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Commercial Investigations: The Role of Private Investigators
Private investigators today handle numerous projects surrounding many issues in society; from matrimonial disputes to problems with commercial activities such as fraud and infringement of intellectual property, private investigators are trained to unravel the truth behind dishonest and criminal cases. Their professional services are most commonly engaged by corporations that are looking to dig deeper into issues or suspicious behaviour that may pose a threat to their business and reputation.
While authorities such as the police may help with such matters, there are limitations to what they can do. Find out more about private investigators, what they do, how they benefit businesses and what commercial investigation is all about.
THE ROLE OF PRIVATE INVESTIGATORS
1.1. Who are Private Investigators?
Private investigators are individuals or businesses who can be hired to conduct investigations. They are, however, frequently stereotyped as people employed to keep cheating spouses under surveillance.
While matrimonial surveillance services are part of the job, investigation services provided by private investigators actually involve more than just gathering evidence of adultery. In fact, it is available for not just regular citizens, but more importantly, for companies looking to seek justice and protection in circumstances where they may not find solutions with authorities or when they prefer a more private service.
Private investigation companies engage in a variety of work largely associated with corporate and commercial law, and many investigators even collaborate closely with lawyers on criminal cases to present evidence that may be helpful in winning lawsuits. Some may even double as professional witnesses who observe situations, gather evidence and present them in court.
Here’s a brief overview of the services provided:
- Commercial Investigation
Commercial or corporate investigation uncovers suspected criminal activity going on within a business, either due to an employee’s misconduct or the fraudulent act of another business. It also involves performing due diligence for investors considering new investment ventures ( also known as investigative due diligence), and other corporate matters such as anti-fraud work, conflict of interest, loss prevention, internal investigation of employee misconduct, intellectual property, and computer forensics work.
- Matrimonial Investigation
An investigation company may also offer matrimonial investigation services to spouses who intend to file a divorce. Divorcing parties can enlist the services of a private investigator to obtain the evidence they need for marital disputes. For example, to prove adultery, unreasonable behaviour, or that the spouse is dissipating assets. Such evidence is crucial if one wants the court to rule in their favour. Parents who are concerned about their children’s sudden behavioural changes or their wellbeing may also consider child surveillance services, where their child’s movements and activities will be tracked and monitored, and reported back.
- Legal Disputes
In order to obtain irrefutable evidence needed to win lawsuits, lawyers may work closely with private investigators to conduct investigations to gather evidence. As private investigators are highly trained, they are able to analyse large amounts of documents to identify crucial information, single out significant witnesses and facts surrounding the case, and review evidence to discover more details.
- Finding Missing Persons
Missing person cases will benefit greatly from the wealth of information, connections, and investigative methods that private investigators have access to. Their exceptional observation skills and the ability to track down potential leads to attain the necessary information can sometimes make finding a person an easy feat.
1.2. The Responsibilities of Private Investigators
Private investigators are expected to perform multi-faceted roles as mentioned above, but their main responsibilities involve the following:
Conducting research to obtain information that is useful for the client is the primary role of private investigators. When carrying out research, they are to abide by the laws that govern Singapore, and only collect the information and evidence they need via legal methods.
2. Conduct Interviews
Apart from research, private investigators also conduct interviews with relevant persons to acquire credible information, pick out more details regarding the case, and/or identify discrepancies in the case. The responses given help the investigator gain more insight into the case and may lead to a faster resolution.
Surveillance is a common activity in cases related to criminal offences or infidelity. However, it can be used for any case. It simply means observing a person or a group of people in an investigation, tracking their movement and activities physically or electronically to find something or gather information.
4. Reinforce Law Enforcement Activities
In some cases, private investigators may be expected to assume the role of a police officer, where they assist the authorities in investigating cases of criminal nature and collaborate with them in pursuing suspects and/or culprits. They will monitor and alert the relevant parties of the suspect’s location and present evidence that leads to their prosecution.
UNDERSTANDING COMMERCIAL INVESTIGATION
2.1. What is Commercial Investigation
Commercial investigation is just one part of a private investigator’s job scope. It covers a range of issues relating to business, corporate law, and commercial law.
Corporate law governs the rights, relations, and conduct of persons and businesses, while commercial law regulates the conduct of persons, merchants, and businesses who are engaged in commercial activities such as merchandising, trade, and sales.
From cases related to internal corporate matters to external fraudulent activity, organisations can enlist the services of a private investigation company for their business’s best interests. The following are some examples of the type of cases companies can engage investigation services for:
- Conflict of Interest
Employees are bound by the company’s code of conduct to act in the best interest of their employer and not for personal gain. However, when employees engage in activities or behave in a manner that negatively affects the business, a conflict of interest arises. This can warrant termination, or in some serious cases, lead to a court case. Examples of conflict of interest include, but are not limited to the following:
– Directly or indirectly starting and/or engaging in a competing business
– Syphoning of business
– Sharing or selling confidential information to a rival entity
– Accepting fees and providing advice to a rival entity for personal gain
– Working part-time at a rival entity while under full-time employment
– Poaching of employees
– Failing to disclose relations to a job candidate the company is considering to hire
– Hiring an unqualified person to provide services for the company, for personal gain
– Having improper relations with a superior or subordinate for personal gain
– Business contract bid-rigging
– Provide favours to relatives and friends in hiring, promotion, procurement and subcontracting process, etc.
Commercial fraud describes deceptive practices or legal violations committed by employees or other stakeholders for financial gain. Fabricating statements about corporate performance to boost sales or inflate stock value, failing to disclose certain income on business tax returns, and the misuse of corporate goods for personal gain are just some examples of commercial fraud. Besides being detrimental to the business, it is also bad for the economy as it sends a signal showing that large corporations are unchecked and cannot be trusted. This discourages investments and even stymies economic growth. Fraud investigators work to expose any criminal activity and to help businesses steer clear of crime.
- Breach of Employment Contract
Employment contracts are legally binding agreements between employers and employees. Parties involved are expected to perform their duties as outlined in the contract terms. A breach of contract happens when either of the parties breaks one of the terms. For example, when the employer deducts an employee’s salary without reason, or when an employee does not work the agreed hours.
- Bribery & Corruption
Corruption refers to the unethical or fraudulent behaviour of persons in power. It usually occurs hand-in-hand with bribery, which is the offering, giving, or receiving of valuable materials with the intention of influencing a person to act in a certain way or to reward a person for having done something. Even in cases where no bribe is ultimately offered or paid, corruption and bribery would still have occurred if a person authorised or provided direction for a bribe.
Theft refers to the dishonest movement of property out of another person’s possession with the intention of causing wrongful gain or loss, without prior consent from that person. Employee theft such as embezzlement, theft of information, and theft of intellectual property are some examples.
Misconduct is defined as behaviour that fails to meet the terms of a contract. Examples include workplace theft, dishonesty, insubordination, and immoral behaviour. Private investigators may be employed to look into complaints and carry out investigations to find out whether an employee has indeed behaved inappropriately in the workplace.
- Intellectual Property
Intangible creations used in commerce, such as inventions, literary and artistic works, designs, symbols, names, and images are examples of intellectual property. It is legally protected by patents, copyrights, and trademarks, which allow people to gain recognition or financial benefit from their work. It also prevents unauthorised individuals or organisations from stealing and exploiting them.
- Cybersecurity Breach
Cybersecurity is extremely important because cybersecurity breaches are among the most major threats that businesses face today. It refers to any incident that results in unauthorised access to computer data, applications, networks, or devices. Confidential information belonging to the company and/or stakeholders and customers may be exposed, resulting in a variety of problems and a tarnished business reputation.
Commercial investigation also includes digital investigative work. Database forensics, email forensics, malware forensics, and mobile forensics are examples of digital investigation services, where forensic investigators help to preserve, identify, extract, and document digital evidence for use.
2.2. Commercial Investigation Methods
Private investigators will use the following investigation methods to assist businesses in uncovering criminal activity, amassing more information, or gathering evidence.
1. Fact-Finding Interviews
Interviews are one of the most important research methods for acquiring new details or refining information from other sources. Private investigators conduct interviews with relevant people to determine what they know and compare it to what the investigators know. The investigator can build a more detailed and complete picture of the case by actively listening and carefully observing.
2. Computer Forensics and Digital Investigations
Computer forensics is the use of investigative techniques to identify and store evidence from a computer device. Private investigation companies skilled in digital forensics will be able to collect and analyse data, including deleted data, from computer systems, networks, wireless communications, and storage devices in a way that can be used as evidence.
3. Physical and Electronic Surveillance
Physical surveillance is typically carried out to monitor the activity of an individual or a group of people; it is the direct observation of people, vehicles, or activity taking place at a specific location in order to obtain information. It is also one of the most important resources available to private investigators for detecting criminal activity and compiling evidence against suspect offenders.
Electronic surveillance, on the other hand, is the monitoring of a home, business, individual, or group of people using various devices such as CCTV cameras, legal wiretapping, cameras, digital video equipment, and other electronic, digital, and/or audio-visual means.
Other methods of investigation include clandestine investigations, overt/covert enquiries, as well as research and market survey.
WHY HIRE A PRIVATE INVESTIGATOR?
3.1. Benefits of Hiring Private Investigators for Corporate Matters
Private investigators can help companies with potential bribery or corruption cases, breaches of fiduciary duty or employment contracts, cybersecurity breaches, workplace misconduct, financial or accounting fraud, whistleblower complaints, suspected syphoning of business, and more. Hiring a private investigation company for corporate matters has numerous advantages. Find out why.
1. Confidentiality and Transparency
Private investigators work in confidence for businesses and will keep all information and cases strictly confidential. Cases will also be kept under wraps so that they are not made public, protecting the company’s reputation. They are also transparent about all of their investigations and will notify the point-of-contact of any important details or changes that they should be aware of.
2. Professional and Experienced Investigators
Investigative work is extremely difficult to carry out, but private investigators are highly skilled and trained individuals capable of performing a wide range of investigations. Any minor blunder can derail the project, but businesses can rely on the expertise and experience of private investigators to efficiently conduct the investigation and uncover the facts they require while focusing on running their business.
3. Judicial Criteria
Businesses that intend to present evidence obtained in court must ensure that their evidence is collected legally. While there are numerous methods for gathering evidence, some of them are illegal. And although illegally obtained evidence can sometimes be admissible (as long as it is relevant to the case), it can get plaintiffs in trouble. This is because using illegal methods to put together evidence is akin to breaking the law. In this case, private investigators can ensure legally-collected information by simply abiding by the law when conducting investigations.
4. Customised Strategies and Solutions
Private investigators offer a flexible investigative approach to companies, where cases can be handled according to the business’s needs without causing disruption to them. For example, by working with authorities, most cases may go to court and result in lengthy court battles. However, businesses can choose to settle cases privately and receive compensation directly from the culprits instead.
5. Identify Lapses and Improve Work Process
With the information gathered by the private investigator, businesses can identify the entire activity timeline of the suspected criminal activity. This gives them a clear view of how an incident happened, why it happened, and what allowed it to happen. With this set of information, businesses can quickly identify lapses in their processes and work to improve them.
3.2. Successful Case Studies
Below are some of the projects undertaken by CDiC Consultants.
1. Theft & Misconduct
A fashion luxury brand owner noticed that their genuine merchandise was being sold online at undercut prices. CDiC was engaged to conduct an investigation into the activity. Our investigations revealed an internal pilfering by an employee. The employee conspired with an outsider to sell the stolen luxury goods online at a price 20% to 40% lower than the original selling price. We gathered all the evidence and assisted the brand owner with an internal inquiry before referring the employee to the police. The culprits were arrested and charged in court for theft as a servant.
2. Commercial Fraud
A technology MNC suspected an individual of exchanging a few thousand units of faulty electronic devices under the warranty period, within a few months. CDiC was instructed to carry out the investigation, which lasted three months. Upon investigation, it was revealed that there was a case of warranty fraud ongoing. It unveiled a local syndicate of more than 15 people and their respective roles, as well as their upstream syndicate based in Hong Kong.
An international brand owner discovered that an unknown person was selling a wide range of products bearing their trademark on a popular e-commerce website, priced far below their retail price. The products were purchased as samples and found to be counterfeits upon authentication. A series of investigations were carried out and the results unearthed the modus operandi, including the business entity, perpetrators, distribution network, warehouses, offices, vehicles, and more.
The brand owner’s legal representative applied for several search warrants, which were later executed by the authorities. Aside from counterfeit products, many other items such as computers and invoices were seized. We conducted computer forensics and digital investigations on the seized computers and further revealed the upstream supplier, who was based overseas, and downstream people, including distributors, retailers, and customers.
4. Misconduct & Conflict of Interest
An MNC company suspected one of its Managing Directors (“subject”) of unethical practices and activity that was not in the best interests of the company. The subject was based in Shanghai, China, and the management wanted to know his activities as well as the people he met during the period of time where he would be travelling to Hong Kong and a few cities in China. CDiC placed the subject under surveillance for a period of 10 days, travelling via flights and cars. The surveillance operations began in Hong Kong and continued to Shenzhen, Shanghai, Ningbo, and ended back in Shanghai. We captured the subject’s activities and photographs of more than 50 people he met during the entire period. The subject was later terminated.
5. Breach of Confidence and Fiduciary Duties
A leading logistics provider raised concerns over a possible breach of confidence and fiduciary duties by their employees. They engaged CDiC to preserve digital footprints and conduct examinations of destroyed company data. Our analysis revealed deletion occurrences, and digital recovery work was performed where relevant electronically stored information, such as instant messaging chats, was recovered. The activity timeline was successfully established and our client’s conjecture was confirmed. Our gathered intelligence and analysis helped in gathering admissible evidence to serve indictment to the subject(s).
6. Conflict of Interest & Breach of Contract
CDiC Digital Investigators were engaged by a leading corporate service provider to look into potential conflicts of interest and the leakage of confidential information by one of their acquired subsidiaries. Surveillance and device monitoring tools were deployed and evidentiary information was found, showing that there was fraudulent activity, where acquisition prices were marked up. Additionally, we uncovered a breach of professional work ethics, such as poaching of employees, unauthorised deletion of confidential data, and theft of proprietary information belonging to the client. Further investigations, such as exit interviews, were conducted. Share buybacks were carried out effectively, and the client regained business ownership, acquired at a satisfactory purchase price.
CDiC also assisted several corporate entities and their legal representatives in investigating and obtaining evidence in a variety of other cases, including business syphoning/diverting, disclosure of trade secrets and confidential information, violation of company policy, and breach of employment contracts.
Hiring a private investigation company for your business can protect it and prevent losses in many aspects. Whether you suspect an ongoing illegal activity or you simply want to be safe, the team at CDiC Consultants is here to assist you. CDiC Consultants is a leading and trusted private investigation company in Singapore licensed by the Police Licensing & Regulatory Department (PLRD) of the Singapore Police Force. Contact us today to speak to an investigator.