How Simple Due Diligence Could Have Saved 20 Lives

The deadly limo accident in Schoharie, N.Y, provides a somber reminder of the value of performing due diligence and conducting background investigations.
By: | October 22, 2018 • 6 min read

As details are revealed about the deadliest U.S. transportation crash in a decade, several tragic truths have started to come out, too.

In fact, many safety violations and prior criminal convictions have since been reported, all coming back to Prestige Limousine Chauffeur Service; its owner, Shahed Hussain; its operator, Nauman Hussain; and the limo’s driver, Scott Lisinicchia.

Advertisement




Any and all of these facts might have given the victims pause had they been aware.

As with any heartbreaking loss of life, it is vital to consider the red flags that could have prevented the deadly accident in Schoharie, New York, which took 20 lives. This tragic accident happened just 40 miles west of our corporate headquarters. I (and several of my employees) personally know or have worked with family members related to the young men and women involved in this terribly sad incident.

I felt compelled to write about what, if anything, can be done to protect the public and the due diligence procedures employers can implement to potentially prevent a tragedy in the future.

Performing due diligence and conducting background investigations is vital for companies that provide services to the public, offer transportation options or are hiring employees to work for them. Consumers and employers alike need to be aware the highest level of safety and security can only be obtained by conducting investigations prior to hiring an employee or a company to provide services.

In many instances, something as simple as a Google search or check of a company’s online reviews can turn up relevant details.

Consider the following information that has come to light following the tragic crash in Schoharie. The limousine involved in the accident, which replaced a broken-down “party bus” initially reserved by the victims, was a 2001 Ford Excursion. The limo, booked hurriedly and at the last minute due to the breakdown of the preferred vehicle, had not been properly converted to a stretch limo. Since the limo was altered after leaving the factory, it skirted the tough safety guidelines it should have otherwise met, making it unsafe to drive.

Consumers and employers alike need to be aware the highest level of safety and security can only be obtained by conducting investigations prior to hiring an employee or a company to provide services. In many instances, something as simple as a Google search or check of a company’s online reviews can turn up relevant details.

In addition, the New York State Department of Transportation and September 2018 federal records deemed the limousine unfit for use. At that time, the vehicle was placed out of service and the owner was warned not to operate the vehicle.

In addition, according to the federal Motor Carrier Safety Administration, the vehicle was improperly classified given the number of seats it contained. Limousines can only have between 9 and 15 passengers, including the driver. Any automobile capable of carrying more, like this one, would need to be classified as a bus.

In details that have been revealed since the crash, New York State Governor Mario Cuomo revealed that the vehicle’s chassis, suspension and brakes were all unsafe. Furthermore, federal records show the company had four vehicles taken out of service after undergoing five inspections in the last two years, a whopping 80 percent failure rate.

Tragically, text messages that have been made public since the crash reveal that some of the victims complained about the shoddy condition of the vehicle and the loud noises they heard coming from the engine while they were en route to their destination.

Cuomo has also reported that the limousine driver, Scott Lisinicchia, did not have the proper commercial driver license (CDL) with a passenger endorsement that would be required to operate the vehicle. In addition, the driver had been charged with unlawful possession of marijuana in 2010. After being pulled over during a traffic stop in 2013, Lisinicchia was charged with criminal possession of a controlled substance, unlawful possession of marijuana and an equipment violation.

Prestige Limousine Chauffeur Service had plenty of issues of its own. The company’s owner, Shahed Hussain, fled Pakistan in 1994 after being arrested for murder. He was able to escape, because his father paid a bribe of $1,350, allowing him to leave with a human trafficker and travel first from Moscow to Mexico and then into the United States. Hussain used a fake British passport to achieve this, according to court testimony heard in 2010.

Once settled in Albany, N.Y., Hussain was involved in a scheme where he conspired with a crooked DMV employee to sell fake driver licenses to immigrants. Instead of facing up to 25 years in prison and a $250,000 fine for the federal fraud crime, he only paid a $100 fine and served no time, because he became an FBI informant. His work with the FBI led to the controversial arrest and conviction of several suspected terrorists.

Advertisement




In 2006, Hussain purchased a dilapidated motel and was sued for taking reservation money for unavailable rooms. In 2017, this property, the Crest Inn Suites and Cottages in Gansevoort, New York, failed two building inspections and was cited for several violations, including improper fittings and lack of support for the waste lines. At that time, all residents were forced to evacuate.

Hussain is believed to be back in Pakistan, but his son, Nauman Hussain, was arrested after the accident on charges of criminally negligent homicide. Nauman Hussain was caught by police in what appeared to be an attempt to flee in a vehicle filled with his personal belongings.

What can be done to prevent this sort of horrific incident?

Thorough personal research before committing to work done by contractors, maintenance workers or rentals of any kind is critical. It pays to be informed. Peruse Google, Yelp, Facebook, TripAdvisor, Angie’s List and other websites that might provide reviews of a company and listen to your gut. Speak to others who have used the companies you are considering and ask for their opinions. If something strikes you as problematic, absolutely do not move forward.

We recommend any company involved in the transportation industry conduct the following background investigation searches:

  • Social Security and Address History Searches
  • Statewide, Federal and Criminal Searches
  • DMV Searches — reveals past violations or issues of licensure
  • Foreign Assets Control (OFAC) — ensures companies aren’t doing business with firms being sanctioned by the U.S. or individuals involved in terrorism, narcotics and/or other disreputable activities
  • Infinity Screening — periodic post-employment background investigations
  • E-Verify — verifies an applicant’s legal eligibility to work in the U.S.
  • Drug Screening
  • Employment Verification
  • Department of Transportation Verification — provides an applicant’s driving position safety performance history within the last 3 years
  • Vendor Integrity Investigations — critical if you are hiring subcontractors on behalf of your place of employment
  • Social Media Investigations — conducted on an ongoing basis, social media investigations provide a wealth of knowledge
  • For New York State companies, we also recommend License Event Notification System (LENS) — automated reporting system that sends ongoing license record changes, such as accidents and convictions, by email

If something does turn up during the course of an investigation, you can use your judgment to determine whether it is a deal-breaker given your circumstances. Having this information on your side is critical, however, in protecting the well-being of your customers, employees, friends and family. It’s also essential when it comes to reducing your liability as a business owner. &

Mario Pecoraro is President and CEO of Alliance Worldwide Investigative Group Inc., which specializes in background screening and insurance fraud investigations and has grown into a national/international investigative firm with a variety of services including pre- and post-employment screening customizable to any industry. He is also owner of sister company, Avvocato Litigation Support International, Inc., which is powered by Alliance Worldwide Investigative Group, providing attorneys and law firms all forms of legal support. In addition, Preferred Adjustment Company, powered by Alliance, provides full service claims handling and property/casualty adjusting services for insurance carriers, self-insured companies and attorneys. Mario can be reached at [email protected] For more information visit our website at www.allianceinvestigative.com.

Exclusive | Hank Greenberg on China Trade, Starr’s Rapid Growth and 100th, Spitzer, Schneiderman and More

In a robust and frank conversation, the insurance legend provides unique insights into global trade, his past battles and what the future holds for the industry and his company.
By: | October 12, 2018 • 12 min read

In 1960, Maurice “Hank” Greenberg was hired as a vice president of C.V. Starr & Co. At age 35, he had already accomplished a great deal.

He served his country as part of the Allied Forces that stormed the beaches at Normandy and liberated the Nazi death camps. He fought again during the Korean War, earning a Bronze Star. He held a law degree from New York Law School.

Advertisement




Now he was ready to make his mark on the business world.

Even C.V. Starr himself — who hired Mr. Greenberg and later hand-picked him as the successor to the company he founded in Shanghai in 1919 — could not have imagined what a mark it would be.

Mr. Greenberg began to build AIG as a Starr subsidiary, then in 1969, he took it public. The company would, at its peak, achieve a market cap of some $180 billion and cement its place as the largest insurance and financial services company in history.

This month, Mr. Greenberg travels to China to celebrate the 100th anniversary of C.V. Starr & Co. That visit occurs at a prickly time in U.S.-Sino relations, as the Trump administration levies tariffs on hundreds of billions of dollars in Chinese goods and China retaliates.

In September, Risk & Insurance® sat down with Mr. Greenberg in his Park Avenue office to hear his thoughts on the centennial of C.V. Starr, the dynamics of U.S. trade relationships with China and the future of the U.S. insurance industry as it faces the challenges of technology development and talent recruitment and retention, among many others. What follows is an edited transcript of that discussion.


R&I: One hundred years is quite an impressive milestone for any company. Celebrating the anniversary in China signifies the importance and longevity of that relationship. Can you tell us more about C.V. Starr’s history with China?

Hank Greenberg: We have a long history in China. I first went there in 1975. There was little there, but I had business throughout Asia, and I stopped there all the time. I’d stop there a couple of times a year and build relationships.

When I first started visiting China, there was only one state-owned insurance company there, PICC (the People’s Insurance Company of China); it was tiny at the time. We helped them to grow.

I also received the first foreign life insurance license in China, for AIA (The American International Assurance Co.). To date, there has been no other foreign life insurance company in China. It took me 20 years of hard work to get that license.

We also introduced an agency system in China. They had none. Their life company employees would get a salary whether they sold something or not. With the agency system of course you get paid a commission if you sell something. Once that agency system was installed, it went on to create more than a million jobs.

R&I: So Starr’s success has meant success for the Chinese insurance industry as well.

Hank Greenberg: That’s partly why we’re going to be celebrating that anniversary there next month. That celebration will occur alongside that of IBLAC (International Business Leaders’ Advisory Council), an international business advisory group that was put together when Zhu Rongji was the mayor of Shanghai [Zhu is since retired from public life]. He asked me to start that to attract foreign companies to invest in Shanghai.

“It turns out that it is harder [for China] to change, because they have one leader. My guess is that we’ll work it out sooner or later. Trump and Xi have to meet. That will result in some agreement that will get to them and they will have to finish the rest of the negotiations. I believe that will happen.” — Maurice “Hank” Greenberg, chairman and CEO, C.V. Starr & Co. Inc.

Shanghai and China in general were just coming out of the doldrums then; there was a lack of foreign investment. Zhu asked me to chair IBLAC and to help get it started, which I did. I served as chairman of that group for a couple of terms. I am still a part of that board, and it will be celebrating its 30th anniversary along with our 100th anniversary.

Advertisement




We have a good relationship with China, and we’re candid as you can tell from the op-ed I published in the Wall Street Journal. I’m told that my op-ed was received quite well in China, by both Chinese companies and foreign companies doing business there.

On August 29, Mr. Greenberg published an opinion piece in the WSJ reminding Chinese leaders of the productive history of U.S.-Sino relations and suggesting that Chinese leaders take pragmatic steps to ease trade tensions with the U.S.

R&I: What’s your outlook on current trade relations between the U.S. and China?

Hank Greenberg: As to the current environment, when you are in negotiations, every leader negotiates differently.

President Trump is negotiating based on his well-known approach. What’s different now is that President Xi (Jinping, General Secretary of the Communist Party of China) made himself the emperor. All the past presidents in China before the revolution had two terms. He’s there for life, which makes things much more difficult.

R&I: Sure does. You’ve got a one- or two-term president talking to somebody who can wait it out. It’s definitely unique.

Hank Greenberg: So, clearly a lot of change is going on in China. Some of it is good. But as I said in the op-ed, China needs to be treated like the second largest economy in the world, which it is. And it will be the number one economy in the world in not too many years. That means that you can’t use the same terms of trade that you did 25 or 30 years ago.

They want to have access to our market and other markets. Fine, but you have to have reciprocity, and they have not been very good at that.

R&I: What stands in the way of that happening?

Hank Greenberg: I think there are several substantial challenges. One, their structure makes it very difficult. They have a senior official, a regulator, who runs a division within the government for insurance. He keeps that job as long as he does what leadership wants him to do. He may not be sure what they want him to do.

For example, the president made a speech many months ago saying they are going to open up banking, insurance and a couple of additional sectors to foreign investment; nothing happened.

The reason was that the head of that division got changed. A new administrator came in who was not sure what the president wanted so he did nothing. Time went on and the international community said, “Wait a minute, you promised that you were going to do that and you didn’t do that.”

So the structure is such that it is very difficult. China can’t react as fast as it should. That will change, but it is going to take time.

R&I: That’s interesting, because during the financial crisis in 2008 there was talk that China, given their more centralized authority, could react more quickly, not less quickly.

Hank Greenberg: It turns out that it is harder to change, because they have one leader. My guess is that we’ll work it out sooner or later. Trump and Xi have to meet. That will result in some agreement that will get to them and they will have to finish the rest of the negotiations. I believe that will happen.

R&I: Obviously, you have a very unique perspective and experience in China. For American companies coming to China, what are some of the current challenges?

Advertisement




Hank Greenberg: Well, they very much want to do business in China. That’s due to the sheer size of the country, at 1.4 billion people. It’s a very big market and not just for insurance companies. It’s a whole range of companies that would like to have access to China as easily as Chinese companies have access to the United States. As I said previously, that has to be resolved.

It’s not going to be easy, because China has a history of not being treated well by other countries. The U.S. has been pretty good in that way. We haven’t taken advantage of China.

R&I: Your op-ed was very enlightening on that topic.

Hank Greenberg: President Xi wants to rebuild the “middle kingdom,” to what China was, a great country. Part of that was his takeover of the South China Sea rock islands during the Obama Administration; we did nothing. It’s a little late now to try and do something. They promised they would never militarize those islands. Then they did. That’s a real problem in Southern Asia. The other countries in that region are not happy about that.

R&I: One thing that has differentiated your company is that it is not a public company, and it is not a mutual company. We think you’re the only large insurance company with that structure at that scale. What advantages does that give you?

Hank Greenberg: Two things. First of all, we’re more than an insurance company. We have the traditional investment unit with the insurance company. Then we have a separate investment unit that we started, which is very successful. So we have a source of income that is diverse. We don’t have to underwrite business that is going to lose a lot of money. Not knowingly anyway.

R&I: And that’s because you are a private company?

Hank Greenberg: Yes. We attract a different type of person in a private company.

R&I: Do you think that enables you to react more quickly?

Hank Greenberg: Absolutely. When we left AIG there were three of us. Myself, Howie Smith and Ed Matthews. Howie used to run the internal financials and Ed Matthews was the investment guy coming out of Morgan Stanley when I was putting AIG together. We started with three people and now we have 3,500 and growing.

“I think technology can play a role in reducing operating expenses. In the last 70 years, you have seen the expense ratio of the industry rise, and I’m not sure the industry can afford a 35 percent expense ratio. But while technology can help, some additional fundamental changes will also be required.” — Maurice “Hank” Greenberg, chairman and CEO, C.V. Starr & Co. Inc.

R&I:  You being forced to leave AIG in 2005 really was an injustice, by the way. AIG wouldn’t have been in the position it was in 2008 if you had still been there.

Advertisement




Hank Greenberg: Absolutely not. We had all the right things in place. We met with the financial services division once a day every day to make sure they stuck to what they were supposed to do. Even Hank Paulson, the Secretary of Treasury, sat on the stand during my trial and said that if I’d been at the company, it would not have imploded the way it did.

R&I: And that fateful decision the AIG board made really affected the course of the country.

Hank Greenberg: So many people lost all of their net worth. The new management was taking on billions of dollars’ worth of risk with no collateral. They had decimated the internal risk management controls. And the government takeover of the company when the financial crisis blew up was grossly unfair.

From the time it went public, AIG’s value had increased from $300 million to $180 billion. Thanks to Eliot Spitzer, it’s now worth a fraction of that. His was a gross misuse of the Martin Act. It gives the Attorney General the power to investigate without probable cause and bring fraud charges without having to prove intent. Only in New York does the law grant the AG that much power.

R&I: It’s especially frustrating when you consider the quality of his own character, and the scandal he was involved in.

In early 2008, Spitzer was caught on a federal wiretap arranging a meeting with a prostitute at a Washington Hotel and resigned shortly thereafter.

Hank Greenberg: Yes. And it’s been successive. Look at Eric Schneiderman. He resigned earlier this year when it came out that he had abused several women. And this was after he came out so strongly against other men accused of the same thing. To me it demonstrates hypocrisy and abuse of power.

Schneiderman followed in Spitzer’s footsteps in leveraging the Martin Act against numerous corporations to generate multi-billion dollar settlements.

R&I: Starr, however, continues to thrive. You said you’re at 3,500 people and still growing. As you continue to expand, how do you deal with the challenge of attracting talent?

Hank Greenberg: We did something last week.

On September 16th, St. John’s University announced the largest gift in its 148-year history. The Starr Foundation donated $15 million to the school, establishing the Maurice R. Greenberg Leadership Initiative at St. John’s School of Risk Management, Insurance and Actuarial Science.

Hank Greenberg: We have recruited from St. John’s for many, many years. These are young people who want to be in the insurance industry. They don’t get into it by accident. They study to become proficient in this and we have recruited some very qualified individuals from that school. But we also recruit from many other universities. On the investment side, outside of the insurance industry, we also recruit from Wall Street.

R&I: We’re very interested in how you and other leaders in this industry view technology and how they’re going to use it.

Hank Greenberg: I think technology can play a role in reducing operating expenses. In the last 70 years, you have seen the expense ratio of the industry rise, and I’m not sure the industry can afford a 35 percent expense ratio. But while technology can help, some additional fundamental changes will also be required.

R&I: So as the pre-eminent leader of the insurance industry, what do you see in terms of where insurance is now and where it’s going?

Hank Greenberg: The country and the world will always need insurance. That doesn’t mean that what we have today is what we’re going to have 25 years from now.

How quickly the change comes and how far it will go will depend on individual companies and individual countries. Some will be more brave than others. But change will take place, there is no doubt about it.

Advertisement




More will go on in space, there is no question about that. We’re involved in it right now as an insurance company, and it will get broader.

One of the things you have to worry about is it’s now a nuclear world. It’s a more dangerous world. And again, we have to find some way to deal with that.

So, change is inevitable. You need people who can deal with change.

R&I:  Is there anything else, Mr. Greenberg, you want to comment on?

Hank Greenberg: I think I’ve covered it. &

The R&I Editorial Team can be reached at [email protected]