The New Year started with a bang for K2 Intelligence: a bold acquisition and new leadership for the Americas. In response, there was a good amount of press in the New York Times, on Bloomberg, National Public Radio and in the Economist.
Each of these stories focused on one aspect of our business or another. But what may not have come out directly is the idea that drives our growth. It is our ambition to build a business around providing private solutions to public policy concerns.
In a sense, when Jules first got into the investigations business he was providing companies with a private solution to combat the public problem of fraud and extortion. That was 40 years ago. Since that time, the types of problems may have changed but the basic human compulsions have not.
So let me take a moment to explain how all of our various activities—old and new—fit together and what guides our growth now and in the future. It is our primary belief that the future of regulation in the US and throughout the global economy is a movement away from direct government oversight and toward rules and regulations that require self-policing.
Corporations are paying closer attention to their anti-corruption policies. They want to be sure they have minimal exposure to violations of the Foreign Corrupt Practices Act or UK Bribery Act. One of the most effective services we provide them is the ability to see how well their policies are put into practice thus ensuring that they will be the “first to know” if their employees cross a line.
The merger of Thacher Associates with K2 is also targeted directly at providing broader anti-corruption services to our clients. Toby Thacher and his partner Joe DeLuca are pioneers in this realm. Their experience rooting out graft from the construction trades working on New York City’s premiere building projects will be the foundation for our further expansion of this model private solution. The clean-up work surrounding Hurricane Sandy is the perfect example of this point as the Newark Star Ledger ably points out.
The presence of Toby, Joe and their team of 70 monitoring professionals at K2 is a milestone in our development of this strategy of private solutions to public policy issues.
Rich Plansky, who also joined K2 this month, helps us achieve that goal as well. Rich believes, as do I, that the investigative services we provide can be a powerful tool for groups of concerned individuals seeking to address broader issues. He’s working on concrete examples of that philosophy and I hope to be able to share those with you soon.
Anti-Money Laundering is another robust example of what I mean. Banks throughout the world are increasing the attention they pay to AML/OFAC compliance in the wake of record-setting fines levied against banks. Although they are regulated, the bulk of the oversight comes from private sector. In fact, that type of oversight may soon be brought over to the hedge fund industry. The Treasury Department has begun to think about requiring hedge funds to follow similar self-reporting protocols.
As our roster of clients deepens and the range of solutions we provide those clients broadens, the central strategy of this firm remains the same. If you would like to discuss this further or simply have a question, please feel free to get in touch directly.
Jeremy M. Kroll
CEO and President
(New York) Jeremy Kroll, CEO and co-founder of K2 Intelligence announced today that Richard Plansky has joined the firm as Executive Managing Director, with responsibilities for the Americas.
“Rich is a highly respected practitioner and a relentless advocate for clients who knows how to harness the power of technology to solve their most pressing problems,” Kroll said of Plansky. “Over the past twenty years, he has forged a distinguished career in both public service and in the private sector. Like the other members of our hand-picked team at K2, Rich is a central figure among the next generation of leadership in our industry.”
Plansky was most recently Senior Managing Director and Head of the New York office at Kroll Advisory Solutions where he led the general investigations practice for the U.S. At Kroll, Plansky also played a key role in developing the firm’s Cyber Investigations practice.
Plansky, who received a public service award from the Retired Detective’s Association last night, has had a long-standing relationship with the City of New York and Mayors Against Illegal Guns, an organization he helped to create while working for Mayor Michael R. Bloomberg. While at Kroll, Plansky led two ground-breaking undercover investigations on behalf of the City of New York that demonstrated how easily guns could be purchased by criminals at both gun shows and through the Internet.
“Jules and Jeremy Kroll have always been powerful proponents of the idea that the private sector has a crucial role to play in addressing the most important public policy issues,” said Plansky. “I share their passion and have seen firsthand how expert investigative practice can have a positive impact on complex problems like fraud, corruption, and gun violence. I could not be more excited to work with Jules and Jeremy again.”
Plansky has an extensive background in corporate investigations, including fraud, intellectual property infringement, FCPA violations, and employee misconduct of all varieties. Litigation support and investigative due diligence are also strong focuses of his practice. In addition to managing the New York office of Kroll Advisory Solutions, Rich was responsible for strategic business development, including recent initiatives involving high technology investigations and solutions to the problem of sexual assault and misconduct at private schools, colleges, and universities.
Prior to working at Kroll, Plansky was Deputy Criminal Justice Coordinator for the Mayor of the City of New York, where he supervised the development of numerous criminal justice initiatives. Prior to that, he served as an Assistant District Attorney for the District Attorney of New York County. Plansky received a BA, summa cum laude, from Duke University and a JD, magna cum laude, from Harvard Law School.
The Economist covers the corporate investigative industry and Jules Kroll’s role at the center of it:
Another threat to the old order comes from K2 Intelligence, backed by Mr Kroll and run by his son, Jeremy. This was set up in 2009, when a non-compete clause with his old firm expired. These days Mr Kroll senior, now 71, is more focused on Kroll Bond Ratings, an attempt to disrupt the credit-ratings oligopoly.
K2 has started to make a mark, conducting the investigation into alleged bribery that forced Alcoa, an American aluminium firm, into a $447m settlement with Alba, a Bahraini one. Convinced that the future belongs to those with the technological savvy to “tell the story” by interpreting vast quantities of data, Jeremy Kroll has joined forces with Palantir, a security-software firm with past links to PayPal. Palantir and K2 have been crunching through 18 terabytes of transactions, e-mails and phone records in the hope of connecting dots to support the Madoff trustee’s litigation against investors who took more out of the Ponzi scheme than they put in. One program draws visual webs that show the length, destination and other features of phone calls made by Mr Madoff and his staff, and then looks for patterns.
A fast-growing business where technology will be crucial is fighting money-laundering. Banks are under pressure to weed out suspicious transactions, but they are drowning in data. They are willing to throw a lot of money at the problem because the damage if they mess up can be enormous. Witness the $1.9 billion in fines that HSBC recently paid to settle allegations that it had abetted money-laundering by clients in Mexico and elsewhere.
K2 Intelligence Acquires Thacher Associates to Expand Integrity Monitoring Model Nationally and Internationally
(New York)— K2 Intelligence, the business investigative and intelligence firm founded by Jules and Jeremy Kroll, has acquired investigative consulting firm Thacher Associates LLC. In addition to providing due diligence, investigative/audit and loss prevention services to both private and public sector clients, Thacher Associates is recognized as the nation’s leading construction project integrity monitor.
Thacher Associates’ President and CEO, Thomas D. (“Toby”) Thacher II, and Executive Vice President and Chief of Operations, Joseph A. DeLuca, built Thacher Associates in part by serving as integrity monitors on such high profile projects as the post 9/11 Ground Zero clean-up, the ongoing rebuilding of the World Trade Center, the construction of the new Yankee Stadium, The East Side Access and the Second Avenue subway lines, and the building of headquarters for such corporate giants as the Bank of America, AOL/Time Warner, I.A.C and The Canadian Imperial Bank of Commerce.
Both Thacher and DeLuca will continue in their present positions to lead Thacher Associates as it expands its innovative and cost saving monitoring models across the U.S. and internationally.
Thacher Associates was formed in 1996, after Thacher and DeLuca had achieved high acclaim for the unique Inspector General program they designed and implemented in 1990 to protect the New York City School Construction Authority’s $4.3 billion construction program.
Toby Thacher served as SCA’s first Vice President and Inspector General for from 1990 to 1996. In that capacity, Thacher made innovative use of criminal, civil and administrative law to combat fraud and build a community of independent private-sector inspectors general who work with contractors and vendors on site and in real time to prevent and detect fraud instead of the usual path of investigating it after the fact.
Toby Thacher said today, “I never imagined we would create a whole new category of financial and integrity watchdogs or that the integrity monitoring model would turn into such a valuable—and growing—business. We’ve barely scratched the surface on where we can take this model of integrity monitorship.”
Thacher Associates has provided integrity monitoring for the City and State of New York, Port Authority of New York and New Jersey, Metropolitan Transit Authority, and such private clients as JP Morgan Chase, Columbia University, The Durst Organization, The New York Yankees and Brookfield Properties. The backlog of repairs and improvements to the region’s infrastructure in the wake of Hurricane Sandy is expected to increase the need for Thacher’s services.
“Thacher Associates is a prime example of a firm,” said Jeremy M. Kroll, CEO and Co-Founder of K2 Intelligence, “that offers a private solution to an important public policy concern. The Kroll family’s experience building strong businesses from similar investigative, diligence and monitoring services will combine with Thacher’s market leadership in integrity monitoring to build K2’s position in this nascent field.”
The combined firm will employ 120 professionals in New York, London, Madrid and Washington, DC. “Demand for our services both in New York City and elsewhere has far out-stripped our ability to grow organically,” said Joseph Deluca. “Working with K2 and the Krolls will make it possible for our firm to grow in cities across the US and on large construction projects around the world.”
The sheer size of today’s construction projects makes them vulnerable to fraud and corruption from the numerous vendors and contractors participating in a multi-year project. Even well-run contractors get caught up in questionable practices. Instead of disqualifying such contractors from being awarded a contract from continuing on a project, such contractors can be required, as a condition of continued engagement, to retain an integrity monitor throughout completion of the project.
Thacher typically charges fees that are 1% or less of the total project cost. Over the course of an integrity monitoring assignment, Thacher’s professionals generally account for cost savings far in excess of the firm’s fees.
“In the wake of Hurricane Sandy, Thacher’s core market in New York will see the launch of numerous large-scale public and private construction projects to repair our battered infrastructure,” said Jules B. Kroll, Chairman of K2 Intelligence. ““I’ve known and admired Toby Thacher for a long time. Now is the perfect time to combine our experience and talents into one growing firm.”
The New York Times’s Dealbook covers K2 Intelligence’s acquisition of Thacher Associates:
K2 Intelligence, the investigative business started by Jules B. Kroll and Jeremy Kroll, has acquired the corporate intelligence firm Thacher Associates, a deal highlighting the growing and lucrative business of internal investigations and corporate monitoring.
Thacher, which is based in New York, is a leading player in the niche business of overseeing large-scale real estate development projects on behalf of governments and developers to ferret out corruption in the construction process.
The deal, which is expected to be announced on Thursday, underscores the prevalence of private watchdogs not only in the building industry but across corporate America. Both government regulators and large companies are increasingly looking to independent overseers to monitor businesses for possible wrongdoing.
A couple in Greenwich Village were arrested over the holiday weekend for possessing the explosive HMTD:
“It’s extremely potent,” said Mitch Silber, executive managing director of K2 Intelligence. “One of the reasons why it is so appealing for terrorists to use (is) because they can get all the ingredients for this at local hardware stores.”
[...]CBS News has learned that police seized two shotguns, a flare launcher, nine high-capacity rifle magazines, various handwritten notebooks containing formulas, literature on how to make booby traps and homemade weapons, and pages from a do-it-yourself manual called “The Terrorist Encyclopedia.”
The New York Post reported Greene was a member of the Occupy Wall Street movement but the group has denied this.
“The assumption was that the vast majority of people there were peaceful protestors but there was a more radical fringe element to the group and there was a concern that at some point they might turn to violence if they weren’t accomplishing their political aims,” Silber said.
Victims of natural disasters are often eager to begin reparations and return to normalcy, but they need to be wary of scammers offering fraudulent repair services, cleanup, and loans. Others are motivated to contribute to victim assistance programs and organizations as quickly as possible, but it is important to exercise caution and conduct some basic due diligence first.
Repairing and Recovering
At a stressful time when money is often tight, fraudsters know they can take advantage of victims, if they are not careful. Contractors may make phone calls or come door-to-door offering services for rates that seem reasonable, but they may not be equipped to do the job. Although the need for repairs may be immediate, it is crucial that victims conduct due diligence before hiring a contractor.
It is critical to make sure that the contractor is licensed and insured and has a physical address for the business. If someone comes to your door offering services and refuses to show ID, is driving an unmarked van or truck, or has an out of state license plate, be wary and proceed with caution. A legitimate contractor will not demand full payment up front or request cash only, nor will he ask for your personal information such as bank accounts, insurance numbers, or social security numbers. It is essential to read over and understand all paperwork as fraudsters often try to rush their victims into signing papers without time to read them over. Do not sign any contracts with blank lines and make sure the contract includes all details of the work, cost, timeline, and payment. If you are skeptical, contact the Department of Housing and Urban Development for more information.
Some fraudulent contractors will also offer a home repair loan to help pay for the services the contractor will provide. Always research loans thoroughly and compare the rates and fees for loans not recommended by the contractor. If the contractors loan differs greatly from other loans, that should be a red flag.
Donating to Legitimate Organizations
In the wake of a natural disaster, there are often a number of “pop-up” charities created to aid and assist those in need. While many of these may be legitimate, it is important to remember that it is difficult to create an authentic charity in such a short time frame. It is safer to donate to a charity that had been established prior to the occurrence of the disaster.
Oftentimes, fraudsters will create charities with names that are similar to well-known charities in order to appear innocuous. They frequently create websites, send emails, and solicit phone calls to lure in potential donators. Legitimate organizations and charities typically have websites ending with .org rather than .com. Using websites such as www.guidestar.com, www.give.org, and www.charitynavigator.com for due diligence can help a donator decide on the legitimacy of a charitable organization.
Following natural disasters, fraudsters will frequently pose as a victim in order to scam unsuspecting donators. Emails, phone calls, and door-to-door solicitations play off of people’s emotions and should be considered a red flag for natural disaster fraud. Before donating to anyone who sends an email, makes a phone call, or comes to your door, ask for some written material on the organization, so you can make an informed decision. Legitimate organizations will never ask for donations via money orders or wire transfers, and donating in cash should be avoided, as there is no guarantee the money will go to the charity. Unless you know someone affected, never donate directly to an individual claiming to be a victim. It is also important not to give out personal information via telephone, text message, or email.
Disaster Fraud can be reported to the The National Center for Disaster Fraud at (866) 720-5721 or firstname.lastname@example.org. Suspicious solicitations and websites can be reported to the FBI’S Internet Crime Complaint Center at www.Ic3.gov.