It begins with a name (the right one)
A diligence investigation can only provide confidence if it’s conducted on the right name, and over the years I've run into a handful of situations where my investigation revealed that the subject was operating under a new name or alias. A great example of this emerged this week, when the Department of Justice obtained a guilty plea from Richard Dale Sterritt, Jr., also known as “Richard Richman,” a man who defrauded investors of more than $17 million between 2019 and 2021. He did this while operating under an alias to conceal that he had previously been convicted for securities fraud.
"As alleged in the superseding indictment, between March 2019 and January 2021, Sterritt and his co-conspirators defrauded investors of more than $17 million that they claimed would be used for an oil and gas venture called Zona Energy. Sterritt misappropriated the lion’s share of investor funds, which he spent on personal expenses, including luxury cars, travel and high-end clothing. Sterritt also wired investor money to other businesses he controlled, including a purported cannabis business, and to his friends and girlfriends."
How can you tell, though, that someone is operating under an alias? Usually, my suspicions go up based on what I don’t find: Why is there no address history for this name before five years ago? Why were all of a 40-year old woman's social media accounts created two years ago? Why are there no press releases or media reports regarding the career of a man who claims decades of senior executive experience?
These kinds of gaps where I expect to find information are signs to dig deeper. In one case, I discovered that a subject with a common name (think “John Smith”) had legally changed his name from something much less common, which explained why he suddenly appeared in databases just a decade ago. Under the former name? A history of allegations of real estate fraud and family ties to organized crime.
It's all well and good to report that you found no criminal history for a particular name, but you'd better be sure that it's the right name in the first place.