Background Investigations
Case Study
Corporate Resolutions was engaged to conduct a background check on a potential CFO candidate who had over 20 years experience in his industry. Preliminary findings revealed that the candidate had relocated from the Midwest to the South approximately two years earlier, which coincided with an undisclosed personal bankruptcy filing. The client agreed with us that the candidate should be interviewed to obtain further information concerning the filing of this bankruptcy. Upon interview, the candidate readily disclosed the fact, that he was let go from running a company in the Midwest and subsequently encountered some financial problems, as he was not immediately able to secure new employment. He thought that it would be best to file for bankruptcy protection.
Based on the fact that the position was that of CFO, our client opted to find a new candidate for this critical position.
Case Study
Outside counsel for a healthcare provider retained Corporate Resolutions to investigate allegations made by a patient that her doctor, a new member of the healthcare group, had sexually assaulted her. The attorneys were interested in whether the patient had a history of initiating frivolous lawsuits. Our investigation determined that the patient had no prior of litigation, but upon conducting a background investigation of the doctor, we determined that he had recently relocated to his current address from New York. Further investigation revealed the doctor had been sued for a similar charge while in New York. Our client quickly settled the lawsuit fearing that if information surfaced it would adversely affect the healthcare group.
Case Study
An owner of a group of convenience stores was bringing in an investor group to acquire the controlling interest in his company. The owner requested that Corporate Resolutions conduct a preliminary background check of several members of the investor group. Our investigation did not uncover any substantive findings regarding the lead investor in the group, however further investigation revealed that there was a passive investor in this transaction who was a convicted felon, recently released from prison for money laundering. Believing that the sole intent of the investment group was to use their convenience store chain for illicit purposes, our client decided to look for other investors.
Case Study
A number of senior executives of a large financial institution were victimized by a temporary employee hired through an agency. While at the institution, the individual obtained the names, Social Security numbers and identifying data of senior employees and used it to fraudulently open bank and charge accounts. Our investigation revealed that the temp employee had entered the United States on a temporary student visa, which did not allow him to be employed while in the United States. This individual however, used a fraudulent Social Security number as a means to obtain work. Further investigation revealed that this individual had not attended the school indicated on the visa application, and that he had been arrested in three different states for credit card fraud and motor vehicle theft. Corporate Resolutions found that there were two federal arrest warrants outstanding on this person in connection with those crimes.
Corporate Investigations
Case Study
A large distribution company realized it had been victimized by an internal fraud and called upon Corporate Resolutions to investigate further. Upon assessing the situation and meeting with management, several logical suspects emerged. Inasmuch as the fraud was perpetrated by someone manipulating the company's sales and accounts receivable system, a software program was developed to notify management when someone accessed those accounts. The program also provided the exact computer terminals from which the accounts were being accessed. Within 24 hours of implementing the program, one of the suspects, a company salesman accessed the account. Covert cameras were installed in the ceiling above where the suspect employee and several of the other suspect employees worked, to see if and when they were on their terminals. We also conducted appropriate background investigations, and reviewed company records regarding the suspect employees. One of these individuals, a 20+-year employee of the firm, had serious financial problems.
On multiple occasions, our programming and video surveillance confirmed that this individual accessed the system and cancelled a sale after the merchandise was shipped, but before an invoice could be generated and the order posted to the accounts receivable system. Additional records were reviewed that showed that a particular customer of the salesman had an inordinate number of orders cancelled over a three year period, but delivery records indicated otherwise. Simultaneous but separate interviews were conducted of the suspect salesman and customer and elicited joint written confessions. Both individuals repaid our client immediately and in light of their cooperation, our client decided not to refer the matter for prosecution.
Case Study
A technology company had acquired a similar firm in a different locale. Within two months, the acquired company lost half of its customers. Corporate Resolutions was retained to locate and interview those former customers in an effort to ascertain the circumstances surrounding their leaving the company. Interviews with former customers revealed that they had been unhappy with the company’s service and support for some time. We also learned that the company’s sales staff made promises and provided incentives to customers to stay on until the acquisition was completed. Our inquiry further ascertained that employees had been given a script by the company’s owner, which set forth how the employees were to "lie" to customers. Management also provided these employees with incentives to stay with the company until after the acquisition.
The information obtained by Corporate Resolutions provided the client with sufficient grounds to file a lawsuit.
Case Study
Efforts by a team of independent auditors' failed to identify a company’s $5 million discrepancy in their accounting records.
Corporate Resolutions was subsequently contacted by the company and we recommended that some preliminary employee interviews be conducted. We immediately determined from these interviews that two important changes had taken place within the company during the prior four months. First, the CFO initiated a policy where he assumed responsibility for opening and reviewing all mail. He then turned it over to the office manager whose job it had previously been. Secondly, the CFO had resigned just after the independent auditors arrived, claiming he was taking a position with another firm.
Further investigation determined that the CFO had formed a company six months earlier with a name nearly identical to that of our client. We also determined that he had been ordering and paying for 100 computers at a time, returning 50 to the supplier, who in turn, would mail a refund check to the company. The CFO, now in control of the mail, was removing the checks and depositing those proceeds into the account of his newly created company.
The matter was turned over to the FBI.
Case Study
Corporate Resolutions was engaged by the outside counsel to the board of directors of a company after the board received an anonymous email alleging sexual harassment and other indiscretions by the company’s CEO. We were requested to investigate each of the allegations included in the email.
Our investigation included interviews of the CEO, senior management, and several former and current employees of the company. In addition, our computer forensics team imaged the CEO’s computer and recovered deleted files and emails and performed an analysis of those emails dating back over a two-year period. Further investigation included analysis of expense reports, relevant personnel folders and background checks of employees where appropriate.
Our investigation ultimately identified the sender of the email as a former disgruntled employee who had the motivation, computer capability and knowledge of the CEO’s activities.
The executive ultimately admitted to an inappropriate personal relationship with the employee, which he knew was against company policy. The CEO was disciplined accordingly and the company’s outside counsel addressed the additional actions that needed to be taken in this matter.
Litigation Support/Witness Location/Asset Identification
Case Study
A couple sued an investment firm they alleged had lost their savings by "churning" their accounts. During arbitration they cited poor health and that they had not been able to work for several years.
Our investigation discovered that the husband had recently taken out a mortgage to invest in property located in a resort area. The investigation further revealed that his spouse had seven investment accounts at other firms, which had not previously been disclosed, and that the investments in these accounts were directed by the account holder. Our investigation developed evidence through statements provided by the husband in unrelated legal documents that he continued to work and that specific dates and times were quantified. We also uncovered that the husband was actively working, and had provided services to in excess of 20 clients during the prior year.
Our investigation impugned the veracity of both subjects and their credibility as witnesses.
Based mostly on our investigation, the arbitration panel felt that there were no grounds for the claims against the brokerage firm.
Case Study
An investor group that owned a golf course became concerned that the daily revenue of the club was not consistent with the number of people they observed on the golf course. A random surveillance by Corporate Resolutions confirmed their suspicions. Further investigation determined that the golf course manager spent an inordinate amount of time at a nearby casino and was experiencing personal financial problems, which appeared to be directly related to his gambling. The manager was subsequently interviewed and admitted to embezzling from the golf course.
The manager provided a written statement admitting his guilt, and agreed to make restitution. His employment was terminated.
Case Study
Corporate Resolutions was retained by an insurance company’s counsel regarding a property loss allegedly caused by arson. Although the arson investigators dismissed the insured as a possible suspect, as he was overseas at the time, our investigation focused on him. Our investigation identified a myriad of corporate entities indirectly connected to the insured by layers of failing limited partnerships. A review of court records of these related entities, identified a lawsuit filed by a disgruntled former employee, who was also an investor in several of the subject’s companies/partnerships. The investor had lost all of his money and wished to cooperate with us. The information furnished by this person was corroborated by us, and provided our client with the subject’s motive, upon which they refused the claim. The matter was referred for prosecution.
Case Study
Corporate Resolutions was asked to locate the former office manager of a car dealership who had admitted to embezzling funds from the dealership and had been making restitution payments up until the point that he disappeared. Our investigation identified several former addresses for the subject that eventually led to an address in Hawaii. Upon conducting further investigation in Hawaii we discovered that the subject was scheduled to arrive there the next day from Toronto. Investigation in Canada identified a company in Toronto that was owned by the subject. Corporate Resolutions successfully had the subject served with papers in both Hawaii and Canada for a deposition to be conducted in Hawaii and for any and all corporate records for his business in Canada.
Case Study
A real estate developer who defaulted on a mid-six figure loan claimed he did not have any assets and requested that the bank settle for ten cents on the dollar. Although Corporate Resolutions identified some assets that had previously been conveyed to others, on the surface, he appeared judgment proof. The cost of litigating versus the potential for recovery would have been prohibitive. Our investigation, however, also revealed that the real estate developer was in the process of bidding for a large project in another part of the country.
The bank was able to leverage their knowledge of his pending bid to have the borrower satisfy his exposure in full rather than risk losing the bid due to the default on his earlier loan.
Case Study
An asset-based lender retained the services of Corporate Resolutions to locate the principals of a manufacturer who defaulted on a loan and disappeared with the inventory. Investigation ascertained that the manufacturer had formed a new entity under another name in a neighboring state, and transferred the inventory to the new location.
The inventory was successfully attached and the matter was referred for prosecution.
