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Corporate Investigations Gone Bad

This has been a bad couple of weeks for private investigators.

First, there was the story of Credit Suisse, which hired private investigators to follow a former top executive whom the bank thought was trying to poach employees and clients. But the former executive got into a confrontation with the investigator hired to tail him. The investigator is facing a criminal probe, and the consultant who helped Credit Suisse hire the investigators to trail the executive committed suicide just this week. Now Credit Suisse is reeling from the controversy, saying that the surveillance on the former executive was “wrong,” which ultimately led to the resignation of the COO, who authorized the surveillance.

Next, there was the story of Neil Gerrard, a partner from the white-collar law firm Dechert, who was suing an investigative firm for spying on him after they placed a camouflaged camera on his property to try to gain access to a private Caribbean island where he was vacationing. Operatives were questioned by police after claiming that they were the nephews of the Gerrards. Police found a “large amount of electronic equipment, including a camera adjusted for night vision use” on one operative, who was denied entry to the island; and at least two operatives have been interviewed by British Police.

The investigative firm doing the work, Diligence of London, was allegedly doing work for ENRC, which Gerrard formerly represented. ENRC is being investigated by the UK Serious Fraud Office amid allegations of fraud, bribery and corruption, and is currently involved in litigation against Dechert and Gerrard, accusing them of breach of contract and overcharging for Dechert’s services.

Then yesterday, the Wall Street Journal posted a story about Greg Lindberg, who is facing criminal charges in what has been described as potentially “one of the biggest U.S. life-insurance insolvencies in recent decades.” Lindberg reportedly hired dozens of surveillance operatives to spy on “actual and prospective romantic partners, assembling dossiers on the way.” According to the Wall Street Journal, “Mr. Lindberg paid for dozens of surveillance operatives to tail the women up to 24 hours a day, taking surreptitious photos and sometimes putting GPS trackers on their vehicles.”

The firm that was doing the work? Apex International, a North Carolina firm that happened to be owned by Lindberg. (Funny how you can’t even find a website for the company.) It is interesting to note that GPS trackers are illegal in Apex’s home state of North Carolina without the permission of the owner of the vehicle.

Lindberg also spied on one woman by having someone secretly enroll in the school she attended, and tracked another woman by having one of his agents rent an apartment across the hall from where she lived to keep tabs on her. Investigators were told that the woman had “agreed to the surveillance,” but suspected that it was not true when one investigator said, “I realized what I was doing was horrible” when “I was putting fear in a woman in a certain situation.”

What can investigators and businesses learn from this?

Think Before You Hire an Investigator

Most of the casework that we do never gets to court, but every time we need to make an ethical or moral decision that may cross the proverbial gray line, I ask myself, “What would a jury of reasonable people think?” If there is even a hint of unscrupulous behavior, I won’t do it. It’s not worth risking my reputation, license or standing in the investigative community, no matter how much money it will make us.

If you are conducting corporate “espionage,” you should be asking, “How is this going to look when I read about it in the Wall Street Journal?”

If you think that placing a surveillance camera on someone’s private property to monitor the comings of goings might not look so good, don’t do it.

If you think that the CEO of a billion-dollar company using company funds to create dossiers on his prospective romantic partners might not result in favorable media coverage, don’t do it.

Or if you think surveillance of a former executive that could result in a confrontation might lead to weeks of bad public relations, don’t do it.

It might seem like overkill, but it might also save you from some serious embarrassment, like ending up on the front page of the Wall Street Journal.

The More Sensitive, the More Caution

If we get near that proverbial gray area, we typically won’t do the work. But if there is a really touchy case, which is either a sensitive topic (e.g., sexual harassment), politically motivated or dealing with powerful people, we advise you to proceed with extreme caution.

That means following the letter of the law to a T; using the most experienced, trustworthy investigators that you can find; and taking riskier steps only when you have exhausted every other possibility.

If you want to do surveillance on a former executive because you think he might be violating the terms of your agreement, go for it. But don’t skimp by hiring only a few operatives, who might get caught. And at the first sign of any issue, the surveillance should be broken off completely.

If you are going to do surveillance on a partner of a white-collar law firm, it’s probably not a good idea to trespass on private property.

On a personal note, I was personally surveilled by another investigative firm recently. These guys were all over the local Facebook page of my local community, surveilling the wrong house until they found me. And when they finally did find me, they had only one guy trying to follow me.

Spoiler alert! That didn’t end very well for them.

A Little KYC (Know Your Customer) Goes a Long Way

Businesses need to know who they are getting involved with.

Investigo GmbH, who carried out the surveillance for Credit Suisse, has Google reviews ranging from “Very unfriendly staff” and “Only fixated on money” to “Bad experience, not to be recommended, rude and stubborn,” resulting in 1.4 out of five stars.

All that took was a five-second Google search to learn.

Likewise, as an investigator, you need to know who you are working for, their motives, and whether or not they are going to push you into some unscrupulous behavior.

Would I track down an address for an attorney to serve a lawsuit? Absolutely.

But tracking down the lover of my client’s ex-husband in order to “deliver some boxes she left behind”? Nope.

Who You Hire Is a Reflection of You

The three cases I described above have one thing in common: an element of surveillance or on-the-ground work.

It’s clear that, at least in a few of these cases, the investigators were either breaking the law (e.g., going onto private property, attaching GPS trackers to unsuspecting vehicles) or at the very least skirting it in a really gray ethical area. 

It’s clear that there will be a lot of questioning of the judgment of those who hired the investigators.

Rightfully so.

Another Notch in the Belt for Open Source Intelligence

Over the past few years, there has been an explosion of information available to investigators through open source intelligence (OSINT) and public records. With the right training and access, there are millions of points of data available at an investigator’s fingertips, sources ranging from social media, historical domains and deep web research to historic newspapers, litigation filings and credit header information. There is an entire cottage industry of people who only do covert research, which, if done properly, is nearly impossible to detect.

At the end of the day it is hard to dispute the value of making in-person inquiries with friends, families, neighbors and colleagues, former business partners, or local law enforcement. Or doing surveillance.

But those inquiries have risks, namely that it may get back to the target of the investigation. There are, of course, times when only surveillance, interviews and on-the-ground work can get the answers you are looking for.

But you have to ask yourself if it’s worth the risk if someone finds out?

I guess you will have to ask Credit Suisse, Greg Lindberg and ENRC.

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1 reply
  1. EJM Investigations
    EJM Investigations says:

    Great subject Brian.
    It really is a case of vetting clients to check that their ethics, beliefs and way of doing business is complimentary to your own. If not you must then question whether those differences could cause issues when it comes to carrying out the clients instruction. If it will then move on and let that client go. It can be hard when you are new to an industry and want to build a client base, but if you want to build a business, remember that one pay check is short term, but the effect on your reputation is long term.

    Reply

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