Notable Cases in Latin America
Cracking the Naples Art Theft
When thieves broke into a Naples, Florida residence and walked out with Renoir and Monet paintings valued at $6.8 million, AIG retained Kroll to assist. For weeks, Kroll worked closely with investigators from numerous law enforcement agencies to evaluate and follow-up on leads. The thieves were captured after a five-day sting operation in which a Kroll investigator posed as a prospective buyer of a watch that was also stolen from the house. Thanks to Kroll’s work, the owners recovered their artworks and AIG was spared a multimillion dollar claim payment.
Encol Bankruptcy Fraud
In 1999, Encol, a privately-held Brazilian construction company declared bankruptcy leaving nearly 26,000 families without the apartments they had purchased at a total cost of $407 million. Engaged by a bankruptcy trustee, Kroll conducted a two-year financial investigation that revealed mismanagement, faulty accounting, and systematic fraud, including the transfer of property and assets to the personal accounts of Encol’s owner, family and friends. Kroll’s preliminary report, which identified $20 million in assts that could possibly be recovered, was filed with the trustee and the provincial prosecutor in February 2003. Kroll is continuing to assist the trustee in maximizing the value of Encol’s assets by continuing its search for diverted funds and facilitating the sale of real estate and other tangible assets.
Banco Popular Dominicano
In 1999, Kroll was hired by Don Manuel Grullon, chairman of the board of the Dominican Republic’s largest bank, to assist in the creation of an anti-money laundering program. Because the bank is licensed in New York State, the program was intended to both meet and exceed all U.S. Treasury Department requirements. As part of the program, Kroll recommended the formation of an independent anti-money laundering committee with the authority to review bank records and propose policy and procedural changes. The committee, which meets quarterly, is led by a Kroll executive, formerly with the U.S. Drug Enforcement Administration, and includes a former director of the FBI and two prominent Dominican business executives. The committee has a high profile within the bank's organization and, since its inception, has solidified the bank’s image as a model for anti-money laundering compliance in the region. Banco Popular Dominicano continues to retain Kroll as its financial consultant.
Petrobas Insurance Dispute
A four-year dispute between Petrobras, a Brazilian energy company, and two U.S.-based insurance companies regarding cost overruns on the construction of two oil production platforms ended with a U.S. federal court awarding Petrobras more than $340 million in damages plus attorneys fees. The company had retained Kroll to analyze contract issues, cost overruns, and other financial problems, and to provide expert testimony, which the judge referenced more than once in his decision as a key factor in ruling in favor of Petrobras.
SuperBonder Counterfeiting Case
When Brazilian sales dried up for SuperBonder, a household glue that previously led the market, Kroll investigators determined that containers full of counterfeit product were being shipped into Brazil through the Port of Santos. Kroll traced the distribution chain back to a Hong Kong trading company and four factories in China. Kroll’s work resulted in the factories’ shut-down, the trading company’s prosecution, damage payments to the client, and full recovery of its market share in Brazil.
Banco del Progreso Fraud Investigation
After Ecuadorian banking authorities took over the failed Banco del Progreso, Kroll was retained to investigate illegal activities that led to an estimated $800 million loss at the bank. Having determined that the bank’s former management had engaged in fraud and diverted funds offshore, Kroll provided authorities with information on the location of the assets transferred to other countries. As a result of Kroll’s investigation, the former president of the bank was convicted of fraud and banking authorities are pursuing legal action in various countries to recover the stolen funds.
Banorte Anti-Money Laundering Program
Adherence to the anti-money laundering policies and procedures that Kroll put in place enabled Banco Mercantile del Norte S.A. to successfully defend money laundering charges in the United States District Court in Los Angeles, and regain $1.4 million that had been seized by the U.S. government during Operation Casablanca, an undercover operation targeting several banks in Mexico.
“Baby Doc” Asset Search
The Haitian government hired Kroll to locate hundreds of millions of dollars appropriated by former dictator Jean-Claude "Baby Doc" Duvalier. The investigations led to the seizure of bank accounts in New York, London, Luxembourg, Paris and Geneva.
DHL
DHL needed a customized solution to manage security in its split cargo processes. Kroll was asked for advice on how to create a solution in Brazil that would allow the company to outsource this type of security—and implement an overall security policy. Kroll designed an all-encompassing plan to reduce all types of threat incidents affecting DHL Worldwide Express, including thefts, robberies, lost cargo and other types of incidents.
Security Surveys and Risk Analysis for Grupo Santander
Kroll was retained by Grupo Santander Central Hispano to perform a risk and vulnerability analysis for its Latin American Headquarters, located in Buenos Aires, Sao Paulo, Caracas, Mexico DF and Lisbon. Kroll’s experts have provided analysis of the data centers’ physical protection designs, as well as recommendations on how to improve security measures in the company’s different branches.
W.R. Huff Asset Management
Kroll was retained by the major creditor of a leading Argentine milk company that was undergoing debt restructuring. Kroll not only helped the creditor assess the quality and merits of the milk company’s restructuring plan but also performed a comprehensive valuation of the company’s assets. With a thorough review of the milk company’s business and cash flow in place, Kroll was able to design a new financial model and create two forecasts demonstrating alternative outcomes for the milk company.
Citibank Asset Search
Citibank granted loans to an important Argentine business group, which later declared itself insolvent. Kroll was engaged to carry out an asset search of this group, both in Argentina and in Chile. The investigation was focused on the conglomerate of companies that composed the group, which was highly fragmented. Kroll’s work unveiled a large number of assets, including plots of lands and private aircrafts. The total value of the real and personal properties identified amounted to US$44 million. By the end of the assignment, the client was able to negotiate the debt in better terms and finally collect the money.
Copesul – “Cia. Petroquimica do Sul”
Copesul, the second largest petrochemical complex in Brazil, hired Kroll to conduct a safety audit to map the main threats to its facilities and define priorities for managing security at the company. This project was conducted with support from Kroll Argentina and the results enabled Copesul to prioritize its security spending over the 24 months that followed, benefiting all of the companies owned by Copesul.
