State files fraud suit against employment companies

NORFOLK

The Virginia attorney general's office has sued three related local companies, accusing them of bilking unemployed consumers by falsely promising to find them work.

In a lawsuit filed Tuesday in Norfolk Circuit Court, the state charged Virginia Employment Services Inc., Virginia Personnel Inc. and New Beginnings Employment Inc. with deceiving consumers by advertising jobs that didn't exist. The companies asked customers to pay a "membership" fee, usually $365, pledging to set up interviews for them and guaranteeing them jobs in many cases, according to the suit.

"In exchange for the charged fees, the defendants offered guaranteed employment with a nearby company or other promised employer with whom the defendants claimed to have a special arrangement or relationship," the suit says.

The companies had no such relationships with those or other employers, the state alleges.

Attorney General Bill Mims seeks full refunds for all consumers who paid for services but never got work with the companies' help. It also asks a judge to stop the companies' illegal practices and force them to reimburse any overdraft or credit card fees that resulted from them taking money from customers' accounts.

The suit doesn't specify total damages but requests $3,500 in civil penalties, costs and attorneys' fees for each violation.

"The Defendants also took credit and debit cards, stating they will use it to make a partial 'down payment,' and proceeded to take payment in full that day or shortly thereafter, without consent of the cardholder," the suit reads.

Some consumers incurred overdraft fees from their banks because of these "unauthorized" withdrawals, according to the court filing.

Darnell Brunson of Hampton wants his money back. On Tuesday, he went to Virginia Employment Services' office in Norfolk to find work in heavy machinery, forklift operation or other warehouse services.

The company's representative told him he would get a job the next day and gave him the Web sites of three possible employers. Brunson, 35, filled out applications online, but Virginia Employment Services never provided him contact names or other information to pursue a specific job.

"I just gave this lady $365 to give me Web addresses?" he said. "I could have done that on my own and saved my $365."

The state identifies James M. O'Leary Jr. as a director or executive of all three companies and Karla L. O'Leary as an executive of Virginia Personnel and New Beginnings. Neither of the O'Learys is named as a defendant in the lawsuit.

Virginia Employment Services is operating at 870 N. Military Hwy., the same location listed for Virginia Personnel. The suit lists New Beginnings' address as 291 Independence Blvd. in Virginia Beach.

A call left Tuesday at the Virginia Employment Services office was not returned.

In late 2005, the Norfolk Commonwealth's Attorney sued another company that the O'Learys operated in the same office, Jobs Plus Inc., which settled the suit by agreeing to stop certain practices. Jobs Plus then shut down and became Virginia Personnel, which later changed its name to Virginia Employment Services.

The commonwealth's attorney's office continued to investigate complaints against the companies but brought no charges. It turned over the information to the attorney general March 27, according to a release from Mims' office.

State attorneys then needed to research the complaints, collect documents and give the companies' representatives time to respond, said David Clementson, a spokesman for the attorney general's office.

"We wanted them to reimburse every dime and stop what they were doing," but they refused, Clementson said.

Carolyn Shapiro, (757) 446-2270, carolyn.shapiro@pilotonline.com