Case Examples and Our Duty of Confidentiality
Proximal Consulting never disclose the identity of our clients nor the work that we carry out for them. Thus it is not possible for us to describe in detail individual cases that we have worked on.
However we detail below examples of the types of investigations and research that we regularly conduct.
Case Example: “Hidden” Politically Exposed Persons (PEPs)
Many of the KYC enhanced due diligence reports that we prepare concern politically exposed persons. Often our client is already aware that the subject of our report is a PEP; however on some occasions our client is not aware of this fact.
We have seen numerous examples where the subject of our report has not disclosed that he/she is a PEP. Sometimes the subject has very deliberately provided information which makes no mention of political or government appointments.
For example, a PEP in a South American country described his business activities as being the owner of large cattle ranches. Our research confirmed that this was correct, but was of far lesser relevance and importance than his other business activities, government appointments and widespread allegations of him being involved in corrupt activities that were uncovered as part of our investigations.
Another example is where a subject provided an address and details of business interests in a second country, not referring to his/her business interests and political/government roles in their native country. A common example of this is when the subject gives an address in the UAE and a UAE free zone company. Whilst both the UAE address and company details may be valid, it is only by carrying out detailed research that we are able to confirm the business history, probity and PEP status of the subject is his/her own country.
It is also not uncommon for a corrupt PEP (or former PEP) to provide a passport from a second country as identification, with the intention of obscuring their activities in their country of origin.
Case Example: Front Men / Close Associates of Corrupt Politically Exposed Persons (PEPs)
Since our inception in 1999 Proximal Consulting have frequently carried out research and investigations which confirm that the subject of our report is acting as a “front man” for corrupt politically exposed persons.
Sometimes confirming that an individual is acting as a front man for a corrupt PEP is not an easy exercise. It is particularly difficult where the subject of our report has his/her own business interests and is effectively mingling the proceeds of corruption with legitimately obtained funds.
Case Example: Ultimate Beneficial Owners and Nominees (Front Men)
A key element of any anti-money laundering (AML) regime is establishing the identity and probity of the ultimate beneficial owner (UBO) of accounts and assets.
We carry out numerous KYC enhanced due diligence investigations where we are informed that the subject of our research is the UBO of onshore or offshore corporate entities. These companies then hold bank accounts and other financial relationships.
Whilst there are many enquiries where the subject is actually the UBO, there is a large subset where this is not the case. In other words, an individual is being paid (or his/her details are being used fraudulently) to state that he/she is the UBO of a company or companies. Whereas in fact this person is merely acting as a nominee (front man) for an unidentified third party or parties.
Clearly the “unidentified third party” who is the real UBO can be a criminal, corrupt PEP or even a terrorist.
Additionally, and of key relevance, the companies involved can have high value annual turnovers.
Our proven investigative techniques have, on numerous occasions, confirmed the true facts about individuals who are falsely claiming to be a UBO. Amongst the characters that we have confirmed are front men, not the real UBOs, are security guards, retired housewives, shop assistants, a long-term inmate of a psychiatric hospital and unemployed teenagers.
Equally important is the fact that on many occasions we have been able to confirm the actual identity of the third party (or parties) who are the real UBOs.
Case Example: The Subject Of Our Report Is Not Quite How He/She Is Described!
It is a regular occurrence for us to identify negative information about individuals which may not have been disclosed by the subject of our report to our client; alternatively the information that has been disclosed is incorrect and incomplete.
There are many examples of this; a short selection is as follows:
We confirmed that an individual who described his activities as running an “import/export” business was in reality a convicted and formerly imprisoned money launderer (who was still active in the drugs business).
We confirmed that an individual who claimed to have a fortune in excess of €1 billion was in reality a person who had been declared bankrupt three times in recent years, had no current income and was living in low value rented accommodation.
Numerous subjects who have claimed that companies in which they are owners and/or officers have high value turnovers. However our detailed examination of official company records and other relevant sources have confirmed that the relevant companies have very low value turnovers, are dormant or simply do not exist.
We were provided details of a subject who was described as being active in two companies in the construction sector. Our research confirmed that the subject was in fact a member of an organised crime group and was the front man for the leader of this group. The subject had previously faced eight criminal charges including illegal firearms, fraudulent bankruptcy, extortion, blackmail and drug trafficking. He was also a known money launderer.