrative opportunities.
The websites of Worldwide Executive Job Search Solutions and related companies featured some impressive statistics: a 100% interview rate, a placement rate between 86% and 90%, exclusive relationships with 400 private equity and venture capital firms, and a network of more than 2,400 executive recruiters. Another of the defendants’ sites touted “more than 100 successful placements in the last year,” “a current list of more than 600 deals that are seeking leadership,” and “nearly 100 positions that are actively seeking an executive.” And in a press release, the defendants claimed that the people they had placed in management positions that year earned an average salary of $477,000.
According to the complaint, once the job seeker was in contact with the defendants, he or she was typically included on an email string that had the name of the purported employer, its web address, and the hiring partner’s name and email. A quick web search appeared to verify the existence of the company and the partner.
The lawsuit alleges that to move forward with job placement services or to land an interview, the defendants required consumers to sign a contract and pay an advance recruiting fee of between $1,200 and $2,500. Consumers then got a purported job interview by phone with the hiring partner of the company – often identified as Agile Capital, Rock Hill Capital, or Sienna Ventures. But according to the FTC, after the interview, the defendants usually told the person they didn’t get the job due to a change in the company’s business plans or hiring needs. At the end of the contract period, the defendants sometimes asked for more money for additional services.
According to the lawsuit, the operation was rife with deception. In almost all instances, the consumers didn’t get the job because there was no job in the first place. The defendants hadn’t been retained to find candidates for executive positions, those “interviews” were shams, and even the names of the PE/VC firms were phony. In other instances, the FTC says the defendants used the name of real companies, but didn’t have any relationship with them.
Filed in federal court in Texas, the complaint charges the defendants with violations of the FTC Act and the Telemarketing Sales Rule. A temporary restraining order is in place with a preliminary injunction hearing to follow.
The case is in the early stages, of course, but it’s still a good time to remind consumers to do your research before paying for placement services. Given how easy it is to create fake sites that look legitimate, a quick internet check isn’t enough. Try searching company names along with terms like “fraud” or “scam.” And if you’re interested in hiring a reputable headhunter or job placement firm, get personal recommendations from people you know and trust in your industry.