Case Study: Surveillance

Mobile field surveillance consistently identifies theft, fraud, insurance fraud and domestic infidelities. Here are two of my favorites:

Surveillance Case Study 1:

A 64-year old female claimed she was paralyzed on her left side during a medical procedure and sued for $2.5 million. Continued surveillance revealed she rarely left her home and when she did, she shuffled along very slowly, with assistance, using a walking frame as she did so. One Saturday morning she joined her family in a visit to the local supermarket. Her daughter and granddaughter assisted her as she slowly edged her way from the car to the store. An Artus Group investigator entered the store to observe her activities. Nothing new – she continued along slowly as her daughter provided support. The daughter left her alone and went to another aisle, leaving the subject alone in the freezer aisle.

The subject then made an amazing recovery and Artus Group investigators obtained video as she opened a freezer door with her left hand, held the door open with her left leg, and leaned into the freezer with her left hand. She lifted and examined several items inside the freezer with her left hand and finally selected an item for her shopping cart.

This amazing recovery was seemingly short-lived: as she exited the store her paralysis returned and she was videotaped as she slowly shuffled back to the car with the assistance of her walking frame and doting family. The subsequent settlement negotiation had a slightly different outcome than she might have expected.

Surveillance Case Study 2:

A very wealthy client with a pre-nuptial agreement suspected her younger husband was having an affair with a woman from Philadelphia. Her husband, a former athlete, told his wife he was leaving for an amateur men’s basketball tournament in Denver. Of interest, we learned that his connecting flight was through Philly, with only a 45 minute layover. We suspected that the subject would either meet his girlfriend at the gate for the second leg, or he would exit Philadelphia airport and claim that he had missed the connection and would have to stay overnight. Or, maybe he was telling the truth and there was no girlfriend at all? This, as do all airport surveillances due to logistics, size and sheer volume of people, provided a very difficult scenario.

Artus Group booked one investigator on the flight to Philly; one at the gate in Philly to meet the subject; one at the Philly baggage claim; and one outside circling the arrivals level in his car. Two additional investigators were scheduled to pick up the subject as he arrived in Denver – again, one at baggage reclaim and one circling in his car (as you know, it is impossible now to remain parked in place immediately outside arrivals at any major airport). In a bizarre twist, our subject almost missed his flight to Philly, but as he rushed to the gate, the Artus Group investigator boarded just behind him (our investigator booked a seat near the front so he could be sure of exiting the plane before our subject – this is a critical component of aircraft surveillance).

As they landed in Philadelphia, the Artus Group investigator fell immediately behind the subject and then gave our Philly investigator “the nod” at the gate to provide the subject’s identity. The exterior investigators were alerted, but ultimately were not required. Our Philly investigator followed the subject to the gate for his pre-booked flight to Denver. There, the subject looked around expectantly, but as if from a scene in “Wuthering Heights”, his girlfriend arrived in full flight and they embraced and kissed at the gate. All was caught on video.

Our Philly investigator followed the subject and his companion onto the flight to Denver and sat in his pre-booked seat, again towards the front. Upon arrival at the gate, he repeated the “nod” to our Denver associates, who took it from there. The subject and his girlfriend were observed and videotaped as they rented a car and drove to a hotel, where they checked in, all caught on video. An undercover agent in the hotel lobby even videotaped as the subject made a phone call to his wife in Connecticut. He could be heard telling her that he had checked in and was just about to leave with the guys for practice.

This surveillance included seven investigators, immense planning and, to be honest, some luck. But the results became a huge component in providing our client with peace of mind, and some significant leverage in their pre-nup settlement.

Case Study: Due Diligence

Artus Group was assigned a due diligence investigation on a young U.S. software company, which was in its final stages of a $50 million private equity investment deal with commissions and bonuses presumably already calculated. The client expected a “rubber-stamp” due diligence investigation, however, certain adverse information gradually came to light.

The client was pushing for a final report as the date of the investment deal approached, but Artus Group investigators had an intuitive feeling, even though the public record and media was not necessarily adverse. The problem stemmed from the subject’s very common name – similar to ‘Robert Jones’, for example – and disseminating the thousands of possible public records was an enormous task. Of greater concern, however, was that Artus Group believed the subject’s father, of the same name, was an Australian metals mogul who had been convicted for bribing an Australian senator with prostitutes and money. Linking the father to the son (and if so, determining its possible relevance) was a daunting task, with a fast-approaching deadline.

Artus Group reviewed thousands of documents in an attempt to establish a link between the father and son. Finally, investigators identified a 1998 filing submitted to the Securities and Exchange Commission (SEC), which listed an address for the father, that the son was known to have used between 1997 and 2001. Further inquiries revealed the father was a major private angel investor in his son’s US company, and the connection quickly caused the deal to unravel.

What became of this client? They must have been delighted, of course. This was not the case. The deal fell through, commissions and bonuses were lost, and both lead analysts were fired for their roles in letting the deal get so far and failing to adequately conduct their own due diligence.

Remember: An Artus Group due diligence is not a ‘rubber stamp’. Be prepared for all possible outcomes.

Case Study: Background Check

A pre-employment background investigation could have saved a client hundreds of thousands of dollars. The client hired a Vice President of Operations solely based on references. Twelve months after the employee was hired, he was offered an equity position in the company, which he accepted through a signed agreement. Later that month he was involved in an accident at a work site on company time, which went unobserved. He was granted a workers’ compensation leave, where he remained for over a year. He was receiving a six figure income and still had an equity stake in the company. The client became embroiled in costly litigation regarding this matter and spent tens of thousands of dollars in legal fees as a result.

The client requested a background investigation for the purposes of conducting the litigation. The background investigation of the employee revealed a Federal criminal record for attempted fraud, a previous workers’ compensation claim, one Federal bankruptcy and eighteen civil lawsuits related to non-payment of debt and contract disputes, three of which were related to former employers. The client remains in litigation which has cost the company significant resources, time and money. This would have been avoided if the client had conducted a pre-employment background investigation prior to hiring the individual.

Case Study: Computer Forensics

An attorney client represented a female who was convinced that her ex-husband knew way too much about her private life and schedule, even after a year of being divorced. Electronic debugging identified no eavesdropping devices at the female’s house. Further analysis of her laptop, however, revealed her husband had secretly placed a logging software onto her laptop before he left, which had sent ‘printscreen’ snap-shots of the client’s computer screen to a Gmail account every two minutes for over a year. The husband then simply accessed the email account to view every email, every website visited, every chat thread and every Skype window the client had viewed for over a year. As a result of the investigation, the client was able to change computers, upgrade her computer and personal security, and get on with her life, in what remains one of the worst invasions of privacy Artus Group has seen.

Case Study: IP Investigations

A client learned that pirated software was being sold in the US though a company in Rhode Island which was registered as a Delaware corporation. The client requested an investigation be conducted to identify the source. The only evidence provided to Artus Group was an old invoice for a software purchase, which revealed a Rhode Island fax number at the top of the document. The investigation revealed the fax number was in fact forwarded to an electronic hub line in Las Vegas, which then automatically transmitted the fax in the form of an email to an email account. Artus Group discovered the billing address for the fax line was associated with a company in London, which was determined to be the registered agent on record with the Delaware Secretary of State for the Rhode Island company.

Undercover contact through the email address revealed the source was a company in Croatia, which was also the parent company of the London business which paid the Las Vegas fax line invoice. The investigation revealed the identity of the manufacturer and the client proceeded with international litigation to cease and desist operation and distribution of the counterfeit software.