In the last two years, Kreller has completed more than 250 reports in Brazil. This includes more than 150 level A reports and over 100 custom or special investigations, such as conflict of interest and corruption investigations, Kreller Level B (in-depth investigation) reports, and smaller-scope investigations.
Our lead investigator in Brazil, who spent 35 years as a Police Chief in São Paulo State, is a former Chief of the Tax Fraud Division, Internal Affairs, and former Director of DENARC (State Narcotics Department). He also taught at the São Paulo State Police Academy for 25 years, has a Master’s in Business Administration, a PhD in Biotechnology, and a law degree. He speaks English, French, Spanish, Italian, and Portuguese.
Legal filing research is the biggest challenge in Brazil. The country is considered very litigious and has an extreme backlog of adjudicating cases. In 2014, there were reported to be 95 million open court cases. That’s one lawsuit for every two people. A tax avoidance judge in São Paulo and his four judges were reported to have a caseload of over 1.6 million cases between them.fi
Simple cases can take 3-5 years to adjudicate. To conduct research, each Brazilian state has its judicial system, which must be accessed individually. Each state has numerous different types and levels of courts, which often have to be searched separately. Also, the courts do not have clear requirements for how individual names are recorded in the court records; therefore, full names or misspellings often occur, making it impossible to locate all related records for an individual. As a result, legal filing research is a time-consuming process. In addition, when court record details are available, they are written legally, which is very difficult to discern.
Access to the Board of Trade (Junta Comercial) differs in each Brazilian state. Some states have online access, but others require in-person requests. Companies update their information with the Junta Comercial (Board of Trade); therefore, the company controls the published information.
In this case study, a chemical company suspected two former employees were engaged in a potential conflict of interest through their relationship with a company vendor. The suspicion was that a recent former employee had been utilizing a vendor tied to another former employee. Kreller stepped in to investigate.
International corporate investigations ensued as Kreller conducted a site visit as a potential vendor company client. During the visit, Kreller met with the recently terminated employee and obtained his business card, which identified him as a vendor director. Corporate registration records provided proof that the other former employee was listed as an Administrator for the vendor. The client immediately terminated the contract with the vendor and conducted an audit of all transactions to date.
Two well-known individuals approached a venture capital client from the energy sector in Brazil. The two were to serve as financiers and brokers for a large cooperative investment firm with our client supplying significant capital. The client asked Kreller to conduct enhanced due diligence related to the proposed relationship.
Kreller discovered that one of the subjects had recently been indicted for fraud and money laundering. The subject and his attorney stated that all charges had been dropped. Since it was still classified as an open case, Kreller’s local investigator confirmed that the court could not disclose information related to the case without the subject or his attorney’s presence. The subject’s attorney escorted our investigator to the local official’s offices, who confirmed that the case had been dismissed and the individual in question had been cleared of all charges.
As a result of our findings, the client was able to move ahead with the venture.
Corruption, scandal, government connectivity, and litigious history are a few challenges when operating in Brazil. Enhanced due diligence can assist in ensuring you are engaging with a potential partner, not a potential liability. The risk factors are high, but the opportunities can be lucrative. Approach with caution and make certain to research all engagements properly. Trust Kreller to be the corporate investigations firm needed to protect your company.
In the last two years, Kreller has completed more than 250 reports in Brazil. This includes more than 150 level A reports and over 100 custom or special investigations, such as conflict of interest and corruption investigations, Kreller Level B (in-depth investigation) reports, and smaller-scope investigations.
Our lead investigator in Brazil, who spent 35 years as a Police Chief in São Paulo State, is a former Chief of the Tax Fraud Division, Internal Affairs, and former Director of DENARC (State Narcotics Department). He also taught at the São Paulo State Police Academy for 25 years, has a Master’s in Business Administration, a PhD in Biotechnology, and a law degree. He speaks English, French, Spanish, Italian, and Portuguese.
Legal filing research is the biggest challenge in Brazil. The country is considered very litigious and has an extreme backlog of adjudicating cases. In 2014, there were reported to be 95 million open court cases. That’s one lawsuit for every two people. A tax avoidance judge in São Paulo and his four judges were reported to have a caseload of over 1.6 million cases between them.fi
Simple cases can take 3-5 years to adjudicate. To conduct research, each Brazilian state has its judicial system, which must be accessed individually. Each state has numerous different types and levels of courts, which often have to be searched separately. Also, the courts do not have clear requirements for how individual names are recorded in the court records; therefore, full names or misspellings often occur, making it impossible to locate all related records for an individual. As a result, legal filing research is a time-consuming process. In addition, when court record details are available, they are written legally, which is very difficult to discern.
Access to the Board of Trade (Junta Comercial) differs in each Brazilian state. Some states have online access, but others require in-person requests. Companies update their information with the Junta Comercial (Board of Trade); therefore, the company controls the published information.
In this case study, a chemical company suspected two former employees were engaged in a potential conflict of interest through their relationship with a company vendor. The suspicion was that a recent former employee had been utilizing a vendor tied to another former employee. Kreller stepped in to investigate.
International corporate investigations ensued as Kreller conducted a site visit as a potential vendor company client. During the visit, Kreller met with the recently terminated employee and obtained his business card, which identified him as a vendor director. Corporate registration records provided proof that the other former employee was listed as an Administrator for the vendor. The client immediately terminated the contract with the vendor and conducted an audit of all transactions to date.
Two well-known individuals approached a venture capital client from the energy sector in Brazil. The two were to serve as financiers and brokers for a large cooperative investment firm with our client supplying significant capital. The client asked Kreller to conduct enhanced due diligence related to the proposed relationship.
Kreller discovered that one of the subjects had recently been indicted for fraud and money laundering. The subject and his attorney stated that all charges had been dropped. Since it was still classified as an open case, Kreller’s local investigator confirmed that the court could not disclose information related to the case without the subject or his attorney’s presence. The subject’s attorney escorted our investigator to the local official’s offices, who confirmed that the case had been dismissed and the individual in question had been cleared of all charges.
As a result of our findings, the client was able to move ahead with the venture.
Corruption, scandal, government connectivity, and litigious history are a few challenges when operating in Brazil. Enhanced due diligence can assist in ensuring you are engaging with a potential partner, not a potential liability. The risk factors are high, but the opportunities can be lucrative. Approach with caution and make certain to research all engagements properly. Trust Kreller to be the corporate investigations firm needed to protect your company.
Kreller was hired to conduct corporate investigations to identify the proposed relationship of two individuals who served as financiers and brokers for a large cooperative investment firm with our client supplying significant capital.
A chemical company suspected two former employees were engaged in a potential conflict of interest through their relationship with a company vendor. With thorough enhanced due diligence, Kreller uncovered evidence suggesting a connection between the two individuals and the vendor.
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Our team is comprised of highly experienced due diligence consultants, investigators and business analysts around the world.
Kreller investigators bring diverse backgrounds and global perspective and experience, and detail-oriented mindset to their work. Our blog series highlighting employee expertise and insight continues with this recent conversation with Senior Analyst of Special Investigations, Zack DeGeorge.
Due diligence is the background research and analysis that informs business decisions like investments, partnerships, mergers, acquisitions, or sales.
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