Exposing Fake Degrees

Marketplace just aired a great program on the fake degree industry and the extent to which FAKE DEGREES have become so widespread.  Don’t just believe the words on a resume, LinkedIn profile or a nicely framed certificate hanging on the wall.  Always check and know who you are dealing with!

http://www.cbc.ca/marketplace/episodes/2015-2016/fake-degrees-exposing-canadians-with-phoney-credentials

Is Canada a haven for Shell Companies?

Most people do not think of Canada as being a haven for shell companies and corporate tax-abusers however an investigative article recently published by the CBC and the Toronto Star and based on information found in the Panama Papers, finds that Canada is in fact a growing fertile ground for shell companies.
 
Shell companies can be used for many purposes – both legitimate and illegitimate. They can also be used to provide a certain legitimacy to a company that may otherwise have none. From a due diligence perspective, this concerns us.
 
I have recently had several international clients tell me that they do not need to conduct a comprehensive due diligence investigation on a company, simply because it is headquartered in Canada. This is a misconception that can lead to expensive consequences. A due diligence investigation on any company you do business with is always a good idea … no matter where they are located or how good they look on paper.
 

Frauds Aimed At Businesses Can Take Many Forms

As a professional fraud investigator, I can say that I have seen all kinds of frauds throughout my career. Likewise, many people have tried to commit fraud against me, especially while eagerly traveling the world. So I would consider myself to be pretty astute in these matters.  But even the astute can be challenged.

As a business owner and a due diligence specialist, I know that we have to trust the people we are doing business with …. to some extent.

We trust that they are telling us the truth, that they really do want our services and / or products and they are willing to pay for them.

And if we have aptly employed our due diligence procedures, then we have already vetted our potential new client to verify their legitimacy, purpose and perhaps even their credit history. But how do we protect ourselves when by all accounts, it looks like we entering into a legitimate relationship with a new client?

A few years ago, we were approached by a European investigation firm requesting our services in Canada. According to them, they were working on a multi-jurisdictional fraud case and needed an investigator in Canada to assist them.   Prior to commencing work with them, the company was thoroughly vetted and everything check out. Of course what we didn’t know then, was that this company had been set up and licensed as an investigation agency by former law enforcement personnel (or individuals impersonating them) for the sole purpose of committing fraud.

In order to commence this complex investigation, a substantial retainer was requested and received.   The money came and was quickly deposited however within a few days, the investigation had been cancelled. The client then requested a partial refund as per our contract.

Weeks of back and forth discussions initiating the contract was followed by a short two sentence email cancelling it. Red flag # 1.

We agreed to refund the money once the cheque had cleared. For those of you that don’t know, a cheque has not cleared just because funds have been made available in your bank account. It can take anywhere from 2-4 weeks for a cheque to clear through the international banking system.

Shortly after advising the client of this, we were told that the investigation was back on. Only now, the investigation budget had doubled and they wanted to send an investigator to Canada to assist us. Red flags # 2 and # 3.

For the investigator to receive an immigration visa, he needed an engagement contract. Once in Canada, he would pay the full amount of the investigation up front and in cash. Red flags # 4. By now, it was clear what was going on.

Lucky for us, we had established fraud prevention procedures to follow.

But how many companies wait the full clearance period before issuing refunds? Or get caught entering into engagement contacts that are then used to secure immigration visas? Or worse?

Companies are at risk of being defrauded just by being open for business. Even with the best due diligence program in place, fraud can happen. So don’t stop there. Protect your business from unintended harm by developing and implementing a comprehensive set of fraud prevention policies.