Due diligence is a key component of business transactions, often involving a thorough review of financial records, legal documents, and background information to ensure an individual’s or business’s legitimacy. Unfortunately, aliases significantly impede the due diligence process, introducing layers of complexity that obscure critical details.
In this article, we’ll discover how aliases complicate due diligence and discuss key risk mitigation measures.
Aliases: General Background
Aliases are alternative names used by a person or entity (a business, organization, etc.) for various purposes. There are many reasons why someone might choose to use an alias, some of which are entirely innocuous.
Someone might use aliases for legitimate reasons, like privacy, security, cultural norms, or personal branding. Name variations are also considered aliases, so many people using one might not know it in the first place.
For example, maiden names are considered aliases; investigators must pinpoint maiden names because they can conceal criminal offenses. Nicknames too, as common as they are, are considered aliases.
In Latin American countries, it’s common for a person to use two last names, hyphenating their mother and father’s surnames (referred to as apellidos). This practice has implications for due diligence, as last names can confuse the research process and act as a red herring for investigators. During due diligence, investigators must unearth all of a subject’s name variations, including their maiden name, to ensure they don’t miss adverse findings.
Others might use an alias to conceal their identity for less savory purposes, and therein lies the critical issue with aliases in due diligence: They’re a linguistic bait-and-switch. Aliases disguise a person’s identity, allowing them to escape from litigation, rulings, or judgments.
Other adverse reasons someone might use an alias include evading legal action, perpetuating fraud, or PEP concealment.
Digital aliases are a category in and of themselves: Some people use digital aliases to conceal multiple accounts and, in less savory cases, hide their digital activities. These further muddle the due diligence process, as investigators are tasked with untangling the web left by a person’s multiple online identities.
We’ve seen many alias cases: A lending client asked Vcheck’s investigators to run background checks on their potential client, a commercial real estate developer. After conducting our best-in-class public records research and extensive checks, investigators found the Subject was trying to conceal $15 million in debt under their former name, changing it to hide their criminal background.
In another case, an investor client wanted to confirm the background of a wealthy Greek heir who’d invited the client to invest in his companies. However, the Subject provided the lender with an alias, entangling the process.
Vcheck’s investigators used public records research and third-party database searches to determine the Subject’s real name quickly. After conducting social media screening, investigators were confident that the Subject’s claims of being a wealthy son of a Greek investor were baseless. Worse, they uncovered a bankruptcy charge–a serious reputational and legal risk.
Aliases & Due Diligence
Aliases can complicate the due diligence process, masking a subject’s true identity and history.
Just like they conceal identities, aliases conceal risk. Uncovering an individual’s alias is crucial to understanding a Subject’s professional associations, background, and the risk their partnerships and investments pose to a firm or organization.
Without knowledge of aliases and name variations, due diligence processes are incomplete, and risk goes undetermined. Data may be fragmented, causing difficulties in preparing a comprehensive profile, and legal restrictions, particularly concerning privacy, may come into play.
How Vcheck’s Intelligence Uncovers Aliases
Combing through an individual’s aliases is challenging, especially when investigators are unaware of them in the first place. Here’s how Vcheck copes with this challenge:
- Third-party databases. Vcheck’s investigators determine alias use immediately, using third-party databases to unearth what’s tied to a Subject’s social security number. We also use court records during this step, relying on both tools to identify patterns.
- Human Intelligence. Vcheck’s investigators observe information through a human lens, which is the most critical part of alias due diligence. Human intelligence (also referred to as HUMINT) provides context, coloring an investigation. For the same reason, due diligence data aggregators are insufficient because they rely on disparate information. In the real estate developer’s case, data aggregators were why his alias remained hidden for such a long time.
- Discreet Interviews. These are another type of HUMINT insight; these interviews involve questioning certain members of a person’s network, which can help uncover alias timelines and usage. These interviews rely on building trust, asking indirect questions, and leveraging extensive source networks to verify sources (after all, a human source’s information is only as strong as their expertise on the subject in question).
- Digital Footprint Analysis. Vcheck’s investigators use extensive public records research and social and digital media analysis to pinpoint risk more accurately. In some cases, this involves looking through multiple accounts to find the hidden associations needed to elucidate aliases. Digital analysis helps contextualize usage and separates fact from fiction, as not all those using aliases are doing so to conceal darker dealings.
In the professional landscape, where transparency and accountability are essential, thorough alias due diligence is critical. Aliases perplex the due diligence process, creating unnecessary complexities and adding noise to an investigator’s research.
Luckily, Vcheck uses joint human and digital intelligence to uncover a subject’s aliases: A combined approach helps pinpoint alias usage and timelines, as a single person may have multiple aliases simultaneously.
Contact us to learn more about how Vcheck’s best-in-class research methodology helps firms more accurately pinpoint risk.
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