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.

The South Korean subsidiary of a global aerospace and industrial supplies company requested an investigation of their general manager who was suspected of expense fraud, undisclosed conflicts of interest and bribery of public officials. The investigation revealed that the executive used on of his direct reports as a proxy to misuse the company’s purchasing card to pay for Karaoke, gentlemen’s clubs and other forms of entertainment for himself, other employees and local government officials in violation of the firm’s code of conduct and possibly the U.S. Foreign Corrupt Practices Act (FCPA). In addition, the investigation revealed that the general manager had implemented a mortgage lending program for employees in which the company provided private mortgages for key executives. This alone would have been cause to fire the executive but it was subsequently learned that the borrowers had no knowledge of the mortgage loans attributed to them. Instead, the proceeds of this unsanctioned mortgage loan program went directly to the general manager. The investigation led to the dismissal of the GM and enabled the company to implement a series of improvements to their internal controls.

A global manufacturer of highly engineered products retained WCF personnel after an acquisition due diligence report of a proposed merger revealed that an acquisition target may have made improper payments to various government officials in exchange for the award of lucrative government contracts. The work included a review of policies, procedures and internal controls, background investigations of key individuals, an extensive review of vendor disbursements and gifts, travel and entertainment expenditures and other forensic, investigative and compliance risk assessment procedures. The culmination of our work was the joint development of a Management Action Plan of steps that the acquisition target was required to take prior the transaction’s closing and then a follow up audit to determine that each step in the action plan had been taken as agreed. This work enabled the client to complete its purchase of a strategically important target while avoiding undue risk of successor liability.

A global services provider was alleged to have made improper payments in multiple Latin American countries in exchange for the award of government contracts. These payments were alleged to have been made through a series of business intermediaries and other vendors in an effort to disguise them as legitimate business expenses. WCF personnel oversaw a retroactive review of vendor disbursements in each country and also devised, implemented and administered a review of payment requisitions prior to any payments being made a going forward basis. This payment requisition review team also identified numerous internal control shortcomings which they were able to share with the finance team enabling them to make timely remedial actions. After several months of performing this vital payment requisition review function, the team successfully transitioned the process to a full-time team in each country. This work, together with several other work streams, enabled the company and outside counsel to successfully negotiate settlements with the DOJ, SEC and several foreign government agencies.

A global manufacturer with a prior FCPA enforcement action in its past learned that its third-party business partners in multiple countries may have been making improper payments to foreign government officials to secure the award of government contracts. WCF personnel oversaw a company-wide review of its business intermediaries consisting of the collection of vendor master file and disbursement records from over 500 ERP systems, devising and implementing a risk scoring framework and the performance of over 5000 investigative due diligence reports many of which included in country investigations and site visits spanning over 60 countries. This retroactive review was performed in parallel to the creation and implementation of a much more rigorous vendor onboarding process that included the designation of business sponsors, questionnaires, a sophisticated risk scoring process that considered inherent, relationship, geographic, disclosure and financial risk and an adjudication process in which business sponsors engaged directly with intermediaries seeking clarity on any findings resulting from due diligence investigations. This third-party corruption risk program continues to serve as a gold standard that many organizations have sought to replicate. It was also the centerpiece of the company’s presentation to the DOJ and the SEC which enabled them to enter into a very favorable settlement.