by admin_lauth | Sep 2, 2016 | Private Investigations News
After the 2007 to 2008 financial crisis and subsequent Great Recession, several federal regulations and laws have been put in place to minimize the amount and extent of securities fraud. Security fraud, also known as stock fraud and investment fraud, includes any practice that induces investors to make financial or investment decisions on the basis of false information, particularly in the stock or commodities markets. Government agencies have worked to limit the financial damaged created by fraudulent activities by implementing whistleblower programs that empower and reward individuals who come forward with information regarding securities fraud or fraudulent activities.
The United States’ Securities and Exchange Commission (SEC) has an entire office designated to whistleblowers. The Commission believes that whistleblowers can be invaluable tools, helping the Commission to identify fraudulent activities, naming those involved, and detecting these activities much earlier. A major perk of the whistleblower program is that the Commission has been able to minimize the financial damage incurred by investors due to securities fraud.
The Dodd-Frank Act created in 2010 established the Dodd-Frank Whistleblower Law in order to encourage company employees to come forward with information. The Dodd-Frank Whistleblower Law has given more power to the SEC to detect potentially financially disastrous securities fraud. According to the SEC website, the governmental department “oversees the key market participants in the securities world including securities exchanges, securities brokers and dealers, investment advisors, and mutual funds”. Some states have followed the national government’s model by adopting individual whistleblower programs. Indiana and Utah are two examples of states that have followed the federal government’s example. Edward Siedle, a representative of a whistleblower in Indiana stated “leveraging the power of the whistleblower is tremendously helpful, and it’s not costing the state anything.”
While the Dodd-Frank Whistleblower Law establishes that whistleblowers can and should come forward and any interference by the company in question is strictly forbidden, the law does not force companies to establish their own programs aimed at increasing company transparency. Private Investigators can lobby companies to establish whistleblower programs that will help prevent securities fraud and other illicit activities. By creating company-wide whistleblower programs, companies can save significant amounts of money for the company itself and investors.
The Securities and Exchange Commission Chairwoman Mary Jo White stated in a speech to the Ray Garrett Jr. Corporate and Securities Law Institute at Northwestern University School of Law in Chicago that she “would urge that, especially in the post-financial-crisis era, in which regulators and right minded companies are searching for new, more aggressive ways to improve corporate culture and compliance, it is past time to stop wringing our hands about whistleblowers”. According to Investment News it has been over five years since the SEC created the whistleblower program, and as Chairman White explained the SEC has “seen enough to know that whistleblowers increase our (SEC) efficiency and conserve our scarce resources”. The Chairwoman also noted the importance of individual internal compliance programs in companies. Hiring a Private Investigator to advocate for a company-wide whistleblower programs can prevent costly legal fees, poor publicity, and loss of faith in the company. The financial damage to a company because of securities fraud can be astronomical, and hiring a PI to help the company create or expand a whistleblower program can save companies millions, if not hundreds of millions of dollars.
For More Information on Whistleblower Programs Visit: www.Sec.gov
Tiffany Walker – Blog Writer, Lauth Investigations
by admin_lauth | Sep 2, 2016 | Private Investigations News, Tips & Facts
According to the Federal Bureau of Investigation there were approximately 8,277,829 property crimes reported by law enforcement in 2014. These property crime reports include burglaries, vehicular theft, and larceny-thefts, with an estimated 14.3 billion in financial losses for the victims of these crimes. Of the total number of arrests made by law enforcement, only about 10 percent were for property crimes—even though property crimes make up a large sum of criminal reports.
Police Departments across the country have difficulty prioritizing theft investigations over those involving physical violence. Consequently, the theft of your grandmother’s pearl earrings will most likely not be a priority for the local law enforcement. According to the Las Vegas Review-Journal, a police department can have to manage up to 50 reports of burglaries and around ninety percent of these cases will go unsolved.
Art Theft
The United States’ largest property crime, the Isabelle Stuart Gardner Museum heist, still remains unsolved. The financial losses incurred by the one property crime totaled more than $600 million. None of the stolen paintings have been recovered even after two decades. Private art collections or family heirlooms can be targets for criminals. However, private investigators can be extremely useful tools in finding your stolen property when law enforcement cannot help. Private Investigators have the experience and necessary tools needed to find your property in a timely manner. Unlikely police departments, private investigators can give your case individual attention in order to recover your valuables.
Electronic Theft
The FBI’s National Crime Information Center also tracked the number of reported electronic thefts in the United States. Laptop thefts have increase almost fifty percent from 2007 until 2009. The number of reports jumped from 73,700 to 109,000. During the same period, the number of reported thefts of cell phones also increased about 33 percent. More shockingly, the amount of theft of music players reports increased over ninety percent, with the number of reports rising from 8,900 to over 17,000. More recent estimates suggest that 1.6 million smart phones were stolen in 2012 to 3.1 million in 2013.
Stolen personal electronics are not always reported to police in order to avoid potentially wasted time. Many people have opted for a private investigation in order to ensure more attention to their particular case.
How Private Investigators Can Help
With property theft it is important to act as quickly as possible. Contact the police to create an official report, but also hire a private investigator to ensure that you will have the best chance of finding your stolen items. Private investigators are able to dedicate many more hours than individual police officers because they often have a smaller caseload.
Private Investigators Can:
- Conduct interviews with witnesses, pawn shops, and institutions
- Dedicate more hours to a single case
- Provide positive results more frequently than law enforcement
- Begin investigating right away
- Depending on the victims preferences, collect evidence for prosecution
- Track the sale of stolen goods online
- Conduct a more inconspicuous investigation—in order to avoid tipping off the perpetrator
Stolen items can have significant sentimental value and therefore are priceless, hire a private investigator to ensure you have the best chance of being reunited with your belongings.
Tiffany Walker – Blog Writer, Lauth Investigations
by admin_lauth | Sep 1, 2016 | Private Investigations News
Stolen Family Jewelry
In December 2012 Lauth Investigations International’s Indianapolis office was retained to locate a stolen wedding band—valued at $35,750.
The Case
The owner of the ring was a local grandmother, who we will refer to as Client X. Client X was the grandmother of three, and the mother of two older children—both of whom were married. One of her grandchildren was a special needs child, and required near-constant care. The financial burden of the care was becoming too much for her son’s family. Meanwhile, the client and her daughter-in-law were estranged for many years.
Client X briefed Lauth Investigation’s Private Investigators on the case, and she was adamant that her daughter-in-law, the one with the special need son, could be responsible for the theft.
Client X insisted that she was responsible, and that her son had no knowledge of his spouse’s thieving behavior. In the briefing for Client X, she further explained that she was loaning her son money to pay for various things for their special needs son such as education, clothing and other necessities.
She also had purchased the house they lived which alleviated them of any mortgage or rent payment. The client was firm in remembering where she left the ring inside the home and felt comfortable implicating the daughter-in-law—as there was a history of small items disappearing from inside her home.
The Investigation
The client had contacted other local private investigation companies but they were unable to assist. Lauth Investigators requested that Client X file a police report, and to get the detectives name and report number for reference when speaking with vendors.
Lauth Investigations was confident they could utilize local sources in gathering evidence leading to the daughter-in-law and perhaps even locate the ring.
Lauth Investigators began the case by compiling a strong data timeline to track the various auctions and pawn shops. Investigators worked on a critical timeline to locate the ring before it was sold.
Investigators requested photos from Client X of the daughter-in-law, the ring, and any insurance statements or police reports she filed.
Investigators then compiled a geographical list of auctions and pawnshops near the subject’s home in order to interview shop owners and request receipts.
On Day-Two of the investigation, Lauth Investigations uncovered a receipt from a location nearly one-hour from the suspects home. Evidently, the suspect had sold the ring to a small jeweler for over $8,500.00—just two days after the ring was stolen.
After Client X authorized Investigators to proceed confronting her daughter-in-law regarding the theft, investigators took the receipt and written statement from the jeweler and then attempted to obtain a confession from subject. Investigators attempted to confront the woman to discuss but she adamantly denied the theft and refused to talk any further.
The confession attempt interaction then started a thunderstorm of conflict in the family and people began to shut down.
Investigators then scoured other jewelers and auctioneers and found an additional receipt for $4,000 from months before the other theft.
The Results
Lauth Investigators then contacted the original law enforcement detective on the case and reported their findings.
One week later suspect was arrested.
Client X was very happy to have received closure on her wedding ring, and she recommends anyone having a household theft problem to contact a private investigator.
– Thomas Lauth, CEO, Lauth Investigations International
by admin_lauth | Jul 22, 2016 | Slider
Result: Semi-truck of Product Returned & Convictions
by admin_lauth | Jul 13, 2016 | News
Why You Should Conduct Due Diligence for Corporate Merging or Acquisition of Another Company?
Indianapolis Private Investigator, Lauth Investigations can assist companies with the merger and acquisition due diligence process.
Just like you would do a background check on a potential employee, it is also important to do a comprehensive due diligence check on another company that you are considering merging or acquiring. While a business deal may seem lucrative and advantageous on the surface, complex and devastating problems could be lurking below the surface. By determining a potential company’s background and assets, you will be preventing business disasters by determining the factual background of a company as well as lowering the risk of crime within the business.
While Michael Sisco may be describing due diligence as related to technology, he still has several key concepts that every business may consider which follow as:
- Stability
- Financial cost trends
- Individual “flight risks”
- Business continuity issues
- Key players (2)
What exactly is involved in the due diligence process? First of all, a confidentiality agreement is requested from the seller by the buyer. This is basically an agreement to gain the knowledge about EVERY aspect of the business before you make an agreement with the seller. If you do not make an offer in the end, this agreement ensures you will keep all information confidential. The following is a list of items that are typical in a confidentiality agreement:
- Financials–3 years of financials is typical
- Employees–title, wage, duties
- Vendors—relationship with company
- Inventory
- Equipment
- Furniture and fixtures
- Debts—It is vital you understand if you are acquiring any debt, and if so, how much
Due diligence also involves a review period, which can be agreed upon, and three critical issues are explored during this time period. Legal due diligence is important to determine if the seller has the title to sell the company which is essential if the seller is part of a franchise. The financial due diligence portion can determine if there are hidden assets or financial issues that need to be addressed. Commercial due diligence will determine the competition of the business as well as how the market views the business. If everything goes well and you decide to buy the business, consult someone to write a buy/sell agreement. (3)
Other key ideas to keep in mind: “Capital—If you have leftover capital, use it wisely, and don’t overspend. Employees—Review all employees again. Fire the ones that have red flags or hire new ones if they current employees are doing their job. Inventory and Equipment—Be frugal. Upgrade instead of buy brand new equipment.”
Keep in mind to not rely on verbal statements. Stick to the confidentiality agreement. If the seller is not divulging all information, there is probably a (shady) reason so look into a new seller. Do not try to conduct due diligence on your own, and do not neglect the due diligence process. It could end in disaster. (3)
The lack of due diligence can have significant unforeseen financial consequences. For example, the Victorian Funds Management Corporation lost $500 million dollars due to lack of due diligence and relied only on Google searches. Their choice in pursuing death funds by Life Settlements Whole Funds turned out to be a financial disaster. Instead of taking the time to properly check out the deal and listen to regulators who cautioned against it, they went through with the merger. If they would have performed due diligence, they would not have been discredited or have suffered such a substantial financial setback. (4)
Remember, when you merge with another company or acquire their company, THEIR problems become YOUR problems. These problems can be as minor as inflated labor costs or as disastrous as embezzling corporate funding. The solution to this potential risk is to ensure you conduct proper due diligence before you partner with another company. You wouldn’t want their mistakes to become the failure of your company. The positive aspect is that by acquiring or merging with another company can lead to more success for your business if the background check is conducted properly.
About the Author: Kym L. Pasqualini is founder of the Nation’s Missing Children Organization in 1994 and the National Center for Missing Adults in 2000. Kym is an expert in the field of missing persons and continues to advocate for crime victims utilizing 20 years’ experience working with government officials, law enforcement, advocates, private investigators, and national media.
