The dangerous blind spot in your enhanced due diligence

What is enhanced due diligence?

Due diligence refers to the investigations undertaken by companies to evaluate potential risks associated with an individual or organisation before embarking on business relationships or undertaking significant financial transactions. Enhanced due diligence goes a step further, using additional research methods and resources to gain a deeper understanding of the parties involved. This often includes database searches, legal and financial record checks and media monitoring.

Enhanced due diligence is typically needed when higher-risk entities are identified; ones which pose greater money laundering or terrorist financing risks or are based in notoriously opaque jurisdictions.

However, even enhanced due diligence has its limitations…

The pitfalls of standard approaches

To rely on standard due diligence checks in today’s world is no longer sufficient to fully protect your organisation’s reputation. As InsightX is a company founded by journalists, we have learned that enhanced due diligence represents only a starting point when it comes to mitigating risk.

We can draw upon myriad examples to illustrate this point, yet one which is particularly notable is our investigation of Dozy Mmobuosi and Tingo – a saga which has had a resurgence of interest recently, as well as receiving coverage across multiple publications.

Mmobousi and Tingo were the focus of an InsightX due diligence report conducted for a major EPL club. Our researchers uncovered allegations two years before an FBI investigation resulted in Mmobuosi being charged with billion-dollar fraud.

You can read a breakdown of some of our findings in this post, but suffice to say initial enhanced due diligence searches yielded little concerning information about either Mmobuosi or Tingo. On the surface, both appeared to have clean records with no red flags. However, our journalistic approach compelled us to dig deeper to reach the truth.

The power of investigative intelligence

Leveraging a global network of skilled reporters and writers, we went beyond databases to unearth critical intelligence that standard providers often miss. We deployed “boots on the ground” to conduct manual inquiries and searches in relevant countries. Using multilingual research teams, financial analysts and journalists conducting on-the-ground interviews in Africa, we discovered:

  • A past trial involving conspiracy and fraud charges
  • Allegations that Tingo acted as a front for money laundering by former corrupt officials
  • Evidence suggesting the company’s airline lacked operational planes or licensing
  • Questions around potentially fraudulent use of UK addresses

These concerning findings allowed our client to proceed with extreme caution and make an informed decision with intelligence they would have never obtained through conventional due diligence.

Fast forward to today

Subsequent to our investigation, allegations surfaced against Mmobuosi, accusing him of embezzling funds from investors and accruing “millions of dollars in unlawful gains” through unauthorised share transactions. Additionally, he stands accused of misappropriating a minimum of £16 million from publicly traded companies to finance his extravagant lifestyle.

Although Mmobuosi ultimately failed to buy Sheffield United, it was a close call, and the levels of deception go to show just how far he was willing to convince people he was the right man for the job.

In an interview in March this year, Sheffield United CEO Stephen Bettis, said:

“When you look at people who are purported to do what this person has done, they’re conmen. They’re very good at convincing people of their situation and wealth and financial standing.”

He added: “The information that was given to us, the proof of financial standing, he had companies floating on the US stock exchange and it takes a hell of a lot of work and checks from the US stock exchange to even let him be floating on there, it gives you a level of comfort that this guy is real.

“Ultimately, if conmen are trying to do it, they’re very good at trying to do it and that’s where we got to. The reference to conmen is not towards him, it’s towards the principle of it.”

Protecting your reputation 

Organisations can no longer afford to rely solely on standard databases and checklists. Thorough investigative due diligence, powered by real journalists with a talent for unearthing hard truths, is essential to mitigate risks and protect your brand.

At InsightX, we combine cutting-edge research capabilities with old-school journalistic grit to deliver the comprehensive intelligence elite sporting enterprises need to navigate an increasingly opaque world. When standard due diligence isn’t enough, investigative intelligence becomes indispensable.

 

If you’re concerned that your due diligence provider is exposing your brand to dangerous blind spots, then talk to us to see how we can help you to mitigate risk.c

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