The last of California's overseas employment agencies--an industry with a record of consumer fraud and persistent client dissatisfaction--has been put out of business, state officials said this week.
"It is a good day," said Jean M. Orr, executive director of the state Bureau of Personnel Services, the regulatory agency that for several years has struggled to curb abuses in the industry.
Shutting its doors was Inter-Global Associates Agency, one of three firms with offices on Wilshire Boulevard in Los Angeles that promised to match job-seekers with positions overseas for fees of as much as $750 per person.
At a hearing on Nov. 18, a federal bankruptcy judge in Los Angeles ordered the firm's assets frozen, after evidence suggested that funds had been diverted to Inter-Global from another of the defunct employment firms, Overseas Careers of California, about the time Overseas Careers filed for bankruptcy in late July.
According to lawyers who were present at the hearing, an attorney for Inter-Global, Earle Hagen, told Bankruptcy Judge Vincent P. Zurzolo that he had advised Inter-Global to halt operations a few days earlier and that the firm intended to file for bankruptcy.
'Received Nothing' From Fees
Hagen did not return a reporter's phone calls. Calls to Inter-Global were answered by a recording stating that "all our representatives are busy."
Several of the principals in Inter-Global, which opened for business late last year, had been associated with Overseas Careers, according to the Bureau of Personnel Services. Officials of the bureau and of Overseas Careers' bankruptcy trustee said about 2,000 former clients have complained that they received nothing for the fees of several hundred dollars each that they had paid the firm.
In March, the bureau had issued a notice of violation against Overseas Careers, charging that it was matching some job-seekers with bogus job prospects.
Jerry Kaplan, an attorney for Overseas Careers, said Wednesday that the company had been a legitimate operation and that there was no evidence of any improper ties between Overseas Careers and Inter-Global.
Earlier, some of Inter-Global's principals and employees had worked for Overseas Careers' archrival, Overseas Unlimited Agency, which closed its doors in June, accused by the Federal Trade Commission of bilking 70,000 or more clients out of at least $25 million.
Exposed on "20/20"
Investigators said Overseas Unlimited had landed jobs for no more than 50 clients in four years. The firm acknowledged isolated instances of misrepresentation but made no formal admission of wrongdoing in agreeing to shut down.
Overseas Unlimited's demise, which followed an expose on the ABC television program "20/20," delivered the deathblow to the industry, Kaplan said.
"From that point on, none of these businesses in California could succeed, because the overall publicity of that company colored the entire industry," Kaplan said Wednesday.
Richard Malatt, the attorney for Overseas Careers' bankruptcy trustee, said he was pleased that the overseas agencies had been put out of business but feared that the industry would revive.
"The worry with these kinds of places is that they open up under another name somewhere, and you're just constantly chasing them," Malatt said.
Probation Violation Charged
The owner of Overseas Unlimited, convicted swindler Michael B. Marks of Canyon Country, was in federal court in Los Angeles this week, fighting to stay out of jail.
Marks, who pleaded guilty to a felony mail fraud charge in January, 1987, is accused of violating his probation in that case by fabricating the existence of an international construction company and then matching Overseas Unlimited clients with phony jobs at the sham company.
In testimony Tuesday before Chief U.S. Dist. Judge Manuel L. Real, Marks, 48, said he believed the non-existent company was a hoax perpetrated by his rivals at Overseas Careers in hopes of sabotaging Overseas Unlimited. He said he accepted the phony job orders unknowingly.
Witnesses called by Assistant U.S. Atty. David A. Katz testified that Marks set up phone answering and mail service for the supposed construction company and was seen in his office preparing letters to clients on the bogus firm's stationery.
When the hearing resumes next week, Real could order Marks to complete a five-year jail term on the earlier mail fraud conviction.