Compliance programs and risk management, issues covered in this month's Metropolitan Corporate Counsel, often include due diligence investigations.
Kevin Sullivan, a retired investigator from the New York State Police, shared advice on due diligence in a recent continuing legal education (CLE) event at the Eagan, Minn. Headquarters of West, part of Thomson Reuters. Sullivan has 21 years of experience, including investigations into financial crimes and money laundering. His expertise encompasses suspicious activity review and enhanced due diligence methods.
Craig Miller: How do you begin the fact-finding aspect of due diligence?
Kevin Sullivan : I start with determining who's involved in the case and what resources I will need. Is it going to be a big investigation or not? Does it involve an internal investigation? Nothing ruins an organization faster than the enemy within.
The type and quality of the information and the sources you use are very important. It comes in handy to have electronic resources and databases like Westlaw PeopleMap that can show links between people and whom they know and whom they've done business with in the past. The amount of information available is actually stunning. These tools generate a very useful report with graphs that shows the connections between different parties.
What's also important is the training of your personnel and their commitment to finding the truth. An effective investigator constantly has to keep turning over stones. The investigator has to keep digging and asking questions. The investigator must be suspicious, but judge slowly.
In the end, it's my job to report on the information I uncover up the chain of command. Someone else, company management or law enforcement, decides how they want to handle the person or situation.
Craig Miller: Why is documenting everything in due diligence so important?
Kevin Sullivan :Comprehensive documentation is critical. My background in law enforcement taught me this. You never know when an investigation that you are working on is going to take off and become something serious. When it does, the last thing you want to happen is be sitting in a courtroom or in front of an executive team getting quizzed about your investigation and not having the notes and materials that support your findings. Quality documentation is very important.
Craig Miller: How do you determine when to get outside help in a due diligence investigation?
Kevin Sullivan :If your case is starting to look really serious, it may be time to call on a colleague with more experience and skill because you've got to know your limitations. As a rule, though, I am not a fan of outsourcing due diligence. I believe that the further the work is from home base, the more room there is for bad things to happen with the investigation and for your company. If you are going to outsource your due diligence, make sure you know the provider and the quality of work they do.
Kevin Sullivan is both a certified anti-money laundering specialist and certified anti-money laundering professional. Sullivan is the current co-chair of the ACAMS NY Chapter.He is also the director ofwww.AMLtrainer.com.
Craig Miller is vice president of the Corporate Sales & Marketing division for West, part of Thomson Reuters.
Westlaw resources for due diligence include:
Westlaw PeopleMap, a dynamic new first-of-its-kind investigative tool that lets you quickly and easily determine relevant information about people and their connections. With PeopleMap, you can:
• Quickly get a comprehensive report on an individual, including information on assets and potentially adverse filings like bankruptcies, criminal records and Watchlist;
• Determine if a person has been involved in litigation or charged with a crime;
• Learn more about a witness or other person connected to a matter and determine relationships among parties;
• Perform due diligence tasks with speed and ease- find out everything about your potential business partner,examine target companies for acquisition, research the background of executives and their connections;
• Visualize connections between people at a glance with a new, graphical interface that shows between people and records, revealing adverse filings and other important records.
Due Diligence in Business Transactions
Intellectual Property Due Diligence in Corporate Transactions
Pratt's Anti-Money Laundering Update
Sheshunoff: BSA/Anti-Money Laundering: Internal Audit and Risk Management
AlexInformation: Guide to Implementing Effective Anti-Money Laundering Procedures