Categories: Compliance Advisory

On behalf of a major global transportation company, White Collar Forensic performed an internal investigation of the suspected theft of equipment.  The investigation included in-depth background investigations of suspect employees, the acquisition and analysis of over 4 million emails and electronically stored evidence, imaging and analysis of computer hard drives, witness and admission-seeking interviews, forensic accounting and loss quantification analyses, and preparation of a detailed investigative report in support of a fidelity insurance proof of loss. The matter also entailed the making of a criminal referral to the U.S. Attorney's Office and Federal Bureau of Investigation and the joint performance of a root cause analysis together with an ad hoc team assembled by the chief compliance officer to identify internal control gaps for remediation. The investigation documented the theft of nearly $7 million of equipment, led to a successful criminal referral and an insurance claim which was paid at its maximum face value.

As part of a 10 country initiative to provide anti-bribery and corruption training to senior leadership and middle management in designated high corruption risk countries, we developed and delivered ABAC training that was tailored to the type of corruption scenarios that could negatively impact the client's operations in each of the 12 countries. WCF professionals developed and led the training sessions in Moscow and Kuala Lumpur.  Other countries where other practitioners delivered training included Bulgaria, Romania, Poland, Turkey, Netherlands, Belgium, Hong Kong, China, Singapore and India.

In connection with a U.S. manufacturer's acquisition of a China-based competitors, a FCPA-themed due diligence investigation was performed that revealed inappropriate relationships with members of the Chinese military including a series of improper payments.   The team worked with the client's General Counsel, Internal Audit executives and outside counsel to develop and implement a series of compliance remediation steps as part of a Compliance Action Plan (CAP).  The CAP required the acquisition target to take a series of steps to remediate its internal controls, compliance program and business operation and included severing customer ties with the Chinese military.   Subsequent to the implementation of the Compliance Action Plan, a specialized audit was performed to measure if the agreed upon remediation steps had been taken.   The audit confirmed that the acquisition target had largely complied with the remediation plan and the deal was able to move forward to closing.

On behalf of a federal financial regulator,  performed comprehensive background investigations of applicants to receive federal funds in connection with efforts to restart the country's asset-backed securitization markets by infusing capital into various types of consumer and commercial mortgage lenders. Hundreds of organizations applied for funding including numerous institutions that were eventually charged criminally in relation to the widespread mortgage-backed securities fraud that triggered the financial crisis in the first place.  Through our efforts, the regulator was able to prevent the program from lending to ineligible borrowers such as those that were under investigation.

In connection with a dispute between two mining companies over the ownership of a  foreign mining concession, a comprehensive investigation of the client's legal adversary was performed to include an examination of publicly available information, manual public records and a wide range of human intelligence assets.  The investigation revealed potential improper payments paid to one or more government officials, the involvement of a notorious mining concession broker, unsanctioned logistical support provided a paramilitary group, the unlawful displacement of indigenous people to enable the construction of a country club and a bribe paid to a tribal elder.  The information assisted the company's outside counsel is connection with his ongoing investigations with opposing counsel and the country from whom the concession was granted.

In connection with ongoing negotiations with U.S. and Brazilian law enforcement and regulators, a Brazil-based aerospace and defense company needed assistance in the design, implementation and administration of their third-party anti-corruption program, the centerpiece of their newly revamped anti-bribery and corruption compliance program.  The team worked with compliance leadership to inventory the various categories of third party, isolate the intermediaries, harmonize the taxonomy used to describe the various intermediaries and develop a tailored risk scoring methodology that considered country, relationship, relationship size, nexus to government officials and state-owned entities and government agencies, watchlist findings and adverse disclosures.  The team also designed the entire onboarding work flow to include business sponsor forms, third party questionnaires, risk scoring, watchlist screening, investigative due diligence requisitions and fulfillment, interpretation of results, follow-up actions and decisioning.  The company's third party anti-corruption program and other actions it took enabled them to enter into a favorable settlement with Brazilian and U.S. enforcement authorities.

On behalf of a Swiss headquartered investment bank, a due diligence investigation was performed of the investment group seeking investment banking investment in connection with the planned roll-up of numerous assisted living and nursing home facilities.   One of the individuals who had been described in the prospectus as the primary investor, had one item in the initial background check showing a recent criminal charge in the State of California.  State public records have a limited amount of information that is available electronically.   Consequently, a field investigator was deployed to review the manual court records and to make inquiries.  The field investigation revealed that the state prosecution was being held in abeyance in an anticipation of a forthcoming federal indictment charging embezzlement and criminal money laundering.   Further investigation revealed that this individual was an attorney who was charged with embezzling over $3 million from escrow monies on deposit with his law firm and using that money to fund his lifestyle.   It further revealed that his law practice had recently been closed down and filed for bankruptcy liquidation.  The investigation enabled the investment bank to deny the investment which in all likelihood would have been used to assist the main borrower to flee the jurisdiction along with the bank's investment.

A European metals manufacturer received a series of allegations via its confidential reporting hotline and in emails to the audit committee, customers and other key stakeholders in which the reporter alleged that the general manager of their Chinese manufacturing plant was involved in vendor kickbacks, improper dismissals to create opportunities for friends and family members and sexual harassment and assault.  The ensuing investigation included background investigations of the China GM, a review of email communications, human resources employment and dismissal records and employee onboarding and ultimately, an interview with the GM.  None of which served to corroborate the allegations.  The investigation concluded with a report listing out the various investigative steps performed in an effort to corroborate the allegations which served to support the decision to close the investigation with no further action.  It also included an outbound email to the whistleblower dignifying his allegations, explaining the fact that the company took his allegations seriously and investigated them but was not able to prove what he had alleged.   No further allegations were received from this whistleblower.

A pharmaceutical supplier requested assistance in the evaluation of their Office of Foreign Assets Control compliance out of concern that some of their procurement activity may entail importing from countries that may have restrictions over certain categories of product. The scope of the project was expanded to include not only export controls and sanctions, but also compliance with the U.S. Foreign Corrupt Practices Act. Further, it was recommended that the project be overseen by counsel since such a review could reveal instances of non-compliance that could give rise to liability. Ultimately, a project team reviewed policies and procedures, procurement and importation operations, government licensing and other substantive interactions with foreign government officials and delivered a report which gave the client a much clearer picture of their OFAC, sanctions, export controls and FCPA risk and their current risk mitigation capabilities. This led to the development of an action plan to assist the company to utilize internal resources to strengthen its export controls, sanctions and FCPA compliance programs.

In certain states in India, companies that retain contractors to perform a project onsite such as a construction project assume the liability for the payment of payroll withholding taxes of the contractor’s employees for the period of time they are working on the company’s behalf. This unusual circumstance gave rise to a category of consultant in India known as a Labor License Consultant or “LLCs”. LLCs take responsibility for the payroll withholding associated with contractors, remit payments to state taxation authorities and complete all of the necessary paperwork. During a routine anti-bribery and corruption audit being performed by the company’s internal audit department, auditors were told the local human resources director “we pay bribes” all the time. In the ensuing investigation, the records of several LLC companies were reviewed, witness interviews were performed and background investigations were completed. The investigation results led the company to conclude that the allegations of bribes paid by LLC contractors were unfounded.

A publicly traded solid waste company realized that they had been defrauded by one of their employees. The employee had been brought in to head up a specialized division of the company specializing in agricultural waste from farming operations. Unbeknownst to the company, this individual had several companies set up in his name which he mischaracterized as important business partners in the company’s pursuit of agricultural waste customers. The entities received sales commissions and broker fees and also were used to divert revenues away from the company in favor of the employee. In some instances, the expenses associated with the agricultural waste disposal were borne by the company and the bulk of the proceeds of the business were diverted to one or more of the employee’s businesses. The investigation revealed that the employee was in fact the owner of the businesses, secured a confession from him and his ongoing cooperation including the voluntary production of his personal and business banking records which enabled the quantification of the loss. This calculation was then used to enter into a settlement agreement between the parties in which the former employee agreed to pay back the money he had improperly diverted away from the company.

Counsel for a U.S. based gaming company requested assistance in reviewing expense records and other documentation of the company’s third party lobbyist in an Asian country following allegations that certain public officials may have received improper payments in exchange for their support of pending litigation legalizing casino gaming. The review enabled the company and its counsel to respond to public inquiries about these purported payments and determine whether they should move forward with their plans to expand into the country in question.