Corporate disputes
The Client suspected that employees of its Russian representation colluded with organizations that the Client supplied. Our team proved these suspicions correct, exposed the scheme and drafted a strategy that helped the Client to resolve the situation. Although the authorities became aware of the scheme taking place, the Client didn’t encounter any negative legal ramifications and continued doing business in Russia.
Challenge / Opportunity
A major manufacturer of high-tech engineering equipment received troubling reports from its local office. Apparently, the representation filed inaccurate financial data, which made the client suspect a double game having taken place in its local sales department consisting of several managers.
First of all, the team retrieved information about the sales department and evaluated key managers who were connected to business processes that alerted the client.
Forensics measures that followed allowed narrowing down the searches to those managers who actually colluded with third parties unbeknownst to the head office. Additional checks allowed assessing a possibility of the involvement of each manager in corrupt practices.
Two sales managers had apparent expenditure that didn’t meet their income in the client’s company, implying external sources of wealth. Further investigation showed that they indeed abused corporate practices that not only resulted in shortfall in profits but also put the client’s positions on the local market in jeopardy.
The scheme involved overpricing and kickbacks legalized through a fake investment contract. Moreover, the company's distributor, who was involved in the scheme, turned out to evade taxes and bribe local customs authorities.
As soon as client discontinued his business with this distributor, the scheme collapsed. A company that colluded with the client’s managers could no longer bribe the authorities, who suspended the criminal investigation for several years. The client cleared himself off suspicions that he anyhow favored these practices. A criminal investigation that followed revealed tens of millions of dollars in underpaid taxes, while the client remained intact.