UPDATE: A colleague in the know has clarified something for me. Despite what the FT said, there are not two separate lawsuits. Rather, there are two complaints, one from Electri as we've previously described. The second complaint comes from National Electrical Contractors Association, which is the organization behind Electri. So to the best of my understanding - two aggreived parties, two complaints, one lawsuit.

Via the FT:

The allegations have also cast a light on the close-knit world of business advisory. Kroll, a risk consultancy firm, has been accused in two separate investor lawsuits of "gross negligence" and of misleading investors via a "clean report" on Sir Allen's operations in 2007, court documents show. Kroll has denied any liability.

Thanks to our friends at Flaneur de Fraude for the tip. They also uncovered this ironic comment on Stanford from author and Kroll investigator William Brittain-Catlin:

"I'm amazed by the way people were taken in by Sir Allen," says William Brittain-Catlin from Kroll, the risk consultancy, and author of Offshore: The Dark Side of the Global Economy. "There’s so much stuff out there that any one who wanted to do a cursory check would have seen. Various allegations have been flying around for years."

Ahem, yes. Well. That is certainly awkward.

-- MDT

Labels: Kroll, R. Allen Stanford, William Brittain-Catlin

You may recall the recent report in Vanity Fair magazine that highlighted the cozy, long term relationship between white collar fraudster, R. Allen Stanford and Kroll - one that involved Stanford paying the investigative firm millions, reportedly, to run interference with inquisitive regulators.

Kroll is facing its first lawsuit relating to the Sanford relationship, filed in Florida's Southern District Court. The complaint has been brought by Electri International, which lost millions investing in Stanford's Stanford International Bank only after hiring - you guessed it - Kroll to vet the deal.

Kroll reportedly issued SIB a clean bill of health in their review, which they claim was "limited due diligence" costing Electri in the neighborhood of $15,000.

Even more interesting, Electri's contact at Kroll in the matter was Thomas V. Cash, Kroll's managing director for investigations in Latin America and the Caribbean. According to Electri's complaint, Cash had been hired as a consultant by R. Allen Stanford in the late 1990s and Kroll never disclosed this relationship. Vanity Fair also named Cash as Kroll's point man with Stanford.

Kroll and Cash are keping mum about the particulars of the Electri lawsuit, but Cash did have this to say to the New York Post:

"I wouldn't believe everything I read in Vanity Fair because most of it's wrong."

Lets take him at his word for the moment and keep close eyes on Florida's Southern District Court.

-- MDT

Labels: due diligence, Electri, Kroll, lawsuit, R. Allen Stanford, Thomas Cash

And everything you ever wanted to know about it... Onward to Mars and beyond!

-- MDT

Exactly why does "Kroll Investigations" have an Amazon reviewer profile? Strike anyone else as an oddity? Then again, the book does sound interesting.

-- MDT

Labels: Kroll

Pardon our dust. We're doing a bit of renovation around these parts. You may notice that The Daily Caveat has switched to a new layout, with a "breaking news" column and a featured articles section.

With the Deeds / McConnell rematch coming soon on the bigger stage of the governor's race (they previously competed for the Virginia AG slot), and with Virginia suddenly a bellwether for the popularity of the Obama administration expect no punches pulled.

First Round: GOP operative Jared Wheeler infiltrates insular Bath County, VA seeking home-town boy, Deed's court records.

What he discovers, and what is quickly leaked to the press is an arrest on alcohol possession charges. Not an arrest of Deeds, of course. He's of legal age but rather, of Deed's son, a 20 year old William & Mary student. In other news: 20 year olds at William & Mary are drinking.

For your own safety, be on the look-out for Field Research Analyst, Mr. Wheeler. Who knows what "field" he'll be researching next.

--MDT

Details via the NYP.

-- MDT

Publish Post

Labels: Marc Dreier, Mark Dreier, ponzi

Just listen to these rambling-ass spooky voicemails he left to his latest ladyfriend (who he was FOR SURE not stalking).

--MDT

The nut:

Rupert Murdoch's News Group News­papers has paid out more than £1m to settle legal cases that threatened to reveal evidence of his journalists' repeated involvement in the use of criminal methods to get stories. The payments secured secrecy over out-of-court settlements in three cases that threatened to expose evidence of Murdoch journalists using private investigators who illegally hacked into the mobile phone messages of numerous public ­figures to gain unlawful access to confidential personal data, including tax records, social security files, bank statements and itemised phone bills. Cabinet ministers, MPs, actors and sports stars were all targets of the private investigators.

More here... including details on exactly what evidence the settlement is keeping from the public eye.

--MDT

An interesting note from a recent motion in ongoing the TD International lawsuit filed against the risk management firm's former partner, Steven Fleischmann...

Apparently, in January of 2009 TDI loaned Fleischmann $45,000 in response to a claim of financial distress. But Fleischmann's plea of poverty came only weeks after he received almost $300,000 via the side company Fleischmann had set up, allegedly, in order to funnel money way from TDI and into his own side accounts.

TDI is asserting via their motion that the loan made to Fleischmann is (firstly) external to and separate from any other contractual agreements and (2) that, due to Fleischmann's misrepresentations, the loan was provided under false pretenses.

So, that's a clear receipt for at least $45,000 of the $1,500,000 in damages sought by TDI. Also apparent: Fleischmann has no shame...

-- MDT

Labels: TD International Steven Fleischmann

Via Intelligence Online...

Subscription required (but worth your while).

-- MDT

Labels: Kroll, R. Allen Stanford

Federal News Service, in legal papers filed in DC Federal court, claims that Congressional Quarterly paid an FNS employee to turn over confidential information and that CQ representatives used a customer password to access Federal News transcripts, removed the identifying marks, and them passed them of as CQ transcripts.

FNS also makes the claim in their filing that CQ tried to by FNS in order to eliminate them as a competitor.

I can only wonder what Jeff Stein will say about all this!

CQ obviously claims the whole case is bunk. We'll see where it leads.

-- MDT

If you guessed Goldman Sachs, you'd be right.

At least according to Matt Tabbi's latest piece in Rolling Stone.

-- MDT

Labels: Death Star, Goldman Sachs, Vampire