Global Security Inc., the latest incarnation of a 13-year-old scheme in which job applicants are enticed to work without wages and pay up to $12,000 in fees, has gone the way of its predecessors, closing its doors in the wake of scrutiny by news media, private lawsuits and government investigators.
"We're out of business," said co-owner Paul W. Janoski, "and we're not opening anytime soon, or ever again."
Investigations of the company, by the attorneys general of Maryland and Pennsylvania, are still in business, however. So are private lawsuits filed against the company in Baltimore and Prince George's counties.
But Maryland's U.S. attorney, Lynne A. Battaglia, has decided not to pursue a federal criminal investigation, and the Federal Trade Commission, which also took an interest in the case, probably won't act unless the scheme is resurrected.
While Janoski says that won't happen, history indicates otherwise. He and Global Security's other owner and founder, Robert W. Hironimus, previously worked for at least three other almost identical companies, including the one that originated the scheme in 1986, a Lexington, Ky., firm known as Safety Plus.
Safety Plus, like the copycat firms that followed, purported to make its money by selling home safety equipment such as fire extinguishers. But most of its salespeople were no-wage job applicants who believed they were working their way toward management positions that would eventually pay $15 an hour. Instead, the salespeople usually did most of the paying, sometimes giving the company thousands of dollars in start-up fees for jobs that often failed to materialize.
When those tactics got Safety Plus into trouble with government investigators in 1991, Janoski and Hironimus went to work for a new, almost identical operation, International Safety Management. It, too, ran into trouble, losing a lawsuit in Virginia and a criminal prosecution in Carroll County in the summer of 1996.
So, in September 1996, Janoski and Hironimus incorporated Global Security in Lancaster, Pa., patterning the operation after International Safety Management, right down to the wording in its sales manuals. The company opened offices in Glen Burnie, Laurel and Towson, attracting job applicants with newspaper ads promising $15 an hour for new office managers.
According to former employees and job applicants, Global Security worked like this:
Applicants paid $75 apiece for a "background check" -- which almost never occurred -- plus $95 apiece for a sales kit containing a small fire extinguisher, matches, a cup, lighter fluid and a pie plate. They began weeks of "training" for no pay, during which they were expected to sell at least $2,000 worth of safety equipment, although customers often never got any merchandise. Trainees who dropped out weren't paid a dime. Those who finished found they would have to pay a "deposit" of up to $12,000 to become an office manager, but even that sometimes didn't guarantee either an office or a paycheck. Those who did get offices had to make their money the way that Janoski and Hironimus did -- by enticing job applicants to pay fees and sell merchandise.
In July, Civil Justice Inc., a public interest legal organization in Baltimore, filed a class-action suit in Prince George's County against Global Security on behalf of several hundred plaintiffs. Towson attorney Nevett Steele Jr. filed suit the following month in Baltimore County on behalf of five more plaintiffs.
The consumer protection division of the Pennsylvania Attorney General then began looking into complaints against the company, and on Aug. 8 The Sun published a lengthy story detailing the company's tactics and corporate ancestry.
The following week, the company shut down its Glen Burnie and Towson offices, noting "bad publicity," and several Pennsylvania newspapers stopped running the company's job employment advertisements.
Government help needed
On Aug. 30, Janoski wrote the Better Business Bureau of Pennsylvania that the company was out of business. He confirmed that this week in a telephone interview with The Sun, adding, "I have no comments on anything further."
The U.S. attorney, meanwhile, has decided not to pursue the case, partly because of the active state investigations and the pending lawsuits.
Assistant U.S. Attorney Dale P. Kelberman noted in a letter to Steele on Sept. 3 that Maryland's consumer protection division was "looking into this matter for possible violations of the State's false advertising statutes," and said those statutes "are more appropriate than the potential federal mail and/or wire fraud statutes, which require the government to prove a deprivation of 'property.' "
Steele said he was disappointed by the decision.
"Based on what our investigation has shown us, these guys are going to resurface if somebody doesn't take action," he said. "So I still feel that we need governmental help."
Pub Date: 9/10/99