The solutions to the unique problems within the business environment are frequently beyond the resources of the local law enforcement agencies. They may not have the expertise or manpower to conduct complicated and time-consuming investigations. They are required to respond to the public’s demand to reduce crimes involving violence, drugs, and gang activities. As a result, law enforcement resources are primarily and rightfully utilized to protect the majority against violence–the business community, in some cases, must rely on private investigators to remedy internal problems. Criminal actions can then be referred by the business community to the judicial authorities for appropriate action.The investigator can play a vital role in the legal and business environments. The role of the private sector investigator is parallel to, but not identical with, the role of the police investigator. While each investigator may use similar techniques, the expected focus of their outcomes are dissimilar. The role of the law enforcement agent is reactive–an incident occurs and the agent responds to identify culpability. The private investigator identifies crime or injury conducive conditions and develops preventative measures.
The law enforcement agent conducts a criminal investigation for the purpose of proving or disproving that a crime occurred. If a crime is proven, the information developed will be used to prosecute the case in a court of law. The private investigator conducts an inquiry of the same incident or situation for the purpose of identifying how the incident occurred. With an understanding of how something happened, measures can be identified to reduce the probability that a similar incident will occur in the future.
A crime or accident involving company personnel and resources has a serious potential to result in civil litigation. A skilled private investigator employed to conduct an inquiry at the time of the incident can be extremely valuable in the event of litigation. A delay in investigating incidents and accidents results in the loss of critical information and evidence, which could be vital in the defense of litigation. During this delay, information frequently gets corrupted through the influences of the rumor mill, loss of detailed recall over time, and discussions between witnesses.
The private investigator is an independent source of information for the business owner. The singular reliance on an investigation conducted by an insurance company representative is not a prudent move. The qualification of the representative may not be adequate to meet the needs of the business owner. Consciously or unconsciously, the results of the investigation may be slanted in favor of the insurance carrier. Additionally, the insurance investigator may not develop the necessary and adequate information to defend litigation claims. Because of the normally high deductibles contained in insurance policies, the business owner should have an independent investigation conducted to verify the insurance carrier’s conclusions when there is a potential for a major loss.
Incidents of workplace violence are increasing dramatically. These incidents result in the potential for significant financial losses. Additionally, there are incalculable losses due to employee lost time while discussing the incident or from physical and psychological injuries. Public relations and, in some cases, sales and profit levels may be affected.
Discrimination and harassment claims must be investigated thoroughly and in a timely and confidential manner. While the focus of the investigation is to validate the discrimination or harassment allegations, the failure to use appropriate investigative techniques may result in additional litigation which may be more costly that the initial problem. The confidentiality of the situation is a very important loss prevention measure. Courts have a propensity to award substantial financial judgments in defamation of character, slander, and libel cases.
As businesses become more involved in international operations, the requirements for current and accurate information of terrorist activities increase. The diversity of professionalism of law enforcement agencies in some countries is much less than can be expected in the United States. In countries where the law enforcement agencies are a political force of the individual in control of the government, their support and information can be suspect. A competent private investigator will have access to information and resources to verify the accuracy of information provided by local authorities. He will also provide a resource for investigating incidents, which are proprietary in nature and cannot be reported to the local authorities.
There are numerous civil actions initiated annually involving improprieties by employees. The incidents range from falsification of resumes to criminal assaults and thefts. The old adage–”know thy employee”–has never been more important. Prior to the employment of any individual, actions should be taken to verify his identity and qualifications to perform the expected duties. Failure to do so may be equivalent to letting the wolf guard the henhouse. One area of frequent litigation is the concealing of criminal records by applicants. Whether they are controlling your finances or have continuing contact with your customers or guests, your chances of successfully defending a lawsuit resulting from their actions will be negligible. Periodic or updated background investigations of current employees should be conducted at least every five years or upon a promotion or transfer to a sensitive position. In these days of easy credit and frequent divorces, circumstance can change and may disqualify an individual for a position of trust.
Due diligence investigations are a vital too for business success. It is routine that a car salesman’s testimony of the value of the automobiles he is attempting to sell is suspect. Therefore, the automobile is taken for a test ride to verify his testimony. It is inconceivable that a business would even consider an investment in another firm without using the same degree of suspicion. An investigator with the requisite expertise in accounting and fraud detection should be a vital member of the staff verifying the viability of the targeted business.
One area commonly uncovered during audits or investigations of purchasing activities is conflicts of interest between the purchasing agent and the suppliers. This conflict can involve improperly diverting business to relatives and selected suppliers in return for financial or other benefits. Another problem arises when the supplier is a company owned or controlled by the purchasing agent. When either of these situations occur, costs are inflated and nonexistent supplies may be purchased. The costs reduce the legitimate profit of the business.
Counterfeit goods can create a serious financial and public relations problem for a business. When an item, which is purported to be a legitimate item manufactured by a prominent company, is sold at an unrealistically low price, there is a great probability that the item is counterfeit. The purported manufacturer is then required to endure the public relations problem generated by a disgruntled purchaser. It also results in losses to the manufacturer who could reasonably have expected to sell a similar legitimate item at a profit.
Considerable cost reduction can be achieved by the direct employment of a private investigator on a contract basis to assist in litigation support. An investigator who has become familiar with the operations and activities of a company through repeated contact will be better able to participate as a litigation resource. Costs and expenses can be controlled through direct payment to the investigator based on previously identified costs.
Identifying an appropriate private investigator can be a confusing task. Colorado, among a minority of states, does not have minimum standards or licensing requirements for private investigators. Some local jurisdictions may have some standards but they are primarily focused on age, criminal record, and experience. The experience standard is normally based on a minimum number of years employment with a law enforcement agency. There is nothing to indicate the actual duties or qualifications of the individual. When selecting a private investigator, one of the primary qualifications should be that the individual appropriately represents the company–in demeanor, dress, and attitude. The qualifications of the investigator should include prior experience in the matters to be investigated. The techniques used to investigate a criminal incident are not necessarily the same as those used to conduct a due diligence inquiry or sensitive international investigation.
The random selection of a private investigator from the listing in a telephone directory without verifying the investigator’s qualification is a dangerous method of obtaining investigative assistance. Prior to being hired, the investigator should be required to outline his qualifications in detail and provide references. The investigator’s qualifications should be verified and references contacted before allowing the individual access to your business information. The selection process should be no less than that conducted to hire a senior executive for your business.