Call Us

Tales From a PI: The Risk of Skipping Due Diligence

Posted on

Tales From a PI: The Risk of Skipping Due Diligence

Private Investigators deal with interesting cases on a daily basis. The thing is, many businesses don’t know about or understand the benefits of using our private investigator services – until it’s too late. In this case, you are about to hear about where the client regrets skipping due diligence.

Case #1015-781

Please note that all names, dates, locations, and other details have been altered to protect the privacy of the individuals involved.

Several years ago, a manufacturing company contacted us after skipping due diligence. They sold a unique product and suspected something was off after a transaction with an unfamiliar company. They hadn’t done their due diligence on this company beforehand.

This European company was contacted by a supposed Canadian company located in North York. The Canadian company wanted to acquire a large amount of product. Excited by the potential contract worth over $10 million, the European company waived all necessary diligence.

Red Flags and Initial Investigation

The prospective client, represented by a man named “Jack,” demanded the product right away. The European company issued a purchase order, and Jack claimed his company would wire the payment as soon as the items were in transit. The European company covered the shipping costs, which amounted to several hundred thousand dollars.

The product arrived in Canada, but the European company never received the wire transfer. They panicked after they couldn’t reach Jack or his “company.” That’s when they called us, the expert Toronto private investigators equipped to handle any case.

Investigating the Fake Company

We began investigating the “company” Jack worked for and quickly discovered it was not a true office location but a virtual office/shared office space, similar to Regus. Our licensed investigators visited the site and confirmed the “company” was nowhere to be found. They had rented a space for $450.00 a month, complete with a fake receptionist, to deceive our client.

Advanced Investigative Techniques

Next, we used various investigative techniques, including online searches, discussions with sources, and surveillance. We narrowed down the area to a commercial zone in Toronto near Markham and suspected a large facility was being used to store the product.

Whitney Joy Smith, the owner of The Smith Investigation Agency Inc., led the investigation. She identified several large commercial properties on the market and theorized that a landlord might have rented out an empty building for a short period. Whitney contacted realtors, posing as someone seeking logistics space, and arranged viewings of several properties.

The Breakthrough Discovery

During one of these viewings, Whitney’s persistence paid off. She insisted on seeing the back of a facility. The realtor hesitantly revealed that it was occupied by a short-term tenant. As the door opened, Whitney saw thousands of boxes of the client’s product. She discreetly took pictures and videos, documenting SKUs, labels, and machinery.

On her way out, she noted the locations of security cameras and vehicle plates in the parking lot and immediately contacted the client and their lawyer. The lawyer quickly placed an injunction, giving us permission to secure the building and the product.

The Chase and Further Investigation

Our team set up covert surveillance to catch anyone attempting to access or move the product. After a few days, a man showed up, read the injunction, and left hurriedly. Whitney followed him while her team monitored the property.

The man led Whitney to another commercial facility. She needed to know if the rest of the product was inside. While trying to peek through a high window, she was spotted by the man, who began chasing her. Whitney managed to escape after a thrilling 30-minute car chase.

Lessons Learned and the Importance of Due Diligence

The night team did not follow Whitney’s instructions to document plate numbers without following suspects. The investigators followed the suspect vehicle without realizing they were being followed. This led to an encounter with mobsters who attacked one of our investigators. Thankfully, he wasn’t badly injured, but it was a stark reminder of the dangers involved.

The client learned a valuable lesson about the importance of due diligence. They took a nearly $4 million loss on the product, plus legal and investigative costs. However, they now regularly use our private investigator services for pre-employment screenings, background checks on new vendors, and surveillance when necessary.

The Value of Private Investigator Services

This case was a tough and expensive lesson, but the manufacturing company now benefits from the essential services private investigators provide, ensuring they never fall into the same trap again.

We provide investigative services throughout Canada, from coast to coast. If you need to hire a private investigator, contact us today. If you want to hear more about this story, visit our podcast “Tales of a PI,” where we discuss many cases just like this.

About the Author

Whitney Joy Smith

Whitney Joy Smith is a prominent figure in the field of private investigation and security, serving as the founder and CEO of The Smith Investigation Agency Inc., Smith Security Inc., and Training Centre Canada, as well as a sitting politician.

With a remarkable journey that began in the early 2000s, Whitney's professional background as a private investigator is underscored by her unwavering dedication to the role. Born in Canada and having spent her early years between Canada and the United States, Whitney possesses a unique perspective shaped by her experiences in both countries. This background equips her with an in-depth understanding of the intricacies of private investigative laws, regulations, and operational standards in North America.

Throughout her career, Whitney has garnered numerous industry awards and accolades. She takes great pride in working closely with her continually expanding agency, striving to elevate industry standards, maintain compliance, and effectively meet the diverse investigative needs of clients.

Whitney actively engages in various membership, committee, board and support roles, demonstrating her commitment to the industry and professional community. She is affiliated with all local chambers, associations and more.

Whitney's wealth of experience is not limited to her professional achievements; her thought-provoking articles have been featured in publications ranging from Readers Digest, Cosmopolitan, Huffington Post, and Mens Health to Business News Daily. She constantly seeks to redefine standards and push the boundaries of excellence within the private investigative and security fields.

To discover more about Whitney Joy Smith and the dedicated team at The Smith Investigation Agency Inc., visit our website to learn more.

Leave a Reply

Your email address will not be published. Required fields are marked *