Industry Legislation

Suspended Reciprocity Linked to Licensing Scam

Georgia’s discovery of an employee’s license selling scam launched an investigation that is now crossing state lines.

At least 120 licenses were fraudulently issued by a Georgia State Board of Cosmetology employee before she was caught in July 1994, says Jeannette Knox, executive director of the Georgia State Board, was caught when undercover investigators from the Georgia Bureau of Investigation bought two invalid cosmetology license.

According to Knox, the illegal license selling began when the Georgia State Board suspended reciprocity in March 1994. Staff members had noticed an unusually high number of applications for reciprocity and wanted to investigate the cause.

“To get a Georgia license thro9ugh reciprocity you need a certificate from the state where you’re licensed, you actual license, and then you pay a fee. We found that people who went to school in Georgia and who didn’t speak English would take the exam in another state that allowed translator for the state board. Then they would come back and apply for reciprocity.” Says Knox.

Although it is not illegal to get a license this way in Georgia, the state board does not approve of the practice.

When reciprocity was suspended, Knox says Jarell was approached by a man, who Andy Bowen, spokesman for the Georgia Secretary of State, says is only known as “Tran,” and he offered to by fraudulent license from her. “As far as we can tell, she issued 120 licenses,” says Knox.

Jarell, who was fired August 1994, and charged by the Georgia Bureau of Investigation with the licenses for $50 to the man, who in turn sold the licenses for $1,500-$4,000, according to Knox. Most were master cosmetology licenses, but a few manicurist licenses, says Knox, who adds that all the suspect licenses have been suspended.

Determining exactly how many licenses were fraudulently issued was difficult because the state board had to uncover them by looking for licenses for which they had no record of having received an application.

Knox explains in this way: “There are hearings coming up on the manicurist’ licenses. We can’t locate any evidence of [the licenses’] applications for the licenses. If they applied (for example, show they paid a fee), then we’ll continue investigating. If they can’t provide proof that they applied, they’ll lose their licenses and we’ll turn it over to the Georgia Bureau of Investigation.”

To recover the suspect licenses, Knox says the state Board sent letters by certified mail informing the, license had been suspended pending further investigation.

“Then we did what we call inspection “blitzes,” where inspectors would go to salons in a certain area looking for those people. We found some that way, too,” says Knox. Regardless, the licenses expire in August 1995 and will not be renewed.

Knox says she noticed other state boards about the scam at the annual meeting of the National Interstate Council of State Boards of Cosmetology (NIC). “We made a presentation to the NIC [in August 1994] and gave them a list of the invalid licenses we knew of at that time,” says Knox. “We also told them how it was done so they could prevent it from happening in their states.”

Knox says she can’t discuss how the Georgia State Board has revised its procedures because she is still waiting to have the changes approved.

“One problem we did discover is that people coming to the United States from other countries may only have one document [proving who they are]. We require the original to process the application, but because people need this document for other things we were letting them give us copies,” says Knox, who adds that only original documents are now being accepted because photocopies are too easy to alter.

Bowen says the Secretary of State is moving forward with criminal prosecutions, but would not elaborate on the charges or punishment.

While the scam ultimately failed in Georgia, those same licenses could be successful in other states if they were granted licenses through reciprocity before Georgia discovered the scam and reported it to other state boards. The Arizona State Board reports that it is “taking action” against one individual who applied for reciprocity with a fraudulent Georgia license. Once licensed in another state, these individuals can use that license to apply for reciprocity in other states with little risk of getting caught.

To prevent this, a few states, such as West Virginia, immediately suspended reciprocity until the Georgia State Board recovers all the licenses, says West Virginia State Board Executive director Larry Absten.

Still, no one will ever know if even a few of those people slipped through the cracks and are out there working in the industry somewhere.

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