Client’s Challenge: A U.S. Financial Services Firm Considers its Risk with a New Zealand Company

Just before formally engaging in a contractual relationship with a company based in New Zealand, a U.S.-headquartered financial services firm engaged Hillard Heintze to conduct a thorough background investigation and due diligence of the entity and its principals. “We’re looking,” said the firm’s CEO, “for anything that would preclude us from providing services for transactions in commodities and futures contracts as well as other business transactions or alliances.”

Our Solution: The Investigation Surfaced Nothing Derogatory – at Least Initially

The Hillard Heintze team quickly completed a review of multiple international databases and online sources focused on government-prohibited persons and entities; politically exposed persons; corruption and bribery; arms trafficking and war crimes; terrorism; money laundering; organized crime; and corporate fraud and regulatory inquiries. But it was old-fashioned, hands-on detective work – not online searches – that revealed the most critical information. The New Zealand online media searches surfaced nothing derogatory on the three principals. It was only when Hillard Heintze investigators probed further and looked at pre-2001 New Zealand archived media and press reports that negative information emerged.

Impact on the Client: Evidence of Criminal Prosecution and “Get Rich Quick” Schemes Prevents Damage to the Client’s Brand

These newfound reports described activities by the leading principal connected to a criminal prosecution and conviction of two of his New Zealand business associates related to fictitious offshore investment schemes. Similar financial conspiracies involving this individual surfaced in this search as well, including various “get-rich-quick” schemes in New Zealand, the Caribbean and two U.S. states – though none appeared to involve sufficient evidence to bring criminal charges against him.

“This is someone you want to avoid,” counseled Arnette Heintze. “Our sources in New Zealand indicate that one of the principals is considered a ‘gifted financial scam expert.’ While he has not been personally convicted, we believe that his ability to avoid prosecution to date attests to his nimble thinking and agile con-artist skills.” The client immediately ceased all communication with these individuals – a critical and timely step that may have prevented fraudulent losses and brand damage that easily could have measured tens of millions of dollars.

Unplugged: The Project Manager's Post-Engagement Perspective

“There’s no doubt about it. In my mind, at least. Not a shred. If the team entrusted with this assignment were just conducting a ‘by-the-books’ investigation, they would have completely missed these crucial findings – ten times out of ten.”

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