The World Bank Group, Washington, DC

Financial Institution Bid-Rigging The Washington Post reported on July 16, 1998 the headlines “World Bank Hires Auditors to Probe Its Own Spending” “Possible Kickbacks, Embezzlement Cited”.  It states: “World Bank President James D. Wolfensohn acknowledged yesterday that within the past two months he has setup a special internal fraud team and hired the global accounting firm PricewaterhouseCoopers.” The Post reported on October 24, 1998 an article entitled ‘World Bank Probes Pakistan Project’ where it referred to PWC and its work on tracing ‘Elwan’s international holdings and vast financial records of the Pakistan projects.’ As the engagement partner, I led our... Read More...

Bre-X Minerals, Calgary, AB

Securities Investor Fraud Many Fools’ Gold May 5, 1997 Headlines: Bre-X Minerals Limited was a “Canadian mining exploration company that falsified the gold strike (in Indonesia) and then hyped its stock price to the heavens” from Wall Street Journal. The Washington Post headlines read “A Lode of Lies: How Bre-X Fooled Everyone No Deposit, No Return”. The Calgary Sun, home city of Bre-X in Canada headlines read “Bre-x: There’s No Gold - MASSIVE FRAUD”. Two days earlier, before the story had broke, I had arrived in Calgary to attend a meeting in the boardroom of Bre-X the next day with... Read More...

Signet Bank, Richmond, VA

Financial Institution Loan Fraud Tracing the proceeds in the ‘Bank Caper of the Century’ “BANK CAPER OF THE CENTURY” is how Virginia Business magazine described the way former Signet Bank in Richmond, Va., was victimized by John Reiners, a former Philip Morris executive who obtained more than $300 million in bogus loans through Nelco, a local computer leasing company and a New York computer firm owned by Ruffo. Briefly, the two men invented a fictitious secret project for which the tobacco company supposedly needed millions of dollars worth of computers. Two Richmond banks and six other international lending institutions relied... Read More...

IBM, Amsterdam, Netherlands

Securities Investor Fraud A Personal Pension? The internal auditor for this Fortune 100 Company raised kickback allegations involving someone in management responsible in Europe for investments made with the company’s pension fund. Counsel retained me to conduct an investigation in the Netherlands. When company documents were examined, it became apparent that these allegations had been raised without considering alternative explanations and situations that, in the end, did answer the issues. However, to be safe, the investigation was extended to include meetings with certain brokers used extensively by the pension director. There was no foundation for the allegations. Read More...

Dormant Bank Accounts of Victims of the Holocaust, Switzerland

Financial Institution - The Volcker Commission Asset Search A Search for the Assests for the Victims of the Holocaust Mr. Paul Volcker, Chairman of the Independent Committee of Eminent Persons issued a press release on November 19, 1996 announcing “…its Mandate and Instructions for the investigative audits of dormant accounts, financial instruments, and other assets deposited in Swiss banks by the victims of Nazi persecution”. Price Waterhouse was one of the three firms chosen and I was one of the three US partners selected to address the Mandate. I was also able to again work with a good friend, Hans... Read More...

Sunrider International, Los Angeles, CA

Retail Tax Evasion A ‘yen’ for Asian Antiques Counsel in one of the largest income tax cases in the U.S. involving a privately held international company was required to refute allegations including money laundering and customs violations made by the U.S. government. The investigation focused upon the company’s business activities in Asia. The husband and wife who owned the company were indicted in federal court for conspiracy, tax evasion and smuggling, where it was alleged that they had underreported their 1987-1990 income by more than $125 million. It is essential that the forensic accountant in his financial fact-gathering role identify... Read More...

Marriott Hotels, Washington, DC

Construction Bankruptcy Fraud Judgment but no money to pay This was a particularly detailed accounting investigation where Counsel was looking to establish evidence of fraud by the contractor who was attempting to avoid a $3 million judgment in a fraudulent conveyance action. Marriott terminated the contractor and filed a lawsuit and soon thereafter the typical reaction occurred: The contractor began to funnel new business to an otherwise dormant sister corporation. These projects had contract values of some $81 million and their transfer ultimately lead to the contractor’s insolvent position. By analyzing the timing of the relevant transactions and comparing those... Read More...

IBM, Poughkeepsie, New York

Manufacturing Bid-Rigging, Management Fraud Roger was Too Busy to Chat Hi-tech products can have a relatively short shelf life, which requires procedures including environmental to properly dismantle parts that are used, discontinued or deemed to be surplus. Counsel’s client had chosen through the bid process to contract with various vendors to obtain this service with their agreement requiring the vendors to share their sale proceeds from recycled parts and to not sell parts scheduled for scrap. However, field investigators had found and confirmed the movement of scrap in the gray market and our mandate was to determine if any person... Read More...

Guarantee Company of North America v. Gordon Capital Corp, Toronto

Securities Fidelity Claim, Management Fraud A Lesson in Derivatives Gordon Capital was an investment dealer and brokerage firm in Toronto that carried a $25 million fidelity insurance policy with Guarantee for “dishonest and fraudulent acts committed by an employee…” and Eric Racher was a Gordon partner responsible for the Derivative Products Group in Toronto. Bottom line: Because of Rachar’s misrepresentations, Gordon accepted worthless collateral which exposed the firm to high risk. On June 14, 1991, the CEO of Gordon received a phone call from a third party who expressed some concerns and two weeks later I received a phone call... Read More...

Government of Romania vs. former President Nicolai Ceausescu

Government Political Corruption, Asset Search A Journey Inside the the Padded Walls Investigative findings for this case are in the public forum as the result of a television documentary. This case reinforced my belief in the importance of the human element in fraud investigations, irrespective of the culture. Your first arrival to meet the client is always special, and here on April 5, 1990, Rod Stamler and I were greeted at Bucharest’s Otopeni airport by the military, whisked around armed security and taken directly to the Ministry of Justice in Bucharest, via a government vehicle, a black Dacia, otherwise aka... Read More...