Fraud in Images: The Value of Human Analysis in Due Diligence Investigations

Fraud in Images: The Value of Human Analysis in Due Diligence Investigations

Despite the breakneck speed of development in artificial intelligence and the increasing availability of large databases of corporate information, the instincts of an experienced human investigator can uncover “red flags” based upon hunches that aren’t available to machine algorithms.  

We recently conducted standard due diligence research for a client on a fuel importer in a Latin American country, including confirmation of the company’s registration, details on any legal filings or criminal history for the company, a review of sanctions lists, and more. Part of the research involved a review of the company’s website. Such a review typically locates information on the history of the company, its business activities, and its clients, but generally doesn’t raise any “red flags”. Company websites are marketing tools and unlikely to purposefully reveal information harmful to the company’s reputation.  

Marketing materials can, however, misrepresent a company’s true business capabilities, and the incentive exists for companies to make it appear as if they own and operate more productive facilities or are in a stronger financial position than they might actually be.  

In this case, misrepresentation existed in background images on the website rather than the text of a press release, brochure, or presentation. The company’s website had what appeared at first glance to be a standard slideshow of images at the top of the site showcasing scenes relevant to their line of work: a tractor trailer with the company’s logo; a tank car; and fuel storage silos — each with the company’s logo on them. These images gave the impression that the company owns the equipment needed to do the job and is an established, prosperous entity.  

Yet, these images just didn’t “look right.” Something subtle in the lighting or the angle of the logo raised our investigator’s suspicions. As presented, the images rotated too fast for a close inspection, but through digging into the site’s publicly available code, we were able to isolate the specific images.

Fraud in Images: The Value of Human Analysis in Due Diligence Investigations

The most telling “photo” was of a fuel storage terminal. Each tank had an image of the company’s logo shown on it, and while it didn’t “feel right”, we need something we could point to that would more definitively illustrate our inkling. We found it on the second tank: clear evidence of the image having been manipulated. In the world of this image, there is a light pole towards the right of the scene that stands vertically in front of the tank, but where the image shows the words “fuel supplier” below the company’s logo, the “r” appears on top of the light pole rather than behind it, as it would if those words were painted on the tank.  

This and the other images give the viewer the impression that the company owns and operates the tanks and vehicles shown, yet the manipulation apparent in one of these images should rightly give one pause in thinking this to be true.

What else should the client question? Has the company truthfully answered the client’s questionnaire? What could be discovered if a visit was made to the company’s location? What information could be unveiled by making discreet inquiries with the company’s neighbors or others in the industry? 

Without a trained skeptical eye, a viewer would likely skip over these images and not give them a second glance. These images should activate a heightened sense of skepticism regarding the company’s self-representation; it is a sort of key that can predicate the direction of an investigation. These feelings and observations are unavailable to algorithmic and AI-centric due diligence reviews and highlight the value of the human investigator.

About The Kreller Group

For nearly 30 years, Kreller has relied on “extensive boots-on-the-ground” research, conducted by investigators who are well-versed in worldwide military, law enforcement, business and government matters to deliver the concise information our clients need to make decisions.

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