One fraud often demands a team approach
In the midst of digging for minerals, a mining company’s biggest lender pulled out and filed for bankruptcy. The mining company, which was publicly traded, had to sell all of its assets and go out of business. We were asked to make sense of this.
An investor sensed a fraud when the mining company’s senior executives joined a brand-new related company. And they easily acquired all of the original assets – from expensive equipment to intellectual property.
How were they able to obtain those assets so easily? Were they connected to the defunct company’s main investor? And, how sincere was that bankruptcy?
Because the scope of this investigation includes several executives, investors and investment entities, a case like this requires a team of investigators seeking evidence about people and corporate entities and the datapoints that connect them. The ultimate goal was to see whether the original lender had made a back room deal with the executives to invest in and own a larger piece of the new company.
Such cases involve differing items to research, often in several jurisdictions throughout country or the world. In a matter like this, we recommend looking at the main subjects, understanding other related disputes involving them, their corporate connections and looking into similar past conduct.
See if they are in recent disputes with others, who might know about their current circumstance and shed light onto it. This often involves searches in multiple jurisdictions, depending on where they have conducted business.
Search for smaller shell companies and LLCs tied – even loosely – to the lender and the executives. Such shared entities can highlight their relationships and sometimes open a window to where money is flowing and being shared.
Identify potential sources who can shed light on how the scheme worked. While often unsubstantiated, the deep human intelligence often leads to harder, documented evidence.
History of such conduct
See whether any of the main subjects have had similar allegations against them in the past.
Focusing on the four points mentioned above is a reliable starting point, but even more issues are likely to arise that demand further research. Because frauds often span multiple jurisdictions and are connected to many people, pulling together the disparate parts can demand several professionals.