How does a potential investor in a hedge fund or private equity firm evaluate and select a background investigation firm? Here is a video which provides an overview about selecting a background investigation provider:
Here are links to some of the laws and resources mentioned in this video:
2) Drivers Privacy Protection Act
4) Social Security Death Index
Potential investors might be tempted to use an online background investigation database service as a component of their hedge fund operational due diligence and private equity operational due diligence processes. There are a number of questionable firms out there which may offer incomplete searches and information. Here is an interesting video about the plethora of general background investigation scams on the internet:
Here is another interesting video about the use of affiliate programs with background investigation scams:
Here are two interesting past articles from the Hedge Fund Law Report relating to hedge fund background investigations in an operational due diligence context:
1) In Conducting Background Checks of Hedge Fund Managers, What Specific Categories of Information Should Investors Check, and How Frequently Should Checks be Performed? From The Hedge Fund Law Report – Vol. 2 No.36 (Sep. 9, 2009)
2) Why Are Most Hedge Fund Investors Reluctant to Sue Hedge Fund Managers, and What Are the Goals of Investors that Do Sue Managers? From The Hedge Fund Law Report – Vol. 2 No.52 (Dec. 30, 2009)
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Here is a recent story regarding resume fraud involving investment firms and dating is concerned anyways. This is the lesson from the story of Jaitass Dhanoa (aka: Jay D. Singh). Singh is 27 year old gigolo who utilized social networking sites such as Match.com and IndianDating.com to trick unsuspecting victims.
Here’s a great song about gigolo’s:
The interesting part is that he conducted an elaborate identity theft scam to do. In addition to generating fake passports and emails Singh also claimed to work for Deutsche Bank. DealBreaker has an interesting theory on why he picked Deutsche Bank (whose slogan is “Passion to Perform“):
“Pretend, for a moment, that you are the sort of person who would lie to a female to get what you wanted in the short term. If you figured a (fictional) gig on Wall Street might help you attain certain goals, which firm would you go with? Depending on who the lie was being told do, most hedge funds would probably be out, as a) they’re not household names to the general population and b) should the lady in question happen to know the firm of which you speak, a staff of <1,000 could pose problems should she know someone else who works there and decide to do a background check. Restricted to banks, Goldman would presumably be the (fake) employer many would go with,** unless they wanted to come off as “finance-y, but also man of the people” in which case it’d be Citi. Jay D. Singh chose Deutsche Bank, which apparently worked just fine for quite some time.”
Social networks scams are nothing new but they are a growing business on the internet – including ones which try to utilizing social engineering techniques and chatbots to steal data from companies such as hedge funds.
Singh also said he worked for the International Monetary Fund. Here is his LinkedIn account which among other things details his MPhil in Financial Engineering and in finance from the PhDUniversity of Cambridge and degrees from Wharton. He also showed the women fake e-mails and a bogus U.S. passport. A victim said he had pretended to be a U.S. citizen because he was afraid Indian American women would see him as a seeking an American wife only for the permanent-resident status marriage could provide.
Singh pleaded guilty to aggravated identity theft, bank fraud, and false representation of U.S. citizenship and today was sentenced to 3 1/2 years in prison.
One victim, was even engaged to marry him until another victim contacted her to disclose the lies. “He created a relationship where I kept falling more and more in love she said.” Sounds similar to hedge fund investing….
This blog will provide a forum for information and discussion of hedge fund operational due diligence, risk and background investigation information.
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