De Vere Wealth Report Case Studies

Date: 05/01/2012

Review By Sarah Owen A review of three case studies from reports undertaken in the past quarter. The names have been changed to protect the guilty!

Case Study 1 – Due Diligence – Identity Issues, Undisclosed Debts and a Factoring Fraud

Instructions were received to provide a Gold Wealth Report on Derek Hollingsworth of Telecomms Tiger Ltd. The client stated with the instruction that the company is a new-start with contracts in place with a number of leading telecoms service providers. Mr Holligsworth was believed not to hold any other Directorships (current or previous).

It quickly became apparent that the true circumstances were not as the client envisaged. Mr Hollingsworth had previously been a director of a number of printing companies dissolved following liquidation or administration. The entries linking Mr Hollingsworth with the insolvent companies at Companies House had been ‘hidden’ by the use of slight variations in the spelling of the subject’s name and date of birth. Additionally he had twice been declared bankrupt (in 2001 and 2007) although as he had been discharged from both bankruptcies he is no longer recorded at the Insolvency Service.

Given Mr Hollingsworth’s undisclosed personal history it was advised that the client ensure that all invoices submitted were carefully checked. As a result of a thorough investigation by the client into the invoices supplied by Mr Hollingsworth it was discovered that all but one were fake. In light of the additional information and after De Vere & Co liaised with City of London Police the client decided to refer the matter to its local Police Force.

Result: The client did not lend £350,000 as originally proposed.

Case Study 2 – Increased DSO Alert Triggers Wealth Report and Foils Fraud

DeVere were asked to provide a Gold Wealth Report on a Sandra Jones of Ty Treats Ltd at the mid-life stage in the funding cycle. The request for the report was triggered by Ty Treats Ltd’s DSO increasing from 56 to 88 over a relatively short period when internally review by the funder, leading to concerns that “something was not right.”

The research undertaken located a company called Go Go Homes Ltd of which Mrs Jones was a shareholder (though not an Officeholder) and her husband was a Director and shareholder. It was found that Go Go Homes Ltd was experiencing severe financial difficulties and was subject to an unadvertised winding up petition of which HMRC was the petitioner.

Based on the information located during the research undertaken to complete the Gold Wealth Report it appeared likely that Mr and Mrs Jones were diverting money destined for Ty Treats Ltd in an attempt to save their other company, Go Go Homes Ltd. Subsequent investigation undertaken by De Vere in conjunction with the funder confirmed these suspicions.

Result: The funder was able to prove that monies intended for their client, Ty Treats Ltd was being diverted to Go Go Homes Ltd and seek legal recourse.

Case Study 3 – Recovery Case : Finding Hidden Assets in UK and Europe

A Gold Wealth Report was provided on Stuart Hughes of Nique Enterprises Ltd, a company which had recently gone into liquidation with significant losses, the most substantial creditor being our client. The searches undertaken did not locate any property owned by Mr Hughes however three addresses linked to him were found to be owned by a non-UK incorporated company, Adra Investments Ltd. The ‘further work suggestions’ of the Gold Wealth Report included locating Adra Investments Ltd and determining whether Mr Hughes had an interest in the company. The client decided to go ahead with this further work.

Research undertaken revealed Adra Investments Ltd to be a Gibraltar incorporated company of which Mr Hughes and his wife were the owners. Further investigation into the company suggested that it may own or have owned property in Europe and a number of ‘wildcard’ searches were undertaken which led to the discovery of a property portfolio in Spain and Portugal. While the majority of properties which had been owned by the company were sold during the past few years and a number of others were subject to various mortgages and charges an unencumbered villa was located in the Algarve valued at £550,000.

Result: The client was able to make a recovery

About Sarah Owen Sarah joined the De Vere business in 2005 following time as a Researcher in Local Government. Sarah was appointed as Research & Analyst Manager in 2010 and leads our team of 6 researchers as well as managing our more complex business intelligence and fraud investigation cases.