I recently left a small healthcare consulting startup. I had only worked there for about six weeks before I realized it wasn’t for me - and a lot of had to do with my question.
The company is tiny: 5 permanent employees, all based in a small, windowless office in NYC. However, this isn’t how they represent themselves. They call themselves a global consultancy, and in personal communications, job postings, communications with clients and on their website speak about their offices in Shanghai, Basel, and San Francisco in addition to their NYC office. They don’t give hard numbers on the size of their staff but continually imply (especially to clients but also to prospective employees, as I was) that it’s much larger than it is. Their office space is shared and all meetings with clients are done in external conference rooms so it’s not clear that the whole floor doesn’t belong to them.
After I came on this was explained to me as being “common in the industry” and the only way they felt comfortable pitching business to big clients. It actually seems to be working for them, they have several large clients and win a lot of business from them (which is then distributed amongst 5 people in a sweatshop environment - the reason I ended up leaving.) After talking to some other people in consulting, it sounds like talking up one’s capabilities is fairly common, but the degree to which this company has done it is not.
So my question is - are they fraudulently representing themselves to clients and new hires? And by forcing their employees to perpetuate this farce, are they making them a party to fraud as well?
This sounds like every dot com company ever, including one I worked for. They had a swanky office on Park Avenue in NYC that consisted of a lobby and a conference room, but it was designed to give the impression of a much larger operation, with scores of workers were behind a set of doors that was actually just a closet. The lobby had expensive chairs and nice art, and the sole purpose of the office was to conduct meetings with potential investors.
I agree with **campp **that it’s clever and deceptive but by itself not a crime.
Sounds a bit “fake it til you make it” to me. I worked for a tiny company once, and it talked a big game. Within a few years it had gone global and increased its work force by about 4000%. And the main office went from dinky to swanky.
By reading the webpage, one consulting firm competing against Mrs Cad would have you believe that the father and son were actually a team of consultants. Oh and he was using an expired industry certification as a selling point.
Unethical but not illegal.
The bit where they claim to have offices around the globe is a flat out lie, if the only office is in NY. I don’t know if it really counts as “fraud”, though, if it’s just some marketing fluff meant to inflate the importance of the company. Who would actually be defrauded by that lie? How would they be harmed? I assume that the company doesn’t actually try to do business with these mythical foreign offices.
If their space was rented from a setup such as www.Regus.com, they aren’t lying. I set up a prior employer in a Regus office suite in NYC and we stayed their for a few years. It saved us a ton of money over a conventional business lease. When we needed an office suite and conference room for a few days a year almost anywhere in the world, no problem. They have setups worldwide. Very cost efficient.
I worked for a company that referred to its “Milan sales office” and its “UK sales office” in its promotional literature. These “sales offices” consisted of self-employed people who handled any business we had in those regions. These independent sales reps didn’t work for us, but they got commission for any transactions they brokered. Perhaps that’s what your former employer was doing.
Fraud requires more than deceit. It’s deceit with intent to [do something bad]. I’ll let the lawyers fill in the brackets, but they’d vary by country/state anyway.
If the company is able (or believes it is able) to deliver on the promises it has made regarding products and services, then there is no intent to do something bad and therefore no fraud.
Now, the company might be both deceptive and unethical*, but you can be those without committing fraud.
On the other hand, I haven’t really seen proof of that in this thread. “Offices” is a very generic term. For corporation who need a state presence under the law, often they need nothing more than a place that mail can be delivered to. If that’s good enough for the law, surely it’s good enough for marketing.
Meets all the requirements for fraud but one, so it is not fraud as far as I interpret the law (USA).
What’s missing is actual damages. Unless the clients can show that they were injured by the misrepresentations then no fraud. As for the new hires, I know if I ditched a nice paying job to come work for this “global” company I’d be pretty miffed once I found out the truth. I’d sure feel financially damaged, but don’t know if that would fly.