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I-Team Special Report: Hiring Felons

Updated: Friday, May 23, 2014 |
I-Team Special Report: Hiring Felons story image
(NEWSCHANNEL 3) - The Newschannel 3 I-Team is shining a light on an alarming issue.

Within the last decade, Michigan lawmakers passed very strict rules protecting some of our most vulnerable people--homebound patients who are sick or elderly.

The laws we're talking about prevent felons from immediately entering the workforce into the home health care field after they've finished doing time in prison.

Thursday, the I-Team presents the results of an investigation that is now prompting a state investigation.

Alliance Home Health Services, based on Miller Road in Kalamazoo, is a company that sends care providers out to the homes of homebound patients.

The I-Team investigation corroborated what multiple sources have told us for months--that a woman currently working for the home health care company is a felony habitual offender.

From Michigan State Police records, the rap sheet on the woman:

  • Felony attempted breaking and entering
  • Felony larceny
  • Felony stealing
  • Felony credit card theft
  • Felony prison escape

Then, we heard from Jennifer Fleeman, her past supervisor at Alliance Home Health Services.

"My concern was for her working with social security numbers," she said.

Fleeman says Medicare numbers, which in many cases are social security numbers, were readily available to all employees at the company.

She says all the workers--many of them telemarketers--had to collect the information to ensure the patient would qualify for Medicare homebound medical service.

"I still miss it, being able to work with so many elderly people and make them so happy," Fleeman said.

After she left the company in May 2013, Fleeman says the woman in question got promoted and actually took Fleeman's job as a supervisor.

We wanted to find out if the woman was still working at Alliance with direct access to patient information, so we went to the address we confirmed from multiple sources as the company's marketing headquarters.

And we ended up right at the woman's door--which was promptly slammed in our face.

She didn't tell us anything about her apparent current employment with Alliance, but through state documents we did find a reason why she might have locked the door on the I-Team.

Through the Freedom of Information Act, we found that she was disqualified from working in home health care in 2012, but somehow continued working even as the people inside the company promised state regulators last year that she was "not an employee anymore."

In this case, state documents show that she has to wait until 2019 to work at a home health agency.

By law, most felons have to wait 10 years after they're out of the justice system to get in the field--some have to wait 15 years if they've done time for things like criminal sexual conduct and abuse.

Those with qualifying misdemeanor convictions even have to sit out five years.

So we turned to the man who created and owned Alliance Home Health Services from 2006 up until February 2014, Mark Cataldo.

We walked straight into his office at Alliance, and he escorted us out of the building, then waited to hit the road in his vehicle.

After deciding he didn't want to drive away, he got out of his car and walked back inside.

Before he left us, we asked point blank if he had a person with a felony background handling information.

He closed the door on us.

But it seems Cataldo shut the door on us at about the same time regulators at the State Department of Licensing and Regulatory Affairs opened one for us, to find out what we know about the company.

After we told LARA Director for Health Facilities Larry Horvath what we knew, he promised he would, "determine whether that allegation has substantial information that shows that the provider is willfully and knowingly violating the law."

Horvath says there's punishment in the law for executives at home health agencies that don't follow laws in the public health code.

"A home health agency must stay compliant with state law, so if we found that they are in violation of this part of the act which requires background checks and they and knowingly and willingly violate them--part of this--and we found them in noncompliance with this, we could cite them," Horvath said. "That would risk their federal certification and participation in medicare."

Horvath did this interview with us last week.

Since then, state regulators tell Newschannel 3 that they've investigated the allegations to which we alerted them, and they've forwarded the results of their investigation on for possible prosecution and action.

Carole Engle, Director of Michigan's Bureau of Health Care Services wrote in an email to Newschannel 3:

"The bureau takes these allegations very seriously and after reviewing the information provided, we have referred this matter to the state Attorney General for a more formal investigation and potential enforcement action. We thank the WWMT I-Team for sharing their information with us."

We're told that Alliance has at least 150 patients in multiple counties across West Michigan.

Records show Alliance's former owner, Cataldo, transferred the company in February to one of the company's managers, Patrick Dizon.

This week, we tried contacting Cataldo again, and also tried to contact Dizon.

Neither responded to requests for comment.

In addition to this investigation, there is another home health care company in West Michigan named Alliance.

It's called Alliance Home Health Care Services Inc. and it's based in Holland.

We're not talking about that company at all; this investigation centered around Alliance Home Health Services, which is based in Kalamazoo.
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Business News

Last Update on October 30, 2014 07:33 GMT

ECONOMY-THE DAY AHEAD

WASHINGTON (AP) -- The Labor Department will report today on the number of people who applied for unemployment benefits last week. Economists forecast that weekly applications declined 2,000 to a seasonally adjusted 281,000.

Also today, the Commerce Department will release third-quarter gross domestic product figures. Many economists predict that overall growth of the economy, as measured by the gross domestic product, reached a healthy 3 percent annual rate in the July-September quarter, according to a survey by data firm FactSet.

Freddie Mac will report on average mortgage rates for this week. Last week, the average for the 30-year loan slid to 3.92 percent.

There are four major companies that will report earnings today.

Altria Group and Mastercard will report quarterly financial results before the market opens.

Starbucks and LinkedIn Corp. will report quarterly earnings after the closing bell.

EARNS-SAMSUNG ELECTRONICS

SEOUL, South Korea (AP) -- Samsung Electronics Co. says its third-quarter income has plunged 49 percent to the lowest level in nearly three years as its handset business slows down.

Samsung says its net income for the July-September quarter was 4.2 trillion won ($4 billion), a sharp decline from 8.2 trillion won a year earlier. The income was the lowest since 2012 but above market expectations. Analysts polled by Factset expected 3.7 trillion won income.

Sales fell 20 percent to 47.4 trillion won while operating income shrank 60 percent to 4.1 trillion won.

Samsung warned earlier this month that its handset profit declined despite a marginal shipment increase. Analysts said the Galaxy S5 smartphone launched in April did not sell well while many consumers held off upgrading their phones, instead waiting for new iPhones.

CHINA-CREDIT CARDS

BEIJING (AP) -- China's Cabinet says it will ease restrictions on credit card processing in a move that might help to resolve a lengthy dispute with the United States over access for Visa, Mastercard and other foreign competitors.

A Cabinet announcement said "all qualified domestic and overseas enterprises" will be allowed to apply to set up credit card clearing operations. It gave no details of what qualifications would be required for a foreign competitor to be approved.

Beijing's restrictions have given a near-monopoly on credit card processing to a state-owned entity, UnionPay.

The World Trade Organization ruled two years ago the restrictions treated foreign competitors unfairly. The government said it would review the decision but did little to increase market access.

FACEBOOK-WHATSAPP FOUNDERS

SAN FRANCISCO (AP) -- WhatsApp founders Jan Koum and Brian Acton received 116 million shares of Facebook stock currently worth nearly $9 billion when they sold their mobile messaging service to the social networking leader earlier this month.

The breakdown of the big winners in Facebook Inc.'s $22 billion acquisition emerged Wednesday in a regulatory filing.

Koum, a Ukraine immigrant who was once living on welfare, reaped the biggest jackpot with 76.4 million Facebook shares now worth $5.8 billion. That makes him Facebook's fourth largest stockholder behind company CEO Mark Zuckerberg and two mutual funds, Fidelity Management and Vanguard.

Acton, who worked with Koum when they were both Yahoo Inc. engineers, owns 39.7 million Facebook shares worth $3 billion.

More than 45 other WhatsApp current and former employees also received Facebook stock.

FOR-PROFIT COLLEGES

WASHINGTON (AP) -- For-profit colleges that don't produce graduates capable of paying off their student loans could soon face the wrath of the federal government.

Schools with career-oriented programs that fail to comply with the new rule being announced today by the Obama administration stand to lose access to federal student-aid programs.

To meet these "gainful employment" standards, a program will have to show that the estimated annual loan payment of a typical graduate doesn't exceed 20 percent of discretionary income, or 8 percent of total earnings.

The Education Department estimates that about 1,400 programs serving 840,000 students won't pass. Nearly all of these programs are offered by for-profit schools.

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WASHINGTON (AP) -- Supreme Court justices have their first chance this week to decide whether they have the appetite for another major fight over President Barack Obama's health care law.

Some of the same players who mounted the first failed effort to kill the law altogether now want the justices to rule that subsidies that help millions of low- and middle-income people afford their premiums under the law are illegal.

The challengers are appealing a unanimous ruling of a three-judge panel of the federal appeals court in Richmond, Virginia, that upheld Internal Revenue Service regulations that allow health-insurance tax credits under the Affordable Care Act for consumers in all 50 states. The appeal is on the agenda for the justices' private conference on Friday, and word of their action could come as early as Monday.

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DETROIT (AP) -- The U.S. government's auto safety agency, responding to criticism of its slow response to safety issues, has told the manufacturer of millions of potentially faulty air bags to make replacement parts faster and do more testing to find the cause of the problem.

The National Highway Traffic Safety Administration sent letters Wednesday to Japanese air bag maker Takata Corp. and 10 automakers seeking information in a widening air bag recall that now covers almost 8 million U.S. vehicles.

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