Haywood Hunt & Associates Featured on CBC’s The Fifth Estate & Radio-Canada Investigation

Dr. Jean Robert Ngola was singled out as the source of a COVID-19 outbreak in Campbellton, N.B., in the spring, but an investigation by CBC’s The Fifth Estate and Radio-Canada casts increasing doubt on whether he was ‘patient zero.’

Here is an excerpt from the CBC article:

On May 30, the provincial government and Vitalité asked the RCMP to investigate possible criminal wrongdoing by Ngola. After a six-week investigation, police decided against laying criminal charges, but Ngola could still face a hefty provincial fine for violating the Emergency Measures Act by not self-isolating for 14 days after travel. He is set to appear in provincial court in Campbellton on Oct. 26.

The former lead investigator into the Walkerton tainted water scandal says he is in Ngola’s corner. Craig Hannaford, a former RCMP officer who is now a private investigator with the firm Haywood Hunt and Associates in Toronto and was hired by Ngola’s lawyer, spent one month retracing the physician’s overnight trip to Montreal looking for evidence that could prove Ngola didn’t get COVID-19 in Quebec.

Hannaford said he identified several health workers who were crossing into Quebec from Campbellton and not isolating upon their return around the same time as Ngola. 

“The long arm of the state seems to be pointing fingers [at Ngola], saying: ‘You did it.’ Yet there seems to be all sorts of explanations as to how this happened,” said Hannaford.

He said his investigation took one month compared to the few hours it took New Brunswick Public Health to zero in on Ngola.

“That’s not a fair and balanced investigation,” he said. 

Read the full CBC article here:
https://www.cbc.ca/news/canada/new-brunswick/doubt-ngola-family-doctor-source-outbreak-campbellton-new-brunswick-1.5706918

About Craig Hannaford

 is the former head of the RCMP Commercial Crime Section and of the RCMP’s Stock Market Fraud Section. Craig is a Licensed Private Investigator, is a CPA (Chartered Professional Accountant) and a CFE (Certified Fraud Examiner). Craig also has his Masters of Science in Economic Crime Management and a Bachelor’s degree in Computer Science.

Craig has been a Senior Investigator at Haywood Hunt & Associates Inc. since March 2019 focusing on commercial fraud, civil litigation support, investigative accounting, asset searches and miscellaneous problem solving.

What Private Investigation Services Can Do for Business Owners and Businesses

There are a lot of private investigation services that business owners and businesses can make use of for protection and for the prevention of fraud and crime. Though the typical notion is that private investigators are only called in to investigate unsavoury activities, the fact is that this is an outdated concept of what private investigation services can do for businesses and business owners. Below are some of the other ways hiring a private investigator can help business owners promote a thriving business.

Help with Collections

It can be very difficult to locate people who do not want to pay debt or those who are hiding assets in order to get around having to pay debt. Private investigators can work with creditors to locate people in debt as well as identify possible hidden assets a person of interest may be covering up. Professional private investigators can get this done legally by using FCRA and GLBA compliant practices.

Perform Detailed Background Checks

Pre-employment detailed background checks is a necessity for some professions and positions, especially for those seeking work in a big company where a small mistake can equal huge losses. Although there are free websites that employers can use, they do not provide detailed and updated reports that professional private investigators can. This can also be done before a company merger or prior to a business deal to better safeguard company assets and reputation.

Employment Monitoring

It can be a problem if some employees work for two companies with conflicting interests. Employment monitoring can nip poaching in the bud as well as prevent company secrets from falling into the wrong hands.

Locate People

There are times when a person has to be located to serve as a witness, as a resource person, or to answer questions. A private investigator can locate missing persons using advanced searching techniques.

Perform Security Sweeps

It is very important for businesses to be able to identify security threats be they be in the form of digital threats or people with questionable motives. Private investigators can identify areas of weaknesses and devise plans to counter security problems before they arise.

Provide Surveillance Services

There are instances where some employees may try to work with rival companies, pretend to be sick or injured, or do things that can harm the business. Private investigators can provide surveillance services to uncover double dealings or scams before they happen or as they happen.

Assist with Termination

Terminating people can get ugly even when they did some wrongdoing. A private investigator can make this process easier as an unbiased third party particularly if the private eye can provide proof of an employee’s wrongdoing such as proof of stealing from the company or sharing information with competitors.

A Lot More!

There are so many ways that private investigation services can help business owners promote a thriving business. If you have any questions, feel free to contact us or browse our list of private investigation services to find out which one you might need.

 

Ethical Leadership in Business: How to Deal with Dilemmas

Remember Sherron Watkins? You might not. It’s been almost two decades since Watkins was the vice-president of corporate development at the disgraced Enron energy company, but today is most often referred to as its whistleblower. A certified public accountant with a master’s degree in professional accounting from the University of Texas, Watkins joined Enron after working for the poster child of accounting fraud, auditing firm Arthur Andersen, for eight years.

Why was the Enron financial scandal not exposed earlier? Why did it take years before a concerned employee came forward? Why did no one stop the “smartest guys” when the lights went out in California? Ms. Watkins cited four key factors that could be applied to many organizations and their employees:

  • fear of losing one’s job
  • fear of rocking the boat and being ridiculed
  • an “it’s not my concern” attitude
  • a “group think” culture that does not tolerate criticism of the corporate viewpoint

Fear, apathy and peer pressure. It sounds like high school. But how many employees, regulators, investors and others with links to today’s scandals are now saying, “if only I had shown some ethical leadership and done something”?

Who “Made Off” with the Money?

While the full story is not yet known—and experience tells us that it will take years to uncover all the facts—the sheer size of the fraud allegedly committed by Bernard Madoff, the American businessman and former chairman of the NASDAQ stock exchange, adds another layer to the general public’s mistrust and cynicism of the ethics of people in high places.

The Madoff case appears to be a Ponzi scheme of gigantic proportion but subtle variation. The structure of such schemes have been around for centuries but were made famous by the eponymous Charles Ponzi, who defrauded investors in the United States through fraudulent activity involving the exchange on international postal reply coupons. The classic Ponzi scheme is one in which the returns on investors’ funds are not obtained through actual earnings but from the principal contributed by subsequent investors. No legitimate investment exists, and the funding from subsequent investors is used to pay off earlier obligations, which provides the appearance of legitimacy.

Madoff’s scheme was typically Ponzian in structure, but varied in both pace and marketing. Bernard l. Madoff investment Securities offered its exclusive clientele modest but steady returns in both bull and bear markets, rather than the typical Ponzi paradigm of suspiciously high returns to all comers. Furthermore, charitable foundations, rather than individual investors, were many of Madoff’s victims, organizations that one would assume to be sufficiently sophisticated to see through all his smoke and mirrors.

Nevertheless, not only was the Madoff scheme typical in Ponzi structure (using new or annual investments as “returns” to established clients), it also shared a few other attributes. Madoff indicated to clients that the intricacies of his investment strategy were too complicated to explain in simple terms. Madoff also claimed that the secrecy of his strategy and investments was important. The “beauty” of the Madoff scheme, however, was in how it diverged from three key aspects of the traditional Ponzi:

  • Questionable or limited information on the background of the promoters of the investment
  • Promoters who are not registered with any securities regulator or self-regulatory organization
  • Obstructions to due diligence because of key offices or institutions in foreign jurisdictions

Mr. Madoff was an established investment veteran with impeccable credentials operating in plain sight in one of the foremost investment capitals in the world. In the end, who had the courage to come forward and blow the whistle? Not the regulators. Certainly not the investors, who were blinded by steady returns and a false front of legitimacy. It was instead the Sherron Watkins of Bernard l. Madoff investment Securities: Mark and Andrew Madoff, sons of Bernard.

Ethical Issues

One can only imagine the horror experienced by Watkins and the Madoff boys. To discover that fraud is occurring all around you is to be faced with an ethical dilemma that many would prefer to simply ignore. Though the ethical dilemma is personal (“should I blow the whistle?”) the ethical issue is institutional.

Ethical issues come in all shapes and sizes, and by no means are they all related to financial fraud. They can be legal or illegal. They can be simple or complex. Their consequences can be minor or severe. Some of the topical ethical issues that companies face today are:

  • affirmative action or preferential hiring programs
  • corporate donations to non-profit organizations
  • the outsourcing of jobs to countries where labour is less ex-pensive
  • the outsourcing of production to countries with looser environmental or health and safety laws
  • tax minimization strategies

Note that none of these practices are illegal. Indeed some, like affirmative action programs or outsourcing, become popular economic or social trends. Others, like corporate donations to non-profits or tax minimization strategies, are simply good business.

What they share, however, is the advantageous treatment of one group at the expense of another. They involve choice. And choice requires leadership. So how do people guide themselves in their choices when ethical roadmaps don’t exist and ethical issues are a moving tar-get? After all, ethics vary from person to person. Ethics vary from country to country. Ethics vary from culture to culture. It may help to take a step back for a moment and imagine a pyramid based on enforceability.

Ethical Enforceability

In most societies, the basic ethical standard is criminal law. We all agree that people should not break the law. But how many times have you heard that old saw, “if it ain’t illegal, it must be ethical”? Ethical behaviour is not enforceable law, because criminal law alone cannot encompass all ethical issues and therefore cannot enforce ethical behaviour. Yet criminal law—the entirety of the criminal code and its penalties—provides business with an ethical base.

The most difficult ethical dilemma is not about right versus wrong. It’s about right versus right. It’s about the right away to con-duct business, and if the dilemma is particularly tough, that’s usually because there are powerful ethical arguments on both sides. Too often, the scandals that make the headlines are the result of perfectly legal but appalling and outrageous behavior that highly offends the public. That’s why you need regulatory law. It’s the next level in the pyramid.

These are the regulations that govern industries and professions. They may be self-imposed or imposed by government in some form of regulatory agency. They exist not only to regulate the behaviour—typically through a disciplinary process—of organizations and individuals but also to serve as a framework that acts as a moral guide.

Here it may be useful to take note of CGA Ontario’s “Code of Ethical principles and rules of Conduct” (“the Code”), as a template of regulatory law. A professional organization and its members are granted the legal right by society to organize itself, to control en-trance into a profession and to formulate standards of behaviour governing its members. in return for this right, its members are to act in the interest of society and the public.

The Code encompasses both ethical principles and rules of conduct, and articulates the ethical obligations of all CGAs as well as desirable character traits and values that guide our ethical behaviour. It would be impossible to overestimate its importance in both the personal and professional life of every CGA. Without question, to be called upon by the chair of CGA Canada to rise and recite the Oath of Obligation at the Admission to Membership Ceremony is a profound experience, and an occasion no CGA ever forgets.

In this way, we might say that a framework of common behaviour—and the sanction that results when one betrays the trust of one’s colleagues—helps to regulate individuals to a degree to which organizations are immune. Thus the need for corporate policy.

Though corporate policy is typically less enforceable than criminal or regulatory law, it still informs ethical behaviour. The weakness of corporate policy, however, resides in its obligations: if a company’s main purpose is to maximize returns to its shareholders, then it could be seen as unethical for a company to consider the interests and rights of other groups. That is why many people believe that corporate policy primarily exists to limit legal liability or curry favour by presenting the image of the good corporate citizen. it is also why many believe that ethical problems are better dealt with by depending upon employees to use their own values as their guide.

The Behaviour Ladder shows that, while a corporate policy may be legal, it may still fall short of ethical behaviour, and be inconsistent with the values of employees. Similarly, even though ethical behaviour is both higher and dependent upon both criminal law and corporate policy, it may not mesh with individual values. Of course, the value system of many individuals is not consistent with the reality of every criminal law; nevertheless, if we are all to climb the ethical ladder, we need a common rung on which to begin.

Ethical Criteria

So how can you determine what is ethical? For example, if a new corporate marketing decision has been made with which you are uncomfortable, what tests can you apply to see where it stacks up on the ethical scale? Here are a few criteria that will help:

  • Is it legal? if the course of action is not legal, then it should not be done. Take steps to identify the illegality of the issue and ensure that you do not participate in its implementation.
  • Do the benefits exceed the cost, regardless of to whom they accrue? Ask yourself what the benefits are of the policy and to what extent do they outweigh the costs of the course of action. This may help you to identify who or what benefits from a specific decision.
  • Are you prepared to let everyone in your organization carry out the proposed action?
  • The Light of Day. Would you be comfortable if your actions were exposed both inside and outside your organization? (A variation of this is the parental test—would you be willing to tell your parents what you have done?)
  • The Golden Rule. What would you say if the proposed action were done to you? your own reaction may provide guidance as to whether the action is ethical.
  • The External Test. Discuss your proposed course of action with others. If feedback indicates that the proposed course of action is an ethical issue, think long and hard before proceeding.

The late Robert Noyce, legendary co-inventor of the microchip, once said, “if ethics are poor at the top, that behaviour is copied down through the organization.” While I admire the sentiment, I don’t completely agree with it. The fact is that in every organization there are employees who are whistleblowers in waiting. Remember Sherron Watkins? She wrote a detailed, no-holds-barred seven-page letter to her boss, Kenneth lay, telling him company was just a giant Ponzi scheme. And she was circumspect enough to take the external test before writing it—she discussed her ethical dilemma with her former partners at Arthur Andersen.

As long as there is business, there will be situations that test the ethics of business participants. But in the words of the financier Henry Kravis, who knew a thing or two about the ethics of building a business empire in the same city that spawned Bernard Madoff “if you build that foundation—both the moral and the ethical foundation—as well as the business foundation and the experience foundation, then the building won’t crumble.”

Deception in Financial Statements

In a recent case investigated by the Royal Canadian Mounted Police (RCMP), the senior executives of a publicly traded company were charged with fraud related to the financial statements of the company. The RCMP stated that the accused created an elaborate scheme of paper trails that exaggerated the financial position and the performance of the company in order to mislead investors, creditors and auditors. Revenues were overstated in successive quarters, false sales were recorded in the accounting records and high interest loans were not recorded.  The company eventually went into bankruptcy, at which point the deception was uncovered. Creditors and investors lost millions and employees suffered through unpaid wages.

Financial statement fraud is the deliberate misrepresentation of the financial condition of an enterprise. Its intent is to deceive financial statements users (e.g., shareholders, creditors, regulators). It has many forms and guises, but is perpetrated through intentional misstatements or omissions of amounts in financial statements. It occurs in large publicly traded companies. It occurs in small family-owned firms. CGAs should be aware of the red flags that may indicate the presence of financial statement fraud and then make the appropriate examination to determine if their concerns are warranted. It is often the small extra inquiry by an accounting professional that exposes the presence of financial statement fraud.

The extent of financial statement fraud varies but the techniques used to perpetrate it generally fall into the following categories:

  • fictitious revenues
  • fraudulent asset valuations
  • fraudulent timing differences
  • concealed liabilities and expenses
  • improper or fraudulent disclosures or omissions

Fictitious Revenues

Fictitious revenues are probably the most common form of financial statement fraud. In this scenario, false sales are recorded in the books and records of the company. Often, the offsetting entry will be to accounts receivable. However, there are also other methods of manipulating the revenue side of financial statements. Other techniques include the recording of consignment sales and sales with conditions, failing to record the return of goods sold, improper write-off of receivables, and non-recognition of sales discounts. All these techniques can have the effect of making revenues appear greater than they actually are.

Fraudulent Asset Valuations

Improper asset valuations can be used to manipulate financial statements to the point that they are misleading and fraudulent. This can be done in several ways. Often, an intentional violation in the application of the “Lower of Market or Cost Rule” has been done in order to manipulate the financial statements of an enterprise. Estimates of an asset’s residual value or useful life can also be manipulated. Other schemes to inflate current assets at the expense of long term assets can be undertaken in order to manipulate financial ratios.

Fraudulent Timing Differences

The misapplication of timing difference protocols in accounting can result in financial statements being manipulated. Essentially, timing differences can shift revenues from one reporting cycle to another. The same technique can be used to shift expenses. The result can be that expenses are either overstated or understated in a particular period. In the context of fraud, this technique allows the management of a company to manipulate earnings in order to hit predefined targets.

Concealed Liabilities and Expenses

Concealed liabilities and expenses can have significant impact on financial statements, because concealed amounts have a direct impact on the bottom line of a corporation. The pre-tax income is increased to the full amount by the expense that is not recorded. Concealing liabilities is often easier to do than inventing fictitious revenues, as the latter often requires the creation of false documentation such as false invoices or sales receipts. Concealing liabilities can be as simple as capitalizing an expenditure, rather than correctly placing the cost in the appropriate expense account. Another method is the understating of warranty costs for an enterprise. Failing to adequately disclose the true warranty expense for a business can be of benefit to corporate criminals who wish to manipulate financial statements.

Improper or Fraudulent Disclosures or Omissions

As a general rule, financial statements must contain all information to prevent a user of those financial statements from being misled. Notes to financial statements should contain narrative disclosures, supporting schedules, and any other information required to avoid misleading financial statement users. Improper or inadequate disclosure in financial statements can be any of the following:

  • accounting changes
  • liability omissions
  • management fraud
  • related party transaction
  • subsequent events

The degree of the lack of disclosure in any of these examples can amount to the fraudulent omission of a material fact that, in turn, makes the issuance of financial statements fraudulent.

The Defence Against Financial Statement Fraud

Financial statement fraud can be insidious and shrouded. It may have perpetrated for years in any particular business or organization without exposure. Often, when it is finally detected, it is too late; creditors, investors and shareholders have been victimized with no hope of recovery. How then, can we immunize ourselves from financial statement fraud?

The answer lies in a close examination of financial statements for any red flags that may emerge. Each of the types of financial statement fraud outlined in this article has its own red flag, but there are many common warning signs of financial statement fraud. (I recommend the Canadian edition of the Fraud Examiners’ Manual, published by the Association of Certified Fraud Examiners, for extensive reference.)

While I’ve grouped the examples into categories for the sake of simplicity, any one of these warning signs—sometimes alone, sometimes in combination with other signs—can be the key to the discovery of fraud.

Accounting and Statement Warning Signs

  • Negative cash flows while reporting positive earnings.
  • Rapid growth or unusual profitability.
  • Unusual and highly complex transactions, often close to year end.
  • Unusual changes in key financial ratios.
  • Unusual increases in gross margin.

Economic and Sector Warning Signs

  • Assets, liabilities and expenses based on significant estimates.
  • Declines in customer demand.
  • Increasing business failures in the sector.
  • Significant bank accounts or operations in tax haven jurisdictions.
  • Significant related-party transactions.
  • Rapid growth or unusual profitability.
  • Repeated use of materiality to justify inappropriate accounting entries.

Corporate Culture and Structural Warning Signs

  • Domination of management by a single person or small group.
  • Excessive participation by non-financial managers in accounting issues.
  • Formal or informal restrictions on the auditor that limit access to key persons.
  • Ineffective communication and implementation of company’s values and ethical standards.
  • Ineffective or weak board of directors and audit committee.
  • Known history of violations of securities laws by the company, related entities and its executives or board members.
  • Overly complex organizational structure involving unusual entities.

CGAs should be aware of the basic types of financial statement fraud and the red flags that mandate closer examination. This basic knowledge will help CGAs and their clients from falling victim to fraudsters who seek to deceive investors, creditors and others with materially false financial statements.

If You Don’t Hit the Numbers You’re Fired!!!

The Chief Financial Officer (CFO) of any corporation has a challenging job.  Although the job functions of a CFO are varied, they can usually be grouped into the following main categories.

  • Implementation, monitoring and overall supervision of required financial controls. This includes the establishment of various policies and procedures that would include such key elements as revenue recognition and write-off policies.
  • Be the lead on key financial projects that require financial modeling and analysis as well as other key financial related initiatives.
  • Establish relationships with sources of capital and financing and keeping such sources informed as to corporate progress as appropriate.
  • Advise company senior management about the impact of operational decisions on company financial status.

There are many other roles and responsibilities for a CFO.  But what happens when in doing his or her job, the CFO’s duties and professional responsibilities come into conflict with other senior executives?  This can be even more of a challenge (and more troubling) if the CEO of the company has a very strong personality and is driven to get results, sometimes at all costs.

There have been a number of recent cases where this scenario has played out, sometimes in either the civil or the criminal courts.  One of the most recent Canadian cases involves the criminal trial of key figures at Livent Inc, the live entertainment company that was run by Myron Gottleib and Garth Drabinsky.  This case provides excellent insight into the relationships between the CEO and other senior executives and the financial accounting staff, including the CFO.

In her testimony during this criminal trial, Maria Messina, the former Chief Financial Office of Livent made several statements that alluded to the difficulty she faced when dealing with her senior management.  At one point during her tenure at Livent, Messina learned that company managers were planning to implement more than $20 million in accounting manipulations.  Messina met with company managers about this situation and urged them to reconsider the move.  Management responded by telling her that this was just income smoothing and that this was not really her concern.

Messina further testified that the CEO’s management style was dictatorial and bullying and the CEO would often fly into a rage.  “No one wanted to make a mistake that would trigger his anger….there was no way I was going up against him….I was afraid of what they would do to me.”

Messina’s experiences as CFO at Livent are instructive on how a strong CEO within a company can influence a CFO and other accounting staff to help manipulate the accounting records; manipulations that may amount to fraud.  Livent was a classic case of corporate fraud within the executive suite.

An academic paper titled “ Why Do CFO’s Become Involved in Material Accounting Manipulations” (Feng, Ge, Luo & Shelvin) provides some excellent insights to this corporate problem.   The authors examined CFO participation in accounting fraud from two perspectives:

  • CFO’s initiate accounting manipulations for immediate personal gain (i.e. manipulate corporate earning to take advantage of stock market gains)
  • CFO’s participate in accounting manipulations because of pressure from their CEO. Pressure may include compensation, career opportunities etc.

There is another perspective, however,  that should be added.  There are cases of accounting manipulations being done by senior executives in order to “save” a company.  The accounting manipulations can make a company look more profitable. This can affect debt covenants, loan arrangements and the stock price of a company.  Sometimes, executives are looking to buy some time in the hope that a company’s prospects will improve.

The academic paper also made some interesting conclusions.

  • CFO’s seem to bear substantial legal costs for committing accounting fraud but to not reap substantial rewards for doing so.
  • CFO’s tend to depart companies prior to the accounting fraud period. This may indicate that many CFO’s have either been fired for not acquiescing to the fraud or have voluntarily left the company.
  • CEO’s are more likely that CFO’s to be described as the ones who orchestrated the accounting manipulations and who benefited most from them.

The paper goes on to conclude that “taken together, our findings are consistent with the explanation that CFO’s become involved in accounting manipulations under pressure from CEO’s rather than instigating such manipulations for immediate personal gain. “

As an institution, what can a company do to prevent a strong CEO from pushing through unethical or illegal accounting manipulations?

  • The role CFO should be made more powerful within the organization. The CFO must have the ability to work independently so that the influence of the CEO is somewhat limited.
  • The audit committee of the organization should be the one who hires, fires and assesses the work of the CFO.
  • The CFO should have strong reporting lines to the audit committee, especially in cases where there are divergent opinions between the senior executives of the company.

What to Do?

For an honest CFO that is trying to be true to his or her obligations to their profession, the scenarios described are a nightmare.  If a CFO is put in a position of being part of unethical application of accounting standards or out-and-out accounting fraud, what steps can be taken to protect him or herself.  It’s a very difficult situation but here are some tips.

  • The CFO must document the situation and the reasons why the accounting transaction is unethical or illegal. In the first instance, the CFO should  present this memo to the CEO.
  • If the CEO refuses to act, the memo should be discussed with the audit committee.
  • When the audit committee reviews the situation and does not agree with the CFO’s viewpoint, the CFO has fulfilled his or her responsibility to the company. However, if  the CFO is concerned from an ethical or legal perspective, further steps should be taken.
  • The CFO should consult with his or her professional association and receive guidance concerning a course of actions and professional responsibility.
  • The CFO should consult with his or her own legal counsel.
  • Ultimately, the CFO may have to consider resigning if the CFO feels he or she is doing something against their ethics or is acquiescing to an act contrary to any law.

Livent Epilogue:

And what happened to the Livent CFO who testified at the Livent criminal trial.  Although Messina was not charged with criminal fraud, she did receive sanction from her professional association, the Chartered Accountants of Ontario. The summary of the outcome of her disciplinary hearing is below:

Maria Bernedette Messina, of Toronto, was found guilty of two charges under Rule 201.1 of failing to maintain the good reputation of the profession and its ability to serve the public interest, and one charge under Rule 205 of signing a statement which she knew to be false and misleading, arising out of her involvement in fraudulent activities at Livent Inc. While chief financial officer of Livent, Ms. Messina failed to disassociate herself from ongoing and material accounting irregularities, including the fraudulent manipulation of the books and records of the company. She failed to disclose her knowledge of the fraud to the company’s board of directors, audit committee or auditors, and took insufficient steps to prevent the release of the misstated audited financial statements. She signed a United States Securities and Exchange Commission registration statement knowing that the financial statements attached to it were false and misleading.  Ms. Messina was fined $7,500 and suspended for two years…

Accountants of all stripes should look at the Livent case as a warning that these difficult situations can happen to any professional accountant. Awareness about how to approach such situations can prove invaluable.  You may lose your job, but not your career!

 

What You Need to Know About Corporate Investigations

Corporate-Private-Investigations

New corporate clients often ask us a lot of questions. We’ve compiled the most commons ones along with answers straight from our team of seasoned private investigators. Sit back and get to find out why your company might be in need of a corporate investigation.

What is corporate investigation?

Corporate investigation is a deep assessment conducted by a private investigator to help organizations be protected from compromised customer information, misuse or abuse of your company network, possible damaged reputation, or any liability if your company network has been used to launch an attack on other systems.

In a nutshell, corporate investigations perform a thorough investigation of your operations and that is why it can also be referred to as business investigations.

What services are provided by private eyes for corporate investigations?

If you want to find out if embezzlement or fraud is going on, if a potential business partner is clean, or if a possible business merger will benefit you, then a corporate investigation is a service that private investigators can provide to help with that.

Private investigators can provide business investigation services for a wide range of topics such as criminal inquiries, background checks, financial searches, and intellectual property breach.

Why would a company need business investigation?

Business these days is all about being informed so you can make the best decisions. Business investigations arm you with that information and other tools for your organization’s success. Examples of this are as follows:

  • Businesses remain prosperous through brand monitoring, media monitoring, compliance audits, and internet monitoring.
  • You can be protected from your competition and those who wish to take advantage of your company with the help of intellectual property investigations.
  • Internal operations can be protected from fraud by checking up on your new partners (or third parties that you hire) and performing background checks for potential hires, more so for a crucial position.
  • Investigations on due diligence can prevent your company from heading to a lawsuit.
  • Your company can get the compensation or damages it is entitled to in the event of a deal gone sour or a partnership that has gone rogue.

What happens during a corporate investigation?

Business investigations can be performed a variety of ways and tailored to your specific needs. The private investigator you hire will guide you on what specific services you need based on your case. This is why it is crucial that you be as direct about the information you are seeking or the needs you want to be addressed so the private investigator can help resolve your situation.

What services are conducted during a business investigation?

Some of the services provided by private investigators include due diligence, integrity testing, counter measure sweeps, computer forensics, financial investigation, surveillance, and security penetration checks.

Why you need to hire a private investigator for a corporate investigation?

Let’s face it, the more you know about your competitors, your internal operations, your business partners, and your market, the more likely that you’ll succeed. It is not uncommon for companies these days to have internal corporate investigators or have some private investigators on retainer so that they can get the information they need as soon as they need them.

Being on top of what is going on means having an edge over everyone else. Businesses are complex entities, and the larger your business, the less likely that the ‘real score’ gets delivered on top. With corporate investigations, you’ll be able to see through departments that may be hiding data, partners that may also be partners with your competitors, or moles posing as job applicants.

Don’t forget, hiring experienced private investigators that knows the ins and outs of corporate law means getting data that matters, that is admissible in court, and free from corporate politics.

Contact us or use the navigation tabs above to know more about Haywood Hunt corporate investigation services and how hiring us can help your business grow. Your initial consultation is on us!

 

Hiring a Private Investigator to Run In-Depth Background Checks

If you’re thinking about conducting background checks, you might be wondering if hiring a private investigator will make a difference. That is a good question to have because private investigation services don’t usually come cheap. Is it truly worth it to hire a private investigator for running background checks?

What Background Checks Are For

Background checks are done as a preventive measure to minimize risks. Before welcoming someone as part of your organization, you’ll want to at least know that he or she is who he or she presents to be. The last thing you want is to hire someone who has a history of business fraud or is connected to a competitor. Know that once someone is part of your company, he or she will have access to a lot of information that can hurt you, your business, and your clients or customers. With this in mind, running background checks is a good investment that can save you from trouble and losses in the future.

Cost of Hiring a PI Agency for Background Checks

How much a private investigator may charge varies because of many factors. Some background checks may require more effort and resources and hence, will cost more. Some may take just a few days of work and some may need a few weeks to sort through things depending on the depth and purpose of the background check being done.

Why Use a PI Agency for Background Checks?

It is possible that you’re quite internet-savvy and can look up some data that are not readily available. However, a licensed private investigator often has access to more secure databases because they oftentimes possess a background in security, know the right people, and can legally do so. Because of this, professional private investigators can provide deeper checks and better analysis that in turn produce better results for their clients. Perhaps you or someone you know can also extract data; however, it takes years of experience and practice to know how to do proper and legal data extraction. More so, should there be data that is vague, a private investigator is capable of following up via the right avenue until clear answers are extracted.

Do it the Right Way

Perhaps one of the most commonly overlooked reasons why you need to hire a private investigator to conduct background checks is to make sure that everything remains legal. There is a fine line between stalking, invasion of privacy, and plain background check. Unless you truly know the ins and outs of everything, you might end up committing a chargeable offence by doing a DIY background check. By hiring a licensed private investigator, you can be sure of professional procedures that do not violate any law and can keep you out of trouble too.

Are you looking for reliable private investigation service providers in Toronto and Ontario? Contact us at Haywood Hunt & Associates. We’ll be happy to answer questions you may have and will be glad to assist you should you decide to hire a private investigator from our team.

Why Your Business May Need a Private Investigator

Most people think that a business only needs a private investigator when something goes wrong. Some think that a private investigator is only hired for investigating personal matters such as infidelity or finding missing children. Private investigation services have evolved by quite a lot in the past decade. These days, more private investigators are working with businesses than investigating personal matters.

Nowadays, there is an increasing number of small businesses and entrepreneurs who hire private investigators for a variety of private investigation services such as tracking business partners, doing background checks, and more. Below are the ways that a business may benefit from hiring a private investigator.

Referrals to Attorneys

Private investigators work with lawyers from a lot of fields. They know who overcharges clients, who has a less than desirable track record, and who’s the best. If you want to know which lawyer you should hire for your business, you should consult your private investigator.

Due Diligence Report for People in Key Positions

It isn’t easy to pick someone who will take care of your business the way you would. You certainly can’t afford to hire the wrong CFO. An unprofessional Chief Financial Officer with a history of money problems can leave your business vulnerable to theft from within. A few hundred dollars spent on a private eye’s services can save you thousands or millions down the road.

Smoother Business Acquisitions

It would be a disaster to acquire a business that you know nothing about; hence, a background check is a necessary first step to make sure that you’re not wasting your investment. The information gathered from a background check can also be used as a trump card in negotiations.

A private investigator can provide you with the following data:

  • Property information
  • Corporate assets
  • Parent companies
  • Current and past employees
  • Risk assessments
  • Officers and directors

Look Up Investment Opportunities

Investing in other companies or businesses can be risky. A private investigator check a company and find out if a potential partnership with them will be truly beneficial for you. You can’t beat accurate information to support business decisions especially when dealing with possible issues, bad employees, existing issues in the company, and pending lawsuits, if any exists.

Background Checks

Not only is it smart to background check potential partners, investments, and acquisitions, it is even smarter to make sure that new hires for your business have undergone a background check. One rotten tomato in your staff can spoil the rest. A private investigator can look up risks, uncover patterns of illegal or irresponsible actions, verify educational backgrounds, and check job history to make sure that you have honest and qualified employees. In the event that you suspect a member of your team has been up to no good, a private investigator can put that person in surveillance to verify your suspicions. Imagine the peace of mind you’ll get when you can get clear answers whether an employee has been disloyal or not.

Are you thinking of availing of private investigation services for your business? Contact us at Haywood Hunt for your obligation-free initial assessment. Talk to us about how you want us to help your business grow stronger.

 

HACTIVISM Taking Aim at the Manufacturing Sector

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When hacktivism enters in to discussions, the “Anonymous” group and “Occupy Movement” is often what comes to mind. While there are many groups and individuals who align themselves with this ideology and practice, the consistency amongst them is their intention and their purpose. On the Anonymous side, the global hacking community has been associated with taking down websites from mainstream media, stealing data from servers of financial institutions and compromising personal information from A-list celebrities.
Much like any activist group, mass inception and global identity and recognition doesn’t happen over night. Individuals aligning themselves to these causes and finding like-minded groups take time. Through their tenacity and perseverance, their popular following is expanding at a rapid pace.

To illustrate this point, look no further than the Twitter account of Anonymous. Their current following is upwards of 1.67 million people. While it should not be suggested that all of these individuals are fellow hackers or share in the same beliefs, one can safely assume that there are individuals who wish to stay so “dark” that they have no social media presence at all.

Any profile on any website starts with but a mere one follower. From there, the audience grows and with it, the amplification of their cause.

In the final days of 2016, Anonymous and an allied group named HackBack, set their sights on the Bildeberg Group. During this attack, the hackers gained access to their website. They placed an ominous warning to the members of what they called “the political elite”. They gave the membership 365 days to act for the common people or further hacking incidents would occur.

This is at least the second time this group has become prayed upon; The first coming in June of 2016, during their annual meeting. A DDoS attack rendered their website inaccessible to the delegation and the general public during that time.

Roughly 150 members of the Bildeberg Group attend this annual conference to discuss matters relating to politics, economy and of course, industry.
Not only have the number of devout followers increased rapidly over a short period of time for these groups, but they also have become more elaborate in their methodology and delivery. The advancement of technology and the ease of its access can be given partial credit to this.

Recent Hactivism Incidents

January 11th, 2017, an affiliate group of Anonymous announced publicly that they would commence occupying Guildhall Square in Ireland. The group provided the exact date, location and time of this movement…to bring attention to austerity through continuous and growing protests.
April of 2016, Gold Corp servers were illegally accessed and digital files were stolen. The information stolen from Gold Corp included employee personnel records, internal correspondence and external emails, budget reports and contact information of international associates.
In March of 2016, the website belonging to BCGold Corp was manipulated by hackers. The mainpage was replaced with a YouTube video of Rick Astley’s hit “Never Gonna Give You Up”. An Anonymous group calling themselves #OpCanary took responsibility for the attack.

This account has roughly 1700 followers and has posted as recently as September of 2016. The description in their bio speaks volumes of their previous actions and should give some insight in to what future plans they may have.
“Surveillance and military corporations are symptoms. Resource Corporations are the disease.”
Contrary to what their name may suggest, these groups have been quite open about their intentions.

The hackers took another step with the information. They compared portions of the data they had obtained through countless publicly accessible social media platforms, such as LinkedIn. The information from payroll, email correspondence and budget reports all became much more relevant when compared to social media posts. Again, this is the very same information that the individual employees chose to make public through social media.

There is a delicate balance between the utilizing social media for corporate branding and increasing the reach potential of an organization against the necessity to effectively safeguard physical and cyber security of the company and its employees.

The frequency of hacktivism activities will continue. Being mindful of these groups and their intentions will serve to anticipate actions taken against corporations and agencies. Continuously measuring and evaluating the security of companies, their partners and their employees will work effectively to limiting the risk of additional disruptions, liabilities and financial losses.

Guilty Plea by Former Concrete Equities Exec in $20M Fraud Case

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1,200 investors were defrauded for a total sum of more than $20 million in an investment scam, and one of the involved pleaded guilty for his role in the scheme. Sounds like justice? It might seem like that until you hear that he’s not likely to spend a minute of time in jail.

The Guilty Plea

Varun Aurora, a former concrete equities executive pleaded guilty to fraud regarding his role in tricking around 1200 investors out of $20 million. The Securities Commission asked the court to distribute $1.8 million of Aurora’s frozen funds to his victims.

Aurora, 33, pleaded guilty to a single fraud charge of $5,000 in a courtroom packed with many of his victims. Some of the victims could even be heard crying amidst all these. A few of the victims shared that they felt suicidal while some shared that they felt traumatized. Many of Aurora’s victims are retirees or nearly retired who are now facing having to work for a few more years to recuperate from the losses brought on by the fraud. The other charges against him were dropped.

Prosecutor Stephen Johnson read aloud some of the statements from Aurora’s 98 victims who shared victim impact statements with the court. One Gordon Shaw shared that he lost his home as a result of investing in the fraudulent company. His victim impact statement shows that he called those who were involved in the scam as ‘greedy men’. Shaw also wrote that he is upset, disappointed, and unable to relax about the matter as he is having feelings of betrayal.

The Scam

The scam involved promising investors a return of more than 5x (500%) if they buy a stake in an undeveloped beach property which was supposedly in Mexico. No such development exists according to Johnston.

Donna Anderson and Denise Hamilton both lost money when they invested with Concrete Equities. The ladies expressed that they want to see Aurora get some jail time for what he did.

Both women shared that the money they lost through the fraudulent company has had a huge impact on their lives. They thought they’ll be doing well in retirement only to find out that it was all a lie. Anderson described the financial impact as ‘horrendous’.

Aurora was a former executive at Concrete Equities who was also an officer of the real estate project which deceived investors. The project, called El Golfo, presented investors with exaggerated and untrue statements. Even Aurora’s education was misrepresented.

El Golfo raised $25 million in 2009 and the project collapsed afterward.

Aurora’s Involvement

Johnston said that Aurora’s involvement in the fraud is minimal but he also knew what was going on and simply turned a blind eye. Because of this, prosecutors Brian Kiers and Stephen Johnston together with defense lawyer Brian Beresh recommended a 2-year conditional sentence for Aurora.

As part of his sentence, Aurora has paid $1 million in restitution. 9 of his family members were also in court. He came back voluntarily to face his charges after he was arrested in India.

Do you suspect that you’re being targeted by an investment scam? Contact us and we’ll see what we can find out with our private investigation services. Inquiries are obligation-free!