Multi-resource Fraud Investigation in the Czech Republic
Questa was engaged by a listed US-based company (the “Client”), to investigate the allegation of fraud in its Czech subsidiary (the “Company”).
The Client received information from a whistleblower, that the management of the Company may have been involved in a large scale kick-back scheme in a business, that is largely dependent on outsourced workforce.
Questa’s task was to conduct a multi-level investigation, in order to confirm or discard the allegations in the first place, and next help the Client understand the scope of the scheme, the parties involved and the potential related risks.
- A multi-stage investigation
- Providing support to the Client
- Phased approach and involvement of various tools
Scope of work:
The case required a phased approach as well as an engagement of diversified resources.
In the first phase, not to alarm the Company’s management, an extensive open source investigation was conducted, that was aimed at profiling the management board members accused of the potential fraudulent activity.
Subsequently, a relationship analysis was conducted, that allowed to trace the links among the suspected parties as well as the subject company vendors. In phase 2 of the investigation, surveillance was launched on the key suspects, to obtain further confirmation to the information obtained through the publicly available sources.
Based on those steps it was possible to conclude that the possibility of the fraudulent activity was very high, due to the fact that:
- the management board members lived well above their means and were found to have multi-million investments and assets;
- multiple company vendors were found to be closely affiliated with the management board members;
- key vendors were found to be one-person companies, registered on the Company’s address or in virtual offices, that merely served the role of a broker between the company and the actual service providers;
- key decision makers within the organization were relatives of some vendors or maintained close personal relations with them.
Armed with this knowledge, the Client decided about commencement of a deep internal investigation as Phase 3. In the first place, electronic data was secured from the devices of the suspected individuals as well as from the company servers.
Next a detailed review of accounting records and other internal company documentation was conducted.
- Detailed report
- Crime notification
- Several months of customer support
Result:
The Client was provided with a detailed report confirming the original allegations along with explanation of the schemes in place and identified parties involved. The Client used the report to undertake legal steps along with local legal advisors, including notification to the Police.
Subsequently, at various stages of the legal proceedings, Questa was asked for further targeted support to identify additional evidence to support the strategy of the legal team.
