Due diligence is more than ticking a box; Vcheck Global’s experienced researchers follow the clues—and their expert instincts—wherever they lead. The following case study highlights the power of public records research combined with an experienced research team. This combination can uncover salient information providing clients with the necessary information to confidently conduct business.
A Vcheck Global client ordered a report in late 2020 on a seemingly low-profile individual (the Subject) associated with a number of healthcare companies in Florida, the majority of which were newly registered. In the course of investigator research, the Subject was linked to several other entities, including investment firms and a series of companies involved in metal alloys. Regarding the latter, court records indicated an overlap between the Subject and another individual (Individual Two), whom the Subject replaced as CEO for a brief period before resigning amidst a class-action lawsuit and related investigation into the company’s accounting practices (“the class action”). Individual Two, court records noted, had been charged with criminal fraud for their actions in a prior CEO role with a different company.
Notably, the Subject was a VP of the prior company as well, and their tenure overlapped with that of Individual Two. While it is not unusual for individuals in the same industry to work together in different roles, the similarities in the allegations levied against both companies, regardless of the fact that these companies shared little in common besides the Subject and Individual Two in management roles, raised red flags to Vcheck Global’s research team. In response, the research team noted the potential risk issue and set out to identify any additional affiliations between the Subject and Individual Two, beyond the scope of the research initially requested by the client.
The research team’s assumptions proved correct. While initial screenings uncovered only minor adverse information related to the Subject himself, the expanded research scope traced the Subject’s link to Individual Two back to the 1980s, when both individuals attended university together and even shared a major. From there, the duo worked together at several firms, with the Subject joining Individual Two at a financial company after graduating. Individual Two consistently held more senior roles with the Subject holding junior positions, which limited the latter’s exposure in media and litigation related to those companies. Furthermore, allegations of improper accounting followed the pair across multiple firms; including the fraud mentioned previously, and a settlement of the class action for $7 million. Additionally, posts on online message boards speculated about a scheme by Individual Two and their associates, including the Subject, to maintain control over the metal alloy company. While the posts contained little verifiable information, they were deeply critical of Individual Two, their family, and their associates.
But what had become of Individual Two since they were convicted? Individual Two left the metal alloy company in 2006 and was convicted of criminal fraud in 2011, only to resurface in 2017 alongside the Subject in SEC filings, and again in 2019 in court documents that, once again, named the duo—suggesting they were improperly infringing on the metal alloy company’s trademark by operating an unrelated company under the same name. An unusually sparse LinkedIn profile matching that of Individual Two listed them as a managing director of one of the Subject’s most recent medical industry affiliations.
This information, along with the knowledge of both individuals’ shared history, shed new light on an otherwise unextraordinary subject. These revelations allowed the client to make a fully informed decision about exactly with whom they were partnering, despite their interactions having been limited to the Subject. Contact Vcheck Global today to learn how due diligence investigations can help you mitigate risk at your firm.
Maxine Janerka is a Senior Associate at Vcheck Global.
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