(What’s it like on the front line supporting the firm’s clients? What are the challenges the firm’s experts help senior business executives, general counsel, board members and other decision-makers address? Welcome to ACTION WEDNESDAY. Every Wednesday, the Front Line Blog publishes a new case study.)
The Global Security Director wanted answers right away. The $44,000 check its business customer had sent directly to the pharmaceutical company’s lock box a month ago had not only failed to arrive, it had been presented at the branch of a major bank the previous morning for payment to a newly opened corporate account with a remarkably similar corporate name. “Do I have an internal threat that places my corporation at risk?” she asked. “Please get to the bottom of this and let me know what steps I should be taking – independent of law enforcement efforts – to safeguard our assets by closing accounts or neutralizing assets to prevent a repeat event.”
The Hillard Heintze Solution
Through bank surveillance camera images and other evidence, the Hillard Heintze team quickly identified the suspect and initiated action concurrently through several channels – covert surveillance of suspect premises; communication with the bank’s fraud division on the need to alert other banking and investigative entities; and online research of proprietary databases, credit bureaus and person locators. Hillard Heintze also conducted extensive liaison with one of the largest metropolitan police departments in the U.S., the Secretary of State Police for the state and U.S. Postal Inspection Service investigators.
Impact on the Client’s Business
Hillard Heintze’s verbal and written briefings to the client throughout the investigation explained who the suspect was and how he had been able to create a fake corporation online, open a business account and attempt to deposit the stolen check. Hillard Heintze investigators also determined that (1) there was no evidence to support a conclusion that the theft was internal or the actions of one or more of the company’s employees; and (2) this diversion of funds appeared to be part of a large-scale mail theft and fraud operation at one of the largest international airports in the U.S. – an operation currently under investigation by several law enforcement task forces.
Unplugged: The Project Manager’s Perspective
“Outright fraud is one thing – the loss of financial assets like this $44,000 check, for example…What’s often much more important is the risk that faulty or ineffective internal controls – corporate screening processes, checks and balances, prevention-oriented practices, and so on – may leave the client’s business exposed long after the first culprit is caught. “This case is a good example of the value we bring to the table. Unlike law enforcement authorities, who focus principally on culpability, prosecution and punishment, we look at the event purely from the client’s perspective and, by extension, help them manage risk, continue operations and gain assurance.”
The ACTION WEDNESDAY Tool Box: Three Key Take-Aways
- Make Prevention a Priority: It’s far less expensive than waiting for a crisis, spending unbudgeted resources and risking further negative impacts from an interruption to business operations.
- Regularly Review and Update Key Checks and Balances: Make sure you have the right controls in place – across people, process and technology. Your business changes. So does the risk profile you’re confronting. What you did last year may no longer be a best practice.
- Be Ready to Seek Investigative Support from an External Advisor: Yon won’t always need it. But when you do, it can be invaluable. Federal, state and local law enforcement authorities are not paid to advance your interests. They’re there to enforce the law.
More Hillard Heintze Case Studies
- Uncovering the Illicit Shipment of Goods in Violation of Franchise Policies (CS#134)
- Conducting a Strategic Background Investigation of a Sophisticated Russian Investor (CS#120)
- Helping a Futures Firm Uncover a Gifted Financial Scam Artist (CS #145)