Funny Money

Our client, a lawyer involved in putting together a deal for a major sports and entertainment complex with the National Hockey League (NHL) was not too sure about the project’s financial backer. Aware that he could not afford to build the project without the credibility that league sponsorship would bring, he wanted to ensure that there were no nasty surprises.

The backer claimed to be a Canadian merchant banker living in Florida, with access to the necessary capital through a named bank in the Bahamas. Our inquiries quickly established that the subject had no ties in Florida, not even a driver’s licence. His “bank” was not listed anywhere – even in the phone book, and his “office” appeared to be little more than a residential forwarding address.Further inquiries in his native Canada revealed that far from being an affluent merchant banker, his previous employers were all untraceable, and he was being sought by various agencies in British Columbia for unpaid debts including his utilities and other miscellaneous sums.

The final piece of the puzzle fitted into place, when our inquiries in the Bahamas showed that the bank that was allegedly handling the project financing did not exist. Armed with these details, and a full list of documents that anyone representing a Bahamian bank overseas would require, our client confronted the subject. He was unable to answer the detailed questions put to him, and publicly withdrew from the project shortly afterwards.

Sanctions Busters

Intelysis was retained by the compliance division of a North American stock exchange to conduct international background due-diligence enquiries into a company and a number of the individuals behind it. Together the company and these individual were involved in a major transaction with a publicly listed natural resources company. The purpose of the review was to ascertain the background of the company and the individuals concerned.

The Intelysis investigation encompassed research and enquiries on three continents, and quickly identified a number of anomalies in the company’s background including concerns about the company’s real domicile as well as use of front companies in a well known offshore jurisdiction and addresses in several others to conceal ownership details. Following a detailed research exercise into the officers of the company it was discovered that one of them had been accused of involvement in violating U.N. Sanction agreements, and was of interest to the intelligence agencies of several countries. A number of other indications were also uncovered that related to involvement in the smuggling of arms and fuel supplies, and the supply of military equipment, and also raised issues regarding involvement with unsavoury regimes and dealing in “blood diamonds”.

With this information available to them, the exchange was able to make a more educated decision regarding the transaction, approval of which was delayed pending further enquiries.