Case study: CRI Group’s due diligence reveals fraudulent company

Recently, a multinational medical supply company sought to contract with a potential partner in Egypt. The company engaged CRI Group’s due diligence services to ensure that there were no regulatory or reputational problems associated with the outside group, and sought information regarding their track record, integrity and reputation.

While researching the potential partner, investigators found a lack of information among corporate registration authorities, the local chamber of commerce or other resources to confirm that the company was who they claimed to be. Research showed no physical locations – in fact, the main address claimed by the company was found to be a residential site with no indication of business operations.

More negative findings
Things just weren’t adding up in the effort to establish that the potential partner was even a legitimate business. Skepticism was confirmed when our agents researched court and police resources, finding that the company’s principal was previously charged with “criminal breach of trust” and there was still a trial proceeding with regional trial courts. Three other civil damages claims against the principal were discovered, with USD $1.2 million claimed in liabilities.

By engaging CRI Group to conduct due diligence at the outset, the client was protected from entering a bad deal that could have resulted in severe economic loss and a potentially damaged reputation.

Due diligence on potential business partners is vital to confirm legitimacy and reduce the risks associated with such professional relationships.  CRI Group's global integrity due diligence investigations, DueDiligence360™, provide your business with the critical information it needs in making sound decisions regarding mergers and acquisitions, strategic partnerships and the selection of vendors and suppliers.

The tools of our trade
CRI Group investigators and third-party risk analysts employ a proven, multi-faceted research approach which involves a global array of databases, courts and public record searches, local contacts, industry and media resources, and in-depth web-based research. Our resources included:

  • International business verification
  • Individual business interest search
  • Personal profile on individual subjects
  • Company profile on corporate entities
  • Historical ownership analysis
  • Identification of subsidiaries & connected parties
  • Global & national criminality & regulatory records check
  • Politically Exposed Person database
  • International media research
  • Country-specific databases that include litigation checks, law enforcement agencies & capital market regulators
  • Company background analysis
  • Industry reputational assessment
  • FCPA, UK Anti-Bribery & corruption risks databases
  • Global terrorism check
  • Global Financial regulatory authorities check
  • Money laundering risk database
  • Financial reports

Effective and comprehensive third-party risk management can save your organization from risk, liability and other perils associated with outside parties that seek to engage with your business. Uncovering the unknowns and having the proper research and information are keys to making sure your potential partnerships can be lasting and successful.