Investigating Dodgy Daves

A simple guide for those starting out in investigative journalism

For journalists it is difficult to identify those involved in dodgy financial transactions especially if you are early career or like myself, have the numeric literacy of a three year old.

Unless you’re Chabuddy G from Hounslow, usually there is no document that proves beyond doubt that X is involved in something illicit. And you probably need a forensic accountant to look at it, such investigations are costly and is the reason why so much of financial crimes go unpunished. Unfortunately, financial crime is difficult to pursue for law enforcement because they are overwhelmed by case work and don’t have the financial resources to pursue many of the dodgy Daves that are out there. But that doesn’t meant that you should stay away from these types of figures.

There are tell tale signs that indicate that the person you are investigating is doing something dodgy. As an exercise, you can pull up Companies House, the UK government register of companies and pick a known fraudster and investigate him as a case study. Getting familiar with the Companies House register is useful in any case.

Or read about the likes of Artem Terzyan for instance, involved in a money laundering scheme or books like Tom Burgis’ Kleptopia, Simon Clark and Will Louch’s The Key Man or Jake Bernstein’s The Laundromat to get an idea of how the illicit financial world works. The books are very accessible and read like thrillers and give you a glimpse into the world of big finance.

Here are a few questions to ask when investigating companies and directors

• Why has the director opened and closed several companies?

• Why do the companies have similar sounding names?

• Why do the incorporation documents have slightly different spellings of the director?

• Why does the director have several different nationalities?

• Why have the companies been dormant and accounts not submitted?

Of course, there could be perfectly legitimate reasons as to why the director is behaving like that, but it also raises questions? Are the companies being used for pump and dump schemes and layering illicit proceeds? Sometimes companies, especially those that exist for less than one accounting year, can be used to introduce illicit money back into the financial system and then withdrawing the money again as licit money. It is very difficult to trace such transactions as no accounts are submitted. Moreover, once the company is dissolved, law enforcement will have difficulties in tracing that money. And it may not be worth their while in pursuing such cases in terms of time and resources.

Ask yourself what sort of business is it? Is it cryptocurrency? Is it a cash dependant business such as a laundrette, car wash or a shop that doesn’t take credit cards? It’s worth paying a visit to the premises. After all such businesses allow one to inject illicit cash into the business and make it licit.

When companies have similar names. To the untrained eye the company may appear identical but legally they are separate entities, and the director may be trying to pass off one company for another. It’s a common trick to borrow money on one company’s name, close the company and continue trading on a similar sounding company name, passing it off as one and the same when they are in fact two separate business entities. The customer will not know the difference. Similar sounding company names can be used to launder and borrow money fraudulently. It is worth checking if those companies have CCJs or country court judgments against them. It may give a clue into their business practices.

Where are the companies registered? Are they registered at an accountant’s address and not their own offices? Do they appear like shell companies with no real offices or staff despite what the glossy internet brochure says? Have they been set up by the likes of the late Ms Barbara Kahan, who similar to Mossack Fonseca, a corporation service provider exposed in the Panama papers, is singlehandedly responsible for setting up over thousands ‘off the shelf’ companies used by scammers, fraudsters and money launderers.

What is the director like?

Check if they appear in databases like the Panama papers? Does the director of these companies have several different name variations? So my surname is spelt thus Hussein but it can also be spelt Husayn, Hussain, Husain, Hossayn (you get the idea). That director on paper at least, becomes two different people. Date of birth is usually a good indication that they maybe the same person.

Does the director have several different nationalities? Possessing several different nationalities is not illegal but may be an indicator of the person’s deceptive business practices. For instance, if the businessman has bought a Portuguese passport or a Cypriot one, that should raise a red flag, this is a classic tactic. So ‘Huseyn’ from Cyprus becomes a completely separate person from Tam Hussein from the UK on paper. It is hardly surprising that the buying of nationalities is something that many Syrians do in order to avoid sanctions. As an example, the sanctioned businessman and Assad insider, Rami Makhluf bought himself a Cypriot passport, which was later rejected by the administration in 2012. Such tactics are often used by Russians as well, trying to evade sanctions.

Check the digital footprint for the company and/or director. Do the glossy brochures and advertising on the internet reveal an accountant’s office in Acton? Is there real substance to the companies? What are their social media output like? Can they sustain the lifestyle they show on their social media profiles? Are they ‘padding’ their company by putting out articles to give their company a good reputation? To find that out requires footwork, namely visiting those addresses to see for yourself. How many members of staff do they employ and what do they do? You will be surprised as to how much these employees can reveal about the work they do on their social media timeline.

What are the director's associates like? Do they also behave in a similar way? Do they have multiple nationalities, do they open and close companies? Do they have CCJs against them or outstanding debts over these companies? These are all indications that the person you are investigating is shady.

If this article has piqued your interest and you would like to learn more about investigative journalism, the Blood Rep will be running a Cold Case workshop on investigative journalism on 29th July. For those who subscribe to the Blood Rep use the code “bloodrep” on Eventbrite to get a 25% discount - so instead of paying £40 you will pay £30.

For those reading this as a forward, my name is Tam Hussein an award winning investigative journalist with a particular focus on conflict. The Blood Rep is my newsletter that covers security, jihadism, militancy and criminal networks. Do read my latest book The Darkness Inside