http://www.sun-sentinel.com/news/local/southflorida/sfl-cchildnet14apr14,0,6355081.story?coll=sfla-home-headlines By Brian Haas and Bill Hirschman South Florida Sun-Sentinel April 14 2007 Fort Lauderdale -- ChildNet fired its president Friday and the FBI shut down the agency's main office and seized documents and file cabinets. The search by the FBI and Fort Lauderdale police forced ChildNet employees to work from home while the nonprofit's board held an emergency meeting during which president and CEO Peter Balitsaris was fired and Chairwoman Virginia Miller resigned. At the meeting, the state Department of Children & Families gave ChildNet a letter terminating its $65 million contract to provide Broward County's child welfare services, but rescinded the termination once Balitsaris was fired and Miller stepped down, state officials said. DCF officials later released a stinging report by private investigators hired by ChildNet accusing the nonprofit of widespread security problems, potentially illegal kickbacks and fraudulent billing. DCF's district administrator, Jack Moss, said the state plans to investigate the allegations in the private investigators' reports, as well as ChildNet's hiring of two longtime felons and the theft of a laptop from ChildNet with personal information on 12,000 people applying to be adoptive and foster parents. "We are taking it all extremely seriously," Moss said. ChildNet officials declined to answer questions Friday. Neither Balitsaris, who had been with the agency since 2002, nor Miller could be reached for comment. The FBI would not give the reason for the search of ChildNet's offices. The trouble began in September, when thousands of dollars worth of gift cards meant for foster children were stolen from a locked ChildNet office. After a nearly identical theft in February, ChildNet hired private investigators Wayne Black and Vincent Mazzilli to look into the thefts. The two found that the two suspects police have named in the stolen gift cards case, Brady Grant and Steven Williams, have felony records. Police have since named Grant a suspect in the theft last week of the laptop containing Social Security numbers, credit information and fingerprints on 12,000 Broward applicants to ChildNet's programs, most of them applying to be foster or adoptive parents. No one has been charged in any of the thefts, and the laptop remains missing. Attempts to reach Grant and Williams on Friday were unsuccessful. ChildNet officials have said Grant and Williams were hired as facilities managers despite their criminal backgrounds but couldn't explain why. According to a summary of the private investigators' findings, Grant and Williams admitted that one vendor billed ChildNet $11,000 for work that was never done, with Williams receiving a few thousand dollars in the plan. It said Williams also allowed the agency to be billed for vehicle repairs that were never done. The report accused Peter Greenhough as ChildNet's chief financial officer of having his employees falsify invoices so that the state would reimburse the agency for work that it normally wouldn't pay for. Greenhough could not be reached for comment Friday. It was unclear whether he still works for ChildNet. The investigators also said in their report: ChildNet employees might have stolen Christmas toys donated to foster children, though those suspicions haven't been investigated. No one has inventoried ChildNet's computers and it is likely that other computer thefts have gone unreported. Critical data isn't regularly backed up and is vulnerable to security breaches. An unknown number of outside vendors have access to ChildNet computer systems containing sensitive information. Alan Levy, a child advocate and civic activist, sat in on ChildNet's Friday meeting. Despite the problems raised, Levy said he was impressed with the board's actions. "They are certainly embarrassed. I think the board made a very difficult and painful decision," he said. "But they showed they are a very mature group." The problems further strain the relationship between ChildNet and DCF. The state had asked for more oversight and accountability from the nonprofit, even threatening to sever their contract last year. Moss said "things will have to change" in light of the recent problems. Officials have said the stolen laptop did not contain information on children in ChildNet's programs. Moss said Friday's shutdown of the nonprofit's offices wouldn't affect the services the agency provides to children. But some families, worried about identity theft, said they have had trouble reaching ChildNet employees to get information on how to protect themselves. "I tried to call them yesterday and I tried to call them today, and it just rings and rings and rings," said Cindee Horowitz, an applicant in ChildNet's adoption program. "They have my fingerprints, they have my passport information, they have everything. It's scary, I can't even begin to tell you." Copyright 2007, South Florida Sun-Sentinel __________________________ Subscribe to InfoSec News http://www.infosecnews.org
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