Internal Fraud & Embezzlement Investigations
Fraud and Embezzlement are a significant threat to Businesses and Individuals:
We will identify the source of loss
There are many reasons for employing an external investigator to complete a comprehensive internal fraud investigation. LapidIM’s investigators are expert in interviewing employees, setting up surveillance systems and analyzing IT network evidence to provide proof of employee theft and embezzlement.
When necessary, polygraph tests are employed to examine employee’s testimonies. LapidIM can also assist employers by providing expert evidence in courts and by suggesting appropriate safeguards to prevent future internal fraud losses, (e.g. pre-employment background checks on key employees).
Examples of Internal Fraud and Embezzlement Investigations by LapidIM:
• The Board of a London bank found that 10% of its capital was at high risk of default because of bad loans. Senior bank executives told them that this was due to poor adherence to loaning regulations and poor management, but they were suspicious and engaged LapidIM's investigative services. Jacob Lapid began by reconstructing and graphing the actions of bank employees.
LapidIM’s investigators developed key intelligence sources by interviewing current/former employees, clients, and loan customers. LapidIM’s investigation was extended to other European countries, where loans had been granted.
Jacob Lapid found that the bank executives had received significant bribes from business customers who were not loan-worthy.
These executives built up sophisticated legal and financial mechanisms to hide their unlawful profits using offshore companies and Swiss bank accounts. Some of the bank executives and loan customers were tried in court using evidence presented by LapidIM, and served time in prison.
Almost all of the loss (80 million pounds) was recovered either directly from the bank executives and loan customers or through the bank's embezzlement insurance.
• An international heavy equipment company asked LapidIM to investigate complaints about used parts being installed in its equipment, when new part replacements had been reported by the mechanics. LapidIM assigned a team led by a Russian-Israeli investigator.
LapidIM’s investigation exposed a ring of criminals, retail outlets, garages and employees who conspired to covertly install used parts rather than new parts in vehicles undergoing routine service checks. The criminal employees ordered new parts from the factory. They billed for the new parts, but installed used parts instead, selling the new parts on the Black Market. LapidIM’s investigators found that the criminal operation caused more than 100 million dollars' worth of damage to the company.
•A British company purchased specialized software developed for them by a Ukrainian software house. They were concerned about the security of their operations that relied heavily on this software for their operations, and they felt that the Ukrainian developers might sell the British finance group’s software to their competitors. LapidIM were able to prove that the technical staff of the Ukrainian company was ready to sell the UK Company’s software to other interested parties, including the UK Company’s competitors.
•A French distributing company invested a substantial amount in establishing a branch operation in Israel. However, they were they were not happy with the operation and profits generated by their branch office in Israel. LapidIM was contracted to confidentially investigate the situation. LapidIM’s investigative staff discovered that the CEO of the operation had set up a leasing company under a relative’s name. This CEO awarded the contracts to his own leasing company, pocketing the profits.
•A European manufacturing corporation contacted LapidIM to investigate embezzlement by their Financial Director who admitted that he invested money, stolen from the company with legitimate brokerages all around the world. He agreed to cooperate with the investigation. The brokerage companies could not be found.
LapidIM discovered leads to a group of organized criminals who operated a "boiler room” in Toronto. LapidIM collaborated with Federal Police succeeded in penetrating the group and obtained evidence covertly. LapidIM was able to locate most of stolen funds hidden in accounts registered in Off-Shore heavens.