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