{"id":7833,"date":"2018-08-21T10:32:02","date_gmt":"2018-08-21T10:32:02","guid":{"rendered":"https:\/\/crigroup.com\/?post_type=case-study&#038;p=7833"},"modified":"2023-05-01T14:54:52","modified_gmt":"2023-05-01T14:54:52","slug":"lack-of-due-diligence","status":"publish","type":"case-study","link":"https:\/\/crigroup.com\/ar\/case-study\/lack-of-due-diligence\/","title":{"rendered":"Trust in unverified business partners comes with a high price"},"content":{"rendered":"<h3><strong><span data-preserver-spaces=\"true\">A HIGH PRICE WAS PAID BY A SMALL GROUP OF INVESTORS WHO PUT THEIR TRUST IN AN UNVERIFIED BUSINESS PARTNER<\/span><\/strong><\/h3>\n<ul>\n<li><em><span data-preserver-spaces=\"true\">LACK OF DUE DILIGENCE COSTS INVESTOR GROUP MILLIONS: Investment Due Diligence<\/span><\/em><\/li>\n<\/ul>\n<h4><strong><span data-preserver-spaces=\"true\">THE INVESTMENT INDUSTRY<\/span><\/strong><\/h4>\n<p><span data-preserver-spaces=\"true\">Fraud is of the utmost concern for all financial organisations. Having safeguarding processes in place is required both from a legal and compliance standpoint and from the position of being a trusted, secure financial institution. These include banks &amp; financial institutions, real estate lenders, business credit and finance companies, commercial investment corporations, asset-based lenders, debt financing firms, acquisition capital firms, etc.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">The financial sector includes new Anti-Money Laundering (AML) rules and legislation, and these regulations are strict and increasingly enforced. As such, remaining in compliance by implementing proper prevention controls is necessary. Failing to do so can mean a loss of business, trust and reputation: banking giant Citibank was recently fined $70 million in the US for failing to address shortcomings in its anti-money laundering policies. (Reuters, 2018)<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Professional services organisations also face accounting fraud risk \u2013 with embezzlement being one of the biggest threats. At CRI Group\u2122, our forensic accountants are trained to follow the money. And when it comes to AML services, CRI Group\u2122 is uniquely positioned to help organisations stay ahead of the curve with anti-money laundering measures and the processes required to fully comply with applicable laws and regulations. This provides financial institutions, their business partners, and their clients the confidence to know that the organisation and its reputation are protected from the negative consequences of money laundering. Learn more about <\/span><a class=\"editor-rtfLink\" href=\"https:\/\/crigroup.com\/our-solutions\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">our solutions<\/span><\/a><span data-preserver-spaces=\"true\">\u00a0for your business.<\/span><\/p>\n<h4><strong><span data-preserver-spaces=\"true\">INTRODUCTION<\/span><\/strong><\/h4>\n<p><span data-preserver-spaces=\"true\">A small group of investors in the US interested in engaging in extensive economic and humanitarian projects overseas recently learned the high cost involved when proper due diligence is not performed. The investor group placed its trust in a very persuasive individual, an Australian man who presented credentials that purported to tie him closely to the royal family in Dubai and major banking centres in the UAE.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">This individual made several in-person visits with the investors in the US, during which he detailed a plan to help them monetise their assets to facilitate necessary lines of credit at a bank in Dubai. With an impressive resume and the impeccable air of a serious business mover, the investors decided to engage in a Joint Venture Agreement with the man, and the project was underway.<\/span><\/p>\n<h4><strong><em><span data-preserver-spaces=\"true\">LARGE CASH DEPOSITS<\/span><\/em><\/strong><\/h4>\n<p><span data-preserver-spaces=\"true\">Unfortunately (as it would turn out) for the investors, their new partner had convinced them that the first stage of building the needed lines of credit involved making large cash deposits to the bank \u2013 through him as an intermediary.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Handing over the first hundreds of thousands of US dollars, followed by two deposits totalling nearly\u00a0<\/span><strong><span data-preserver-spaces=\"true\">$6 million<\/span><\/strong><span data-preserver-spaces=\"true\">, the investors now waited for their credit lines to open. One delay turned to another \u2013 with every phone call, their &#8220;partner&#8221; had an excuse for why there had been no action resulting from the cash exchange. In the end, it all turned out to be a fraud. This individual had deposited a huge amount of money for himself and done nothing as agreed upon with the investors.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">After calling the FBI and law enforcement in Dubai, the investors reached nothing but a dead end. When they called CRI Group\u2122 for help, there was no trace of the money or the at-large fraudster.<\/span><\/p>\n<h4><strong><em><span data-preserver-spaces=\"true\">WHAT THE INVESTIGATION REVEALED<\/span><\/em><\/strong><\/h4>\n<p><span data-preserver-spaces=\"true\">CRI Group\u2122&#8217;s due diligence investigation revealed what the investors should have known before doing business with this individual. Among the revelations:<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">It was a difficult and incredibly costly lesson for the investors in due diligence. Any of the above facts about the criminal fraudster could have been discovered by CRI Group\u2122&#8217;s experts before the investors had sent millions of dollars they will probably never get back.<\/span><\/p>\n<p><strong><span data-preserver-spaces=\"true\">Who is CRI<\/span><\/strong><strong><span data-preserver-spaces=\"true\">\u00a0Group\u2122?<\/span><\/strong><\/p>\n<p><span data-preserver-spaces=\"true\">Based in London, CRI Group\u2122 works with companies across the Americas, Europe, Africa, Middle East and Asia-Pacific as a one-stop international <\/span><a class=\"editor-rtfLink\" href=\"https:\/\/cta-service-cms2.hubspot.com\/ctas\/v2\/public\/cs\/preview\/click?cta_guid=b733ad82-0e55-4917-bb02-011bb79f838d&amp;placement_guid=250fb2a7-fa34-4014-a23e-a19ec41aee8a&amp;portal_id=2506761&amp;redirectUrl=https%3A%2F%2Fcrigroup.com%2Four-solutions%2F\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">Risk Management<\/span><\/a><span data-preserver-spaces=\"true\">,\u00a0<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/cta-service-cms2.hubspot.com\/ctas\/v2\/public\/cs\/preview\/click?cta_guid=4ec58284-73b3-46f5-a11f-d9dcc6b8e17e&amp;placement_guid=f957ed6c-edc3-4286-ac30-f33caa6f81f9&amp;portal_id=2506761&amp;redirectUrl=https%3A%2F%2Fcrigroup.com%2Femployee-background-checks%2F\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">Employee Background Screening<\/span><\/a><span data-preserver-spaces=\"true\">,\u00a0<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/crigroup.com\/business-intelligence\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">Business Intelligence<\/span><\/a><span data-preserver-spaces=\"true\">,\u00a0<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/cta-service-cms2.hubspot.com\/ctas\/v2\/public\/cs\/preview\/click?cta_guid=13966f36-e2fa-4f6b-afeb-5a9004f47f91&amp;placement_guid=67fe51fd-e7a3-4fe3-814a-c8c713aa06e5&amp;portal_id=2506761&amp;redirectUrl=https%3A%2F%2Fcrigroup.com%2Fthird-party-risk-management%2F\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">TPRM<\/span><\/a><span data-preserver-spaces=\"true\">,\u00a0<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/cta-service-cms2.hubspot.com\/ctas\/v2\/public\/cs\/preview\/click?cta_guid=b8a8c479-0172-4651-bdd7-06d3a3e1b42b&amp;placement_guid=26b207ed-54ef-48d8-a2eb-d0931ca99b39&amp;portal_id=2506761&amp;redirectUrl=https%3A%2F%2Fcrigroup.com%2Fdue-diligence%2F\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">Due Diligence<\/span><\/a><span data-preserver-spaces=\"true\">,\u00a0<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/cta-service-cms2.hubspot.com\/ctas\/v2\/public\/cs\/preview\/click?cta_guid=e0e860b5-1822-40b5-a34c-d0a8782d97c8&amp;placement_guid=46f09df8-0452-4582-a178-75554e2c10bc&amp;portal_id=2506761&amp;redirectUrl=https%3A%2F%2Fcrigroup.com%2Fcompliance-solutions%2F\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">Compliance Solutions<\/span><\/a><span data-preserver-spaces=\"true\">\u00a0and other professional\u00a0<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/cta-service-cms2.hubspot.com\/ctas\/v2\/public\/cs\/preview\/click?cta_guid=186c5f76-08e9-452a-b6c7-53c143e3a42e&amp;placement_guid=da1251cb-798d-4e81-a03a-6484600d1cf1&amp;portal_id=2506761&amp;redirectUrl=https%3A%2F%2Fcrigroup.com%2Finvestigative-solutions%2F\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">Investigative Research<\/span><\/a><span data-preserver-spaces=\"true\">\u00a0solutions provider. We have the largest proprietary network of background-screening analysts and investigators across the Middle East and Asia. Our global presence ensures that no matter how international your operations are we have the network needed to provide you with all you need, wherever you happen to be. CRI\u00ae Group also holds\u00a0<\/span><strong><span data-preserver-spaces=\"true\">BS 102000:2013<\/span><\/strong><span data-preserver-spaces=\"true\">\u00a0and\u00a0<\/span><strong><span data-preserver-spaces=\"true\">BS 7858:2012 Certifications<\/span><\/strong><span data-preserver-spaces=\"true\">, is an HRO certified provider and partner with Oracle.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">In 2016, CRI Group\u2122 launched <\/span><a class=\"editor-rtfLink\" href=\"https:\/\/abacgroup.com\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">Anti-Bribery Anti-Corruption (ABAC\u2122) Center of Excellence<\/span><\/a><span data-preserver-spaces=\"true\">\u00a0\u2013 an independent certification body that provides education and certification services for individuals and organisations on a wide range of disciplines and ISO standards, including\u00a0<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/abacgroup.com\/iso-31000-risk-management\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">ISO 31000:2018 Risk Management- Guidelines<\/span><\/a><span data-preserver-spaces=\"true\">;\u00a0<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/abacgroup.com\/iso-37000-governance-of-organisations\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">ISO 37000:2021 Governance of Organisations<\/span><\/a><span data-preserver-spaces=\"true\">;\u00a0<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/abacgroup.com\/iso-37002-whistleblowing-certification\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">ISO 37002:2021 Whistleblowing Management System<\/span><\/a><span data-preserver-spaces=\"true\">;\u00a0<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/abacgroup.com\/iso-37301-certification\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">ISO 37301:2021 (formerly ISO 19600) Compliance Management system (CMS)<\/span><\/a><span data-preserver-spaces=\"true\">;\u00a0<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/abacgroup.com\/aml-training\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">Anti-Money Laundering (AML)<\/span><\/a><span data-preserver-spaces=\"true\">; and\u00a0<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/abacgroup.com\/iso-37001-anti-bribery-certification\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">ISO 37001:2016 Anti-Bribery Management Systems ABMS<\/span><\/a><span data-preserver-spaces=\"true\">. ABAC\u2122 offers a complete suite of solutions designed to help organisations mitigate the internal and external risks associated with operating in multi-jurisdiction and multi-cultural environments while assisting in developing frameworks for strategic compliance programs. <\/span><a class=\"editor-rtfLink\" href=\"https:\/\/cta-service-cms2.hubspot.com\/ctas\/v2\/public\/cs\/preview\/click?cta_guid=2636d9bd-18de-499a-87a0-d62c4dd9c096&amp;placement_guid=c423f6be-c336-4a5b-834b-d1bccfd03ad6&amp;portal_id=2506761&amp;redirectUrl=https%3A%2F%2Fabacgroup.com%2Fcontact%2F\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">Contact ABAC\u00ae for more<\/span><\/a><span data-preserver-spaces=\"true\">\u00a0on ISO Certification and training.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">\u00a0<\/span><\/p>\n","protected":false},"featured_media":22349,"template":"","categories":[15,24,12],"tags":[],"class_list":["post-7833","case-study","type-case-study","status-publish","has-post-thumbnail","hentry","category-all-industries","category-all-regions","category-due-diligence"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v16.5 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<meta name=\"description\" content=\"A high price was paid by an investment group who put their trust in an unverified business partners. 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