We have a 3x household income over the rent, with favorable references, rental history, landlord references, employment history & references, looking at how much money they have on hand & spending history via statements, as well as background, & criminal reports on top of credit. 

Can someone with that kind of criminal history really continue to operate in real estate?

No issues with being sent to collection, no evictions, no criminal records. 

Well, I will preface this by saying I tend to lean biased against criminals.

Not to mention the fact that the criminals, once identified, can be counted on to dig themselves in even deeper on the way to realizing their jig is up. 

(b) To the fullest extent permitted by law, the Manager (such person being referred to herein as "Indemnitee"), shall be indemnified and held harmless by the Limited Liability Company from and against any and all losses, claims, damages, settlements and other amounts arising from any and all claims (including attorneys' fees and expenses, as such fees and expenses are incurred), demands, actions, suits or proceedings (civil, criminal, administrative or investigative), in which he may be involved, as a party or otherwise, by reason of their management of the affairs of the Limited Liability Company, whether or not he continues to be such at the time any such liability or expense is paid or incurred; provided that no Indemnitee shall be entitled to the foregoing indemnification if a court of competent jurisdiction shall have determined that such losses, claims, damages, liabilities, expenses or such other amounts resulted primarily from the gross negligence or willful misconduct of such Indemnitee.

Here are a few pointers, - Background Check, Criminal record, eviction record, credit report, bank statements, previous landlord referral (look up the property on the auditor to verify that it's not their friend). - Ask them what they can share with you.

Look at the criminal history.

But bottom line is this service is available by federal law.And not to mention the states where it's a criminal act to solicit people in foreclosure. 

Being a bad business manager is not criminal, just like being a bad investor is not criminal.