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What is Investigative Due Diligence…
and why would a prudent client
need it?
Investigative Due Diligence is separate and distinct from legal
and financial due diligence, yet equally vital in this tumultuous
international political climate and these current economic times.
Critical information about
potential business partners
Investigative Due Diligence is an
analysis of the background and
often hidden information of third
parties that allows the concerned
and prudent individual or compa-
ny to responsibly and confidently
partner with that third party.
The public face of any company,
as well as its directors and officers,
rarely gives the full story. It is essential for attorneys to investigate
potential business partners and
investments. In light of stringent
regulations of international business, as well as notorious investment fraud, the level of investigation
conducted is under intense scrutiny.
Potential ‘insurance’ against
subsequent criticism
Investigative Due Diligence pro-
vides concrete facts for decision-
making and regulatory compliance
issues, and acts as a sort of politi-
cal insurance against subsequent
criticism of transactions.
Critical information is gathered
in several areas, including:
Is it enough to have carried
out a Google search?
By commissioning experts in Investigative Due Diligence, decision
makers are ensuring they are carrying out thorough business practices and precautions.
Investigative Due Diligence conducts in-depth research into areas
concerning entities and their principals.
n;Review of watch lists and compre-
hensive profiles of high risk and
potentially heightened risk indi-
viduals and entities and those
associated with them in more than
230 countries.
n Researching every known watch
list, sanction and embargo list from
around the world.
n;Determining whether the Subject
is affiliated with known terrorists,
members of organized crime, sanc-
tioned entities, known fraudsters,
and other problematic persons.
n;Identification of Politically Exposed
Persons.
n;Criminal, civil, bankruptcy, regula-
tory and licensing litigation history
– National, Federal, State, and
Regional.
n;Other critical research data such as
business affiliations.
n;Country risk factors.
What are the risks of not
conducting Investigative
Due Diligence?
The convergence of the Foreign
Corrupt Practices Act, the Patriot
Act and the UK Bribery Act means
that not conducting Investigative
Due Diligence could result in sig-
nificant fines and even jail time
for anyone involved in the deci-
sion making process.
For example, the Department
of Justice strongly recommends
that companies conduct compre-
hensive due diligence on foreign
business partners “and to take all
necessary precautions to ensure
that they have found a business
relationship with reputable and
qualified partners and represen-
tatives.”
The Patriot Act requires compa-
nies to conduct reasonable due
diligence to ensure that trans-
actions do not facilitate money
laundering or other illegal activity.
For more about compliance with
regulations, please refer to the
Lightstone insert in your Conven-
tion bag.
2141 E. Highland Avenue, Suite 105 | Phoenix, AZ 85016
www.LightstoneSolutions.com
WILLIAM S. PAPAZIAN, JD, CCEP, CEO
Mr. Papazian has extensive experience in domestic and international
investigative due diligence in over 75 countries. His firm is a multidisciplinary consulting firm which provides investigations and other
specialized litigation support services.
Please call or email him directly with your questions.
