Protecting the innocent – Due Dilligence & Investment Fraud

abusive tax schemes | Protecting the innocent – Due Dilligence & Investment Fraud

Insider threats cost business $4bn each year

  • Hacker skims 35,000 customer credit card numbers
  • 14 Business bank accounts wiped out by phishing scheme
  • Investors scammed out of $14mm in ponzi scheme
  • Man with history of fraud hired as CFO ‘disappears’ Taking $2mm From Company
  • Vendor employees steal client’s proprietary data; sells to foreign government
Guest Author Greg George, Due Dilligence Expert

All familiar headlines we see too often.  At every turn there is someone who wants what you have and will go to extraordinary means to acquire anything they wish.  Moreover, most victims are unaware of how easily they can be taken.

Much of my time, and that of my colleagues working with their own firms, is spent educating professional services advisors and their client’s.  In most cases they have to ask first and unfortunately, it’s usually after a very expensive incident has occurred.

High Net Worth investor’s can be another challenge – they are ‘hot after the deal’ and often won’t stop long enough to think things through – one example, we were able to stop several clients from investing in 14 apparent Forex frauds just during the past six months.

Same rescue package for a few client targeted company acquisitions… offshore.  Numbers were great, threat of a bidding war with a competitor looming… classic get the deal done pressure.  However, none thought to check out the principals of the target company until we got a call from the transaction lawyer a week before closing – two of these guys were on the DHS and FDA hit list, the OFAC radar screen, and under investigation for financing terrorism.

A few thoughts on protecting your business operations and investment activities:

  • Do a little deeper vetting of your management and other ‘key hire’ candidates than is offered on the several thousand’s out there – same with suppliers and any private equity placements or business acquisitions you’re planning.
  • Always have trusted, outside subject matter experts assist you with concerns and evaluations.
  • If you operate a small business, buy a $300 desktop computer and use it ONLY for online banking and purchases – and use ONE dedicated credit card for purchases.
  • Limit access to critical data – if the employees’ duties have nothing to do with a specific project, they don’t need to know about it.
  • When someone leaves your organization, immediately delete their usernames, passwords, any other access from your systems (you’d be amazed at the number of companies that don’t do this).
  • If you’re seeking funding, beware of brokers requiring ‘up front’ fees.
  • If you’re offered equity funding, financing, a joint venture or other partnership, verify the ‘character’ of the guy who is making the offering, and the source of the money.

Above all, when the time comes for you to make a decision, excuse the MBA’s and lawyers from the room, and just use plain old fashion common sense.


Greg George is a senior advisor to professional services firms, CxO’s, investors, family office groups, and global banking center directors.  Greg’s firm operates an intelligence fusion center available to private sectors providing investigative and operational due diligence analysis, and guidance addressing security operations, fraud, compliance, internal investigations and countering insider and espionage threats.


Greg can be contacted by email: or visit

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