ABC Investigates Alleged Fake Employment Agencies

Federal officials say unlicensed employment agencies are cropping up all over the country.
7:04 | 07/10/14

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Transcript for ABC Investigates Alleged Fake Employment Agencies
Looking for a job scan be one of life's most stressful experiences. And now for unsuspecting job-seekers there is something new you need to watch out for. Authorities say some employment agencies are asking for a training fee up front in exchange for the promise of a job. Which can be illegal. We go undercover to see what would happen to us. Here's ABC's gio Benitez for our series "Nightline" investigates. I have nothing to say. Whats you are saying is not true. Reporter: You are caught on camera. His name is Marius oliver. And he may be walking away because of what we uncovered. Person after person, desperately searching for work telling us he promised jobs. Charged a training fee. And did not deliver. $200. $300. $1,250. Reporter: $1,250? Uh-huh. Reporter: Job-seekers replying to a craigslist ad lake this one for security guard work. Looking to hire ten guard. Interview today. Start tomorrow. I let desperation blind me. That's what happened. Reporter: Experts say, employment schemes are exploding all over the U.S. Job-seekers beware. Never pay money up front just to fill out an application. Promising workers great pay and steady work. Reporter: Including what are in effect employment agencies that offer jobs. But only after you pay for training up front. This is a problem that we have heard about from consumers around the country. Reporter: Monica voka said complaints doubled over five years from 10,000 to 20 T. In the end, what people find out is that when they pay money up front there isn't any income for them at the end of the day. Reporter: When we heard it could be going on right here, we decided to go undercover in new York City. Rigging up producer, with a hidden camera. Test one-two, test. Reporter: To see how the three new yorkers say they were taken in by the man they trusted. So all three of you saw that craigslist ad? Yes. Yeah. Yes. Reporter: What did it say? That we would be paid $12 to $15 an hour. That seemed really good to me. Reporter: Wesley Roundtree had a part time job in retail but longing for something better. He played me for a fool. Reporter: Lizbeth Gomez want to stand on her own two feet. I don't care. You need it. Want this job. You will pay foirr it. And this man looking for a new start. Took the money. He said the next week. Next week. Following week. After that I don't trust anybody. Reporter: The person who meets with us is Marius oliver. That's not the name he gives to our underskucover producer. Reporter: Mr. O'Neal soon asks for money. Yeah, yeah, of course. I brought that. Yeah. Here. Here you go, sir. What's your name again? Oliver is an ex-con who says he is the supervisor for what authorities call an unlicensed employment agency. Owners are unknown. Training is $997, security license. Pay is $21.37 an hour. That's full time. All right. Part time, you are looking at $16.87. Which one you want to do? Uh. Full or part time. It depend. How much? I guess I will do. I like the full. Okay. Full time is $21.37. Training is $997. Paid in full. Only job you are going to be doing. Signing people in. Signing people out. Turning phone calls. Transferring phone calls. Aiding and assisting other security guards getting to work on type. Your probationary pay will last 30 to 60 to 90 days. Kept full time. Reporter: To get the $997, oliver directs our underskufr P -- undercover producer to the nearest bank and atm. How much if I don't do the full $997. That's a problem. You have to be licensed. Here's what you will do, 38/9, a chase. Is there a Chase Bank around here? Chase? Reporter: When the producer returns with $800, due to the atm withdrawal limit. I tried. Took out the limit. I have $800. Can I owe you the $197? It's not all right. Oliver tells our producer to go get the rest of the money. $197. Sc come here a second. Thank you. Reporter: We show our individually to the New York City top cop for consumers affair whose office is investigating Mr. Oliver. This is a guy we know his name Mr. Oliver. We are familiar with Mr. Oliver and bad actors in the industry look him. He is promising there will be a job out there. That is not what employment agencies are allowed to do. Reporter: So ABC news caught up with oliver. Mr. Oliver, hey, there, gio. What kind of business are you running here? What kind of business are you running? Business I'm running? Reporter: Security guard business. Where? Right there. We tell him about the hidden camera video our ABC producer. The pay is $21.37 an hour. Full time. Reporter: He denies ever saying that. So you are telling them they're going to get $21 an hour. No. Reporter: You are not? No, I did not tell them that. It's not true. Reporter: Really? Soap you are saying that the hidden camera doesn't exist? I'm saying not true. Reporter: We have it on camera. It's not true. Anything else? Reporter: He says he does not promise people jobs and that all that cash we gave him is only for training. But he says that's illegal. Because people are brought into the office by ads for jobs, not job training, oliver is in effect acting as an employment agency. He is not allowed to charge any kind of fee for training. Employment agencies cannot, as a precondition to M mroimeemployment that you undergo training, they only provide. That is illegal conduct. Mennen says the city is trying to crack down but warns job hunters to be aware of demanned for any type of up front fees. A sentiment echoed on the national level. Never pay for the promise of a job. Reporter: How do you sleep at night knowing these people who need jobs aren't getting those jobs? First of all. I have nothing to say. What you saying is not true. Reporter: You are caught on camera. I am not on camera. You are on camera. I'm on camera now. You are on camera at the office meeting with the gentleman. Not true?

This transcript has been automatically generated and may not be 100% accurate.

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