Getting Investigation Practices Right
The client, a manufacturer of telecommunications and network technology and equipment, had conducted an internal investigation regarding a kickback scheme allegedly carried out by three of their sales managers in South America. The client took a variety of steps in its investigation, including completing a pricing analysis due diligence and credit checks, and conducting interviews to gain more information. Based on the steps taken, the client concluded that the three implicated individuals were not likely to have received kickbacks.
The client engaged us to provide a wholesale review of their investigation, evaluate the appropriateness of the steps taken, and recommend any additional work that may need to be done to ascertain the truth.
We began by reading the client’s investigation report to gain an overview of all of their investigation steps. Next, we reviewed some of the original documentation, such as the whistleblower’s letter and the due diligence reports compiled by the outside vendor engaged by the client. Finally, we produced our own report, evaluating the strengths and weaknesses of the client’s investigation and listing recommended additional steps for the client to take to gain a fuller picture of the events that allegedly transpired.
In this case, we recommended that additional, more thorough due diligence should be conducted on the distributor in question, the three implicated individuals, and two other individuals who had potential links to the distributor.
We then appointed our due diligence investigators to carry out a review on all five subject entities Based on the due diligence carried out, we were able to determine that at least two of the individuals reviewed had potential ties to the distributor, making the kickback scheme a real possibility.
HOW LONG DID IT TAKE?
- Investigation report – one week
- Due diligence reports – six weeks
WHY THE RED FLAG GROUP?
Investigation Expertise. We know how to conduct investigations and the client trusted us to review a previous investigation done by outside counsel. We know Brazil, speak Portuguese and can comfortably assess the quality of work done on a confidential and independent basis.
Due Diligence Knowledge. It was clear that more work was needed and we were able to quickly suggest more work and get it done to the clients timetable.
Trust. The client trusted us to conduct this review and provide them best practices assessments. They trusted us to make an assessment and give then honest and open feedback on their investigation.
- Investigation report reviewing the internal investigation carried out by the client
- Five due diligence reports