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Case Studies Corporate Counsel

Embezzlement Found and Civil Judgment in Excess of $22 Million Awarded

A Houston oilfield services company purchased an Alaskan construction firm and retained its founder as manager to oversee its operations. Several years later an audit suggested overspending in the subsidiary construction firm’s aviation operations, which involved lease payments to a jet charter company owned by the founder, ostensibly for the transport of workers. The general counsel of the Houston parent company hired us to investigate. Our efforts revealed that the aircraft and crews were often used for trips unrelated to business. Furthermore, the founder was found to have manipulated aircraft registration numbers to buy a used jet, refurbish it at the expense of the subsidiary, and then sell it at a personal profit – while making it appear that the work was being done on a different plane covered under the lease.

Result: The ensuing lawsuit resulted in a civil judgment in excess of $22 million.

Kickback Schemes Foiled…Property Recovered

The general counsel of the refinery cleaning subsidiary of a multinational waste management firm employed us to investigate rumors of kickbacks and improper gifts being paid to customers of a facility in Port Arthur, Texas. Following extensive research, surveillance, and interrogations, it was determined that the former facilities manager was complicit in a systematic pattern of providing inducements to individuals who were responsible for awarding projects to the company. In internal records the manager was misidentifying a fishing boat, trailers, and ATVs purchased for the purpose of conveying title to the recipients. The manager was also found to be purchasing building materials to build a beach home.

Result: The client opted not to prosecute, but the manager was fired and agreed to forego his retirement account. Additionally, the titles of several ATVs and trailers and one boat were conveyed back to the company by those who had received them.

Machine Gun Toters Prove To Be a Mirage…Inadequate Security Corrected

The general counsel of an oil exploration and production company retained us to investigate the facts and circumstances surrounding a reported sighting of a group of machine gun clad trespassers by workers on an oil rig the company was operating on a lease along the Texas-Mexico border north of McAllen, Texas. Following an extensive slate of interviews by the investigators and a comprehensive security survey, the key witness was determined to be unreliable and the sighting deemed to be highly unlikely. Other witnesses were found to have in turn been influenced by the key witness. Nonetheless, it was revealed that there had been numerous incursions by human trafficking groups and the company’s security measures were found to be inadequate for the location and circumstances. Our security consultant assisted the company in shoring up vulnerabilities in physical security at the site; interfaced with the Webb County Sheriff’s Department, Texas Rangers, and U.S. Customs and Border Protection; and oversaw the selection of a team of off-duty officers to serve as armed security. We further enlisted the company into the notification network of the Laredo Joint Operations and Intelligence Center (LJOIC), a task force combining local law enforcement agencies at the county, state, and federal levels that receives and disseminates to subscribers any reports of security threats in the area. The LJOIC also maintains on-call Special Response Teams to provide emergency assistance.

Results: Reports of the alarming sightings were debunked and, since the culmination of the project, there have been no further incursions. The company has gone on to expand its presence in the lucrative fields of South Texas, utilizing the same security model developed in the course of the project.