Fri, January 15th, 2010 - 6:10 am - By Gordon Basichis
If you are planning on a joint venture or any type of engagement where you have to take on a strategic partner, it behooves you to run background checks on both the corporate entity and the principles of the company. Conducting background screenings like bankruptcies, liens, and judgments, business credit reports, and criminal and civil records is not only cost effective it is vital in this day and age.
At Corra Group, where we conduct business research and corporate investigation on a daily basis, we find that many business persons come to us, after they have had either second thoughts, or feel they have been taken over. Looking into your partners, your vendors, or your new business account in the aftermath, usually indicates that something went wrong and now you are looking to determine what kind of mistake you made. Or, you have been taken for your money, public embarrassed and are now looking for restitution.
Let me make it simple for you. If you are contacting us in the aftermath of a business deal gone wrong, then changes are you already know the story. Perhaps you want to go to court and obtain a judgment against your now ex-strategic partner. Perhaps you want to conduct asset searches to see if this person has money somewhere that you can somehow attach. In short, changes are you are not the first one the person or the company has taken over. Unfortunately, you probably won’t be the last. The sad fact is when you obtain a judgment you will find there is a long line of other former partners or associates who have been victimized by fraudulent scams. Collecting you money will be difficult, if you are the tenth one in line. And searching for assets can be a good idea, but then if there are entities with judgments lined up ahead of you, then chances are they will either have first dibs or the money will be split accordingly. If you are the one who laid out the money for the assets search, then the money you retrieve may not even repay your investment.
Fraud occurs all of the time, but especially in this lousy economy. People are desperate. So, either desperate people commit fraudulent acts, or nefarious people take advantage of the desperate ones, bilking them when they are struggling to hold onto their businesses, their houses, whatever. We see the types of scams where one partner is enticed to put up his money because the other claims that while he has millions tucked away he can’t get to it at the moment, as he is going through a hostile divorce. After one or more series of a lopsided risk, the one who puts up the money discovers his erstwhile partner is woefully short of cash and his only property is a condo out on the poorer side of town. Hardly the person he was supposed to be. Sound odd? It happens all the time.
I have posted a number of times on Business Research. One such article was A Recession Precaution Conducting Business Background Checks. That was but one of several articles warning anyone going into business ventures to check out the other party. Not long ago, our business research dissuaded one group from investing with another where they had to put a hefty six figure escrow into the account. The other side, once the escrow funding was confirmed, would supposedly make all best efforts to find them a loan. Not quite. The scam was the group would pocket the escrow, which was in an offshore account, and our clients would have hell to pay in getting its money refunded.
There are many stories in the Naked City. Most end up with happy endings. People promise to pay or promise to invest matching funds. Then they don’t. You are stuck, feeling foolish, and a whole lot lighter in the wallet. Run background checks. Up front. You will feel better about your investment.
Check them out before you do business.