The problem is that the judges didn't have time to do a background check on all the submissions. After all, UPSHOT only came under scrutiny after they had already won.
Background check? They don't need to do background checks on a coworker. I'm sure the judges knew exactly which team members worked at Salesforce. One of the team members worked at Salesforce for 9 years, which is probably a longer tenure than all the judges combined.
I don't think he meant background checks on the people, rather on the project itself. The biggest issue with the submission wasn't the fact that there was an ex-employee, but that the project itself (Upshot) was demoed at a meetup a month ago. If they would have done their homework they would have known that Upshot was an old project and obviously not created for, or at, the hackathon.