Case Studies: Investigative - The Reilly International Group

Corporate Officer Mismanagement
Outcome: Disclosed Executive Theft; Officers Fired; Favorable Client Settlement

A director of a foreign corporation heard a rumor that a subsidiary of his corporation had secretly purchased a failing U.S. vendor, and that the vendor was being surreptitiously operated from within subsidiary’s office by subsidiary employees. The Reilly International Group determined that the president, chief financial officer, and counsel of the subsidiary had diverted the vendor revenues to a bank account maintained by counsel. Parent corporation fired president, CFO and counsel and filed a lawsuit against them resulting in a favorable settlement.

Pharmaceutical Firm Defrauded of $884,000
Outcome: Bookkeeper Arrested; Favorable Client Judgment

The bookkeeper of a pharmaceutical research firm resigned after the firm relocated. A subsequent financial review found numerous paid invoices without supporting documentation. The Reilly International Group was retained and discovered that the bookkeeper had paid questionable invoices in excess of $650,000 to a computer consulting group owned by her boyfriend. TRIG also discovered that the former bookkeeper had used corporate credit cards to pay for more than $150,000 in personal purchases, and paid in excess of $84,000 for personal travel with client checks. Bookkeeper concealed payments as other vendor accounts payable entries. Federal authorities were contacted resulting in the arrest of the bookkeeper. A civil suit was filed against her resulting in a favorable client judgment.

$3 Billion Investment Fraud
Outcome: Disclosed $90 Million Bank Liability; Favorable Investors Settlement

Numerous investors lost millions in a mortgage fund established for the purchase and resale of distressed mortgage portfolios that promised 20% or more in interest fees. The mortgage fund deposited $3 billion of investor monies in banks, paid limited investor profits to create the appearance of legitimacy, and then diverted funds for principal’s personal use. Principal was arrested and admitted to non-existent investor portfolios. Approximately $700 million of stolen monies were deposited into mortgage fund accounts in several New York banks. The Reilly Internationall Group was retained to investigate one of these banks where over $90 million was deposited. We identified a former assistant to the bank vice president who approved account openings. The former assistant indicated that the mortgage fund principal was a friend of the bank vice president who earned bonuses based on mortgage fund transaction fees. Former assistant alleged bank vice president made account misrepresentations to mortgage fund investors and their attorneys. Lawsuit settled in favor of investors.

Syndicated Television Talk Show $25 Million Lawsuit
Outcome: Disclosed Plaintiff's Criminal History; Lawsuit Dismissed

A Television studio was sued for negligence by plaintiff teenager appearing on its program themed “out-of-control teens”. Plaintiff alleged in her lawsuit and to police that she had been raped by program’s limo driver. The Reilly International Group discovered plaintiff had previously been arrested for filing a false police report charging rape and that her mother, who accompanied plaintiff while filming the program, had a history of theft, trespass, issuing bad checks, drug trafficking, and armed robbery. The mother was suspected by police of prostituting her daughter and using her to sell drugs. In another criminal matter, plaintiff’s mother filed charges against an individual for sexual relations with her daughter, then solicited $10,000 from defendant’s father to drop charges. TRIG findings were reported to client, the police and the Court. Police investigation was closed and the $25 million lawsuit was dismissed.

Distributor Warehouse $1 Million Theft
Outcome: Identified Employee Theft; Insurance Claim Paid

When a paper distribution firm retained The Reilly International Group to investigate inventory shortages, a $1 million discrepancy was uncovered. Signatures on paper product receiving documents were identified as forgeries. Vendor delivery driver confessed he received money from the suspect, a receiving clerk who worked for the client, who solicited him to allow two individuals to off-load product into their private trucks. Suspect employee failed to return to work and the State Police issued a fugitive arrest warrant. Significant inventory losses ceased and our findings resulted in a paid insurance claim.

Electronics Manufacturer Warehouse Theft
Outcome: Employee Confession and Conviction

An international electronics manufacturer learned that an unauthorized dealer was selling its cameras. The Reilly International Group made purchases from the unauthorized dealer of cameras that had not yet been distributed to retailers. Dealer identified his source who acquired cameras from a client warehouse employee whom he identified. Client employee admitted thefts to TRIG resulting in his arrest and later conviction.

Telecommunications Manufacturer Defrauded of $131,500
Outcome: Perpetrator Identified and Imprisoned; Full Client Restitution

Telecommunications manufacturer received a $131,500 order over its toll-free telephone line. Manufacturer verified references then delivered order. After order remained unpaid, The Reilly Internationa Group was retained and determined that purchaser‘s office was located in a business office center where the purchaser had presented false identification during the office application process. Client toll-free telephone records indicated that the order was placed from the same building where order was delivered. Surveillance of that building identified suspect as a former disgruntled client business associate. Federal authorities were contacted resulting in his conviction, incarceration, and full restitution to our client.

$10 Million Fraudulent Real Estate Conveyance
Outcome: Favorable Client Settlement

Two foreign citizens formed a partnership for their purchase of a New York City parking lot. Several years later, The Reilly International Group was hired by one of the two partners when, after considering selling his partnership, he learned the parking lot had appreciated $10 million and his partner had fraudulently transferred the property to himself. It was discovered subject had received $550,000 for a five-year rental lease agreement on the parking lot. The Reilly International Group gained the confidence of renter who promised to purchase the parking lot from TRIG client after owners’ settlement. This assurance resulted in a favorable client settlement.

Entertainment Firm Defrauded of $230,000
Outcome: Bookkeeper Confession and Repayment Agreement

A foreign entertainment corporation suspected misappropriation by a former bookkeeper. The Reilly International Group review disclosed $230,876 in questionable transactions. Former bookkeeper admitted to TRIG his misappropriation and arranged a repayment plan with client.

Financial Services Firm Defrauded of $121,000
Outcome: Broker Confession and Imprisonment; Full Client Restitution

A national financial services firm engaged The Reilly International Group when it suspected an assistant branch manager of theft. Subject broker identified money market accounts opened by foreign customers that had little activity. He fraudulently wired money from these accounts into dormant foreign customer accounts and then liquidated securities held in those accounts. He next arranged for client service center to issue him new customer ATM cards and PIN numbers for the accounts and withdrew $121,910 through ATM machines.

When personally confronted by TRIG, subject confessed. Findings were presented to federal authorities resulting in subject’s indictment for securities fraud. He was convicted, sentenced to two years imprisonment, and ordered to make full restitution.

Domestic Vineyard Heard Rumors of Trademark Violations
Outcome: Infringing Bottled Wine Inventory Destroyed

Domestic vineyard retained TRIG when it heard that wine bottles were exported to the United States which had been labeled with a name similar to client’s trademarked name and with a resembling client image. TRIG in search of infringing product learned wine bottles had been sold months prior at a price that was 90% below the client’s suggested bottle sale price. The distributor was identified and when presented with a suitable purchase story revealed shipments of suspect bottled wine were recently received and stored in a local warehouse for future distribution. Client’s counsel with this knowledge contacted distributor resulting in the destruction of infringing bottled wine inventory.