Focused Technologies Imaging Services (Focused Technologies) of Menands, New York was awarded a $3.45 million contract by the state of New York back in 2008 to digitize and scan records of background checks of 22 million people. The information contained in the background checks included fingerprints, Social Security numbers, signatures, dates of birth, and the reasons why the fingerprints were collected. Focused Technologies was specifically tasked with protecting the security of the information and ensuring that a majority of the work be done by individual with disabilities (also known as a “preferred source” contract with the state). However, Focused Technologies found that it was in fact cheaper to outsource the work to an Indian company for only $82,000, so they contracted with this Indian company to process 16 million individuals’ records.
Focused Technologies’ plan was discovered by the state and now, the company has agreed to pay $3.1 million in penalties and fees for defrauding the state of New York. Additionally, Focused Technologies must participate in an independent monitoring program for the next five years to make sure that it acts in compliance with future government contracts. Attorney General Eric T. Schneiderman said, “If you are a government contractor and you illegally ship jobs overseas, you will be held accountable.” Luckily, after investigation by the state, no evidence was uncovered that indicated the information was re-disclosed beyond the outsourcing company in India, and all information has been destroyed. The lesson: beware of outsourcing (and adhere to the terms of your contract).