Wednesday, 23 September 09 - 11:28 PM (GMT) By John ML Dierckx in Pyramid Scheme Alert
Time and time again I see those articles about whether or not multi-level marketing or as sometimes referred to network marketing (MLM) is a pyramid scheme. We all have heard the stories about those companies that offer you a “business opportunity.” In straight terms, these companies usually offer you an opportunity to be self employed whilst building a business is all about recruiting other into doing the same.
In these hard economic times more and more of these schemes are offered in all kinds of shapes and forms to those gullible under financial pressure or in search of “freedom.”
Apparently there are some MLM’s out there that actually are legitimate, yet I have to see the first that is actually offering a real opportunity. Most of the MLM’s out there end up being a money maker for a lucky few at the top of the pyramid and at the bottom there are thousands of “independent business owners,” independent distributors making the money for the lucky few at the top with these “proven systems.” Across the board 90-99% of the people involved in these “businesses” end up making nothing or even lose money. So, you might as well keep working for a boss or keep looking around for something that offers real potential.
Monday, 07 September 09 - 02:06 PM (GMT) By John ML Dierckx in General
I am pleased to advise that as per 7 September 2009 I have started work at IR}S as a Senior Consultant.
IRS is an initiative of recognized top specialists in the area of integrity, security, forensic investigations, compliance, IT-security and restructuring. Staff at IRS consists of dedicated professionals keeping office in Rotterdam – The Netherlands.
The multi-disciplinary approach of IR}S makes the difference in:
integrity management
fraud and fact-finding investigations
forensic IT
transaction & restructuring services
security risk management
Clientele mainly consists of governments, enterprises, financial institutions, shareholders, advisory boards and venture capitalists. Do not hesitate to contact me should you have any enquiries.
06 July 2009 Heeding Lessons from Economic Downturn, Majority of Corporate Executives Report Need to Overhaul their Approach to Risk-Management, Accenture Study Finds NEW YORK; July 6, 2009 – The vast majority (85 percent) of corporate executives say they need to overhaul their approach to risk-management if the lessons of the economic crisis are to be used to improve business results, according to results of an Accenture (NYSE: ACN) study released today.
Accenture’s 2009 Global Risk Management Study, based on a survey of 260 chief financial officers, chief risk officers and other executives with risk-management responsibilities at large companies in 21 countries, also found that 40 percent of respondents said that their companies already have increased or will increase their investments in broader risk-management capabilities in the next six months. Nearly another third (31 percent) of respondents said their companies are currently considering increasing their future investment in risk management capabilities.
Wednesday, 17 December 08 - 12:31 PM (GMT) By John ML Dierckx in General
Recurring themes in investment frauds
Over the years several duped investor files have passed my deck. Recently I have been going over some old journals and notes and I found several characteristics coming back as well let's say recurring themes.
One person at the top and apparently in control of everything. Some of the cases passing my desk here in New Zealand, are more obvious as there are in general many more SME and the investment scene is not an exception. There was this family owned business, where father ran the show, beyond control of any of his sons, who just did as father ordered. Separation of duties? Yes, but not for father. On a larger scale, look at Nick Leeson's Barings Bank case and a similar pattern is evident, he controlled front and back office.
Unusually high returns If you may not be sold on the person directly, than if anything will pull people over the bridge it is the promise of a higher than normal return. In some instances, people even see these high returns but in order to keep the scheme going they are lured into re-investing these schemes instead of taking a payout or - as is the case in Ponzi-schemes - the substantial payouts come in but at one point the scheme collapses when fresh money is drying up.
Lack of independent proof of profitability What do I mean with that? Well you will get all these fantastic figures, predictions and other tantalizing material, all produced to convince you that this is an opportunity of a lifetime. But what is it they are actually giving you? Well whatever it is it will look luxurious and flash. Glossy presented prospectusses to support the incredible income prognosis. But you need to ask yourself: were these figures ever audited and by whom? They may very well be an unaudited audit report, preferably presented as a copy of a Dun & Bradstreet report or something similar to give it that extra air of credibility.
Diversion tactics You are being flooded with information, however it is not necessarily relevant material! Recently I posted an article and that illustrated this tactic just perfectly. I was referred to website reports with all fantastic graphs but was it really about the opportunity I was invited to? NO! Conmen are besides that a master in drawing big conclusions from little or no evidence. Or otherwise the attention of victims is diverted from the investment opportunity, or business opportunity, to things that are of no relevance, such as incredble headquarters in tropical paradises, mansions that will make you stand back in awe (and who asks or checks whether it is actually owned) and impressive looking materials all around that make it look even more impressive or lifestyles funded by other victims to create this incredible air of success. If you can't sell the "opportunity", sell the person offering it! In Madoff’s case, it was reported that some people were simply begging him to be allowed to become an investor. He was the man, the go-to- guy.
An impressive list of references and endorsements Have you ever tried to verify the credibility of these references: tried to chase down one or the other extremely busy business person. As this is part of my job, I can assure you it is time consuming and often times a frustrating and job. Is such a reference really worth anything if you can't get a hold of him or her? It is very easy to provide fake references once you are aware if this reality. And even if you do get hold of these people, they may very well either not be aware of the fact that they are being defrauded or they could be fraudsters themselves!
Due diligence: say what? Whole all these signs may be very obvious, I see on a regular basis a lack of proper due diligence, even by the professionals. Investors, accountants, lawyers, they see but seem not to see. It is not too hard to understand, they simply don't want the bad or deal breaking news; they are committed to make the deal for real. The fraudster knows this and keeps on coming with more meaningless glam documents, rewrites of the same documents, whatever you ask for, until everyone is tired of asking for more. Moreover, and that is where things go bad, once one reputable party is lured in, the rest will often follow blindly and due diligence is out of the door: "someone else will have already done it."
Remember however, it is your money, and therefore you should take responsibility you are handing over, so make sure you do it wisely. All these recent scandals show the importance of safeguarding your interests. And if you are not sure or not getting the answers you are looking for, keep your money in your pocket and look around for the next opportunity. Most of all remember: if it sounds too good to be true it usually is.
Recently there has been some discussion in New Zealand about disbanding the Serious Fraud Office and bring the unit under the police: an initiative of the previous governement. I expressed my concerns about such an idea on the blog of Dierckx & Associates Ltd.
I was pleased to read today thatmy vote has not been wasted and that our new prime minister John Key announced the SFO would stay.
“They’ll be staying, and they’ll be investigating some very interesting crimes, I would suggest, over the next few years,” Mr Key said.
“Those who have broken the law, maybe those who have defrauded New Zealanders out of their retirement savings with all sorts of dodgy schemes, are going to know that the Serious Fraud Office will be here, with all its powers, to investigate them.”
When recruiters/head hunters, managers or HR professionals are in need to fill a position, they should look for more than just a proper skill set, experience or a good fit for team or company. They should also consider whether or not there are or may be reasons for not contracting a specific applicant.
It is estimated that around 10% (US) of applicants have criminal convictions. A considerable amount of resumes contain serious falsehoods or omissions. Diplomas and certificates can be bought at a reasonable price by those that want to beef up their academic achievements. It is therefore important to avoid costly mistakes and that appropriate measures are taken to reduce the risk associated with recruitment/hiring new employees. Especially in tighter markets where there is a shortage of skills, the need for proper hiring procedures may be overlooked or neglected.
At all times however, you will want to find a balance between required controls and attracting applicants. Employers, should use evaluation tools.We do encourage you to contact us about our Triple R program (Recruitment Risk Reduction Program): a programmatic approach embedded in the organization's policies and procedures is the preferred choice. For the purpose of this article however, and realizing that such a programmatic approach is not always realized, here are some tips that can be used immediately, at no cost, and that will assist you in better informed decisions and will hopefully reduce your recruitment risks. It is a well known idea that even the best fraud controls will not do their job if you hire dishonest employees. While it may not always be possible to predict the future and while it is believed that everyone deserves a second chance, we also promote that you can only make a good decision in these matters if you are well informed. I speak from experience when I say that I have often ended up being involved in cases where the sign were all over the wall if someone had only taken the trouble of a proper evaluation of the information provided by candidates. Ok, enough now, here are some tips that may assist you in making better informed decisions.
First determine what the actual needs of the organization are and whether or not these needs may be addressed internally. Consider recruiting internally first.
If at all possible use pre-formatted application forms and include any documents or authorization forms that you may require. This ensures that you stay in control of the information you require from each applicant and forces to sit down and document your requirements.
Have each job applicant sign a consent form for a background check, including a check for criminal records, past employment, financial information and education. Announcing upfront that your firm checks applicants’ backgrounds may discourage applicants with something to hide, and encourage applicants to be truthful and honest about mistakes they have made in the past.
In addition to an actual check, ask whether or not an applicant has been convicted for criminal offenses in the broadest possible terms allowed by law. Laws may differ considerably so ask your lawyer or HR professional where the boundaries are.
Towards the end of an interview, advise applicants that the firm performs a criminal background and reference check as a standard business practice.
Ask the applicant if he or she has any concerns to share. Good applicants will usually pay no heed to the question. Applicants with a problematic background may either reveal relevant background information or withdraw their application.
You could ask applicants during an interview what they think a former employer might say about them. For example, "If we were to contact past employers, how would they describe your performance, work style?" Since the applicant has signed an authorization and has been advised that such checks may occur, the applicant may be more motivated to reveal information about past jobs.
Make sure that the applicants are advised in clear terms that any false or misleading statements or material omissions are grounds to terminate the hiring process or employment, regardless of when discovered.
Should employment commence before the completion of a background check: make sure that any agreement states in writing that employment is conditional upon a background report that is satisfactory to the employer.
Verifying past employment is often a neglected but very important tool for an employer. Generally speaking, past job performance can be a predictor of future success and offers you an opportunity to test whether or not there may be issues as to how the applicant may fit in.
Verification of dates of employment and job title are critical because an employer: there may be hidden and unexplained gaps in the employment history to should be discussed or may raise concern. There may be many reasons for a gap in employment.
When you are provided contact details of referees from past employers or otherwise, always use the general number of the organization as opposed to any private number or DDI provided. Ill-willed applicants may have made arangments with friends or family.
Gaps in employment histories should at all times be discussed. There may be a thousand very valid reasons for these gaps, however if an applicant cannot account for them that could be a red flag. Where in doubt, consider ways to corroborate the explanations provided by the applicant.
Ask for previous addresses, and likewise, if an applicant cannot account for them that may be another red flag. In some jurisdictions (for instance US) previous addresses are paramount to efficiently and effectively perform adequate criminal background checks due to the way the system is set up.
Obtain a listing of all past addresses for five to ten years.
Advise applicants that besides pre-employment screenings, employment screenings may be performed for specific reasons for instance if a future investigation is required.
Since you already obtained the authorization, do actually check for criminal records. There are services providers that can assist in this, as well as obtain financial and other background information.
Finally, documenting an attempt to obtain references can demonstrate due diligence and may be seen as an expression of how serious you take your company and its employees, the applicant included. They are after all your most important asset.
While these short tips may address some of the most pregnant issues regularly overlooked, Dierckx & Associates promotes you to have a comprehensive program in place. It does not need to be expensive and it does not necessarily mean going overboard. Your employees are one of the most important assets of your organizations: treat them like that, which starts by due care in hiring decisions. In some jurisdictions, this extra care is also required because of the potential of claims on the basis of 'negligent hiring' or because you may be on the receiving end of a claim based on for instance discrimination.
Dierckx & Associates in conjunction with its invovement in the Arcis Group, have developed a comprehensive program especially aimed at SME. Call us for more information.
Monday, 29 September 08 - 02:44 PM (GMT) By John ML Dierckx in General
PRESS RELEASE
New Board Members Announced
On September 23, 2008, The Loss Prevention Foundation’s Board of Directors approved four new board members. These individuals are industry leaders and have been chosen to help govern The Foundation, as well as provide strategic direction for the organization. The following individuals have accepted the nomination to serve on The Foundation’s Board of Directors:
·Patti Feltz, Vice President Asset Protection, Polo Ralph Lauren
·Monica Mullins, Vice President of Asset Protection & Safety, Wal-Mart Stores - U.S.
·Kevin Valentine, Vice President of Loss Prevention, Sterling Jewelers
·Stan Welch, Vice President, Director of Loss Prevention, J. C. Penney’s
According to The Foundation’s Chairman, Frank Johns of A. C. Moore, “It is very gratifying to have such wonderful industry professionals join this Board of Directors. I couldn’t be more pleased to have such a well-rounded group of individuals help govern this organization.”
The Foundation, whose mission is to advance the loss prevention profession by providing relevant, convenient, and challenging educational is organized as a not for profit, 501 (c) 6. “Having such a diverse group of individuals provide direction for this Foundation shows the level of support this organization continues to have from this industry.We could not ask for a better, more passionate group to lead this organization” said Gene Smith, the Foundation’s President.For a complete list of board members, please visit our site at: http://www.losspreventionfoundation.org/about_us_board.html
Thursday, 07 August 08 - 10:12 PM (GMT) By John ML Dierckx in Scam Letters
This came in this morning. An oldie in terms of 419 scams but apparently still in use. DON'T FALL FOR IT.
From: "Lomza Saton" <lomza_saton350@yahoo.com> To: Subject: CRUDE OIL SALES VENTURE. Date: Friday, 8 August 2008 8:21 a.m.
Dear,
I wish to introduce you to this highly prospective crude oil sale venture. What do I mean? I propose that we become partners in a crude oil sales project under the umbrella of the National Petroleum Agency of Sao Tome and Principe. I am presently in Sao Tome and Principe Liaison In South Africa .
In this project, we will register either your company or a joint company with the local Corporate Affairs Commission of Sao Tome and Principe ; re-assign an already allocated crude oil sale license to the company and act as representative of the Petroleum Agency in selling of crude oil to the end buyers.
I have assisted a company based in Oman, Middle East to secure a crude oil sale license allocation in 2005. The director of this company, Mr. Ahmed Syed could not actualize his dream in this project as he; the sole owner of the company was unfortunately struck by stroke therefore incapable of involving in active business.
I will package you as the crude oil sale license beneficiary if you are interested. We would re-assign the sale license earlier given to Mr. Ahmed to your/our company. This will give your company/our joint company the legal authority to act as crude oil sales agent/representative for the petroleum agency.
The assignment of the crude oil sale license allocation to our company gives us the privilege to operate as first lifters of crude oil from the block. This attracts US$2.00 discount per barrel to the lifter. The US$2.00 is our (lifter) entitlement from the local petroleum agency (national petroleum agency), also been able to get final buyers entitles us also to a US$1.00 discount from the discount given to the end buyer as "mandates". As we are going to be lifting 2 million barrels per month from the block, US$2.00 discount from local petroleum agency sums up to US$4 million per month. And US$1.00 discount from the end buyer comes to US$2 million per month.
This totals to US$6 million gross coming to our group per transaction/per month. On equity sharing ration, both of us will be netting in a cool US$6 Million as profits monthly. This proceeds known as commissions will be shared equally on equity between the both of us at the end of every sales operation month. This implies that shall both go home with US$3 Million each.
This project is highly prospective and presently the most legitimate money making machinery someone can set up. What is so interesting about the project is that our both presence is not much needed, rather after the registration of your/our company and obtaining the crude oil sales license, we would connect buyers to the Petroleum Agency by any means we choose and our commissions will be directed instantly to our nominated company bank co-ordinates.
I will gladly appreciate your understanding and keen interest to be part of this moving train called CRUDE OIL SALES VENTURE.
Please feel free to contact me on the number below or reply to this private email
I came across this interesting article which is something we all may want to consider, especially SME's. Besides checking your companies office/house records, make sure you regularly get a credit report for your business and yourself.
Organised criminals are now turning their attention from the well-documented personal identity theft to the corporate market
More than 200,000 British businesses have already fallen victim to identity theft and thousands more could be at risk, according to a survey of 200 SMEs carried out on behalf of Close Invoice Finance, part of the Close Brothers merchant banking group.
The findings appear to show that organised criminals are now turning their attention from the well-documented personal identity theft to the corporate market, with small and medium sized businesses top of their hit list. The statistics indicate that at least five per cent of SMEs have been already been targeted by identity fraudsters, while separate figures from the Metropolitan Police indicate the financial damage to British businesses could be in excess of £50 million a year.
A typical scenario could see fraudsters changing the registered address and the company secretary or director of a business at Companies House. The criminals could then appoint new directors, using them to open bank accounts and arrange to have goods delivered to a new address, effectively ruining the credit rating of the business and leaving it with significant charges to clear.
The authors see small and medium sized businesses as especially vulnerable because they lack the manpower and systems to adequately protect themselves, so their experts have put together the following advice to help SME’s safeguard confidential information:
Regularly check that your records at Companies House are correct. File your accounts electronically, using the protected online filing service PROOF. Subscribe to Companies House ‘Monitor’, an email alert that gives warning when any changes to company details are made. Don’t rely solely on Companies House records, research new suppliers or customers before issuing goods on credit
