Hedge fund manager has $15m tax lien

DDC was recently engaged to conduct a thorough pre-investment background check on an established hedge fund manager on behalf of a major investor group.  During early stage research DDC discovered that the manager had a 2016 federal tax lien for approx. $15 million. Rather than “run the meter” and do as much as we can to inflate the cost of this assignment, per established DDC policy we immediately contacted our client and shared the details.  Our client decided not to pursue an investment with this manager. We refunded the unused retainer amount, reflecting almost 80% of the client’s retainer based on its budget.

Our client’s rationale was simple and direct: “we are not going to invest with anyone who can’t manage their own finances.”

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Peter Barakett

President

DDC – Due Diligence Consulting LLC

DDC Investigations LLC

Hedge fund manager convicted of sexual assault

A recent DDC assignment for a very large investor group uncovered that a hedge fund manager was arrested outside the USA for sexual assault on a woman while at a hotel.  DDC was able to access the case files, and the video tape and still pictures of the HF manager show him chasing the woman down a hotel hallway in his underwear.  This criminal case went to trial, and the HF manager was convicted and incarcerated for approximately one year.  DDC believes most hedge fund investors are not aware of this incident because they, and the background check service providers they use, do not check a person everywhere there is a contact or connection, and/or under all name variations ever used.

Peter Barakett, President

DDC – Due Diligence Consulting LLC

DDC Investigations LLC

Director falsifies bio

DDC’s research recently found that a director of several public companies had stated in some of his professional bios that he was a CPA when in fact he never had a CPA, nor a degree in accounting. He did have a law degree but never practiced law.

Peter Barakett, President

DDC – Due Diligence Consulting LLC

DDC Investigations LLC

Hedge Fund CFO’s $2mm tax lien

In the course of our regular investment due diligence on behalf of an investor client, DDC discovered that the CFO of a large hedge fund has a tax lien for approximately $2mm.  The tax lien does not appear on the major federated databases used by most law firms and private investigators.  It does show up as unsatisfied through a detailed court search. DDC then confirmed it remains unsatisfied (open). We believe many investors may not be aware of this tax lien because they don’t perform detailed background checks on the CFOs of their underlying investments, and/or the party performing the checks relies on a major federated database.  DDC does not rely merely on one database and a google search.  DDC checks everywhere a person has ever been, to the most original source level possible.

Peter Barakett, President

DDC – Due Diligence Consulting LLC

DDC Investigations LLC

Hedge fund manager’s tax liens

DDC was engaged to conduct a thorough background review of a prominent hedge fund manager.  DDC found that he had several million dollars in tax liens. DDC believes his prominence led many investors to believe a background check was not worthwhile. In addition, investigators that rely on one federated database or that provide a low cost / less detailed report may not have found the liens because of the unusual way that they were filed. The question now is: would you pay someone to manage your money when they can not manage their own finances?

Peter Barakett, President

DDC – Due Diligence Consulting LLC

DDC Investigations LLC

Businessman burns his residence

DDC was engaged by a hedge fund to research certain persons and entities as part of a potential investment.  DDC found that one person was arrested and convicted on 4 felony counts of arson for burning of his own residence.  The subject served approx. 7 years in jail.  Notably, major federated databases did not associate these arrests, and convictions, with this businessman, just his traffic related violations.  DDC uncovered his criminal history by reviewing his divorce case file, and found that his wife listed “imprisonment” as grounds for divorce.  DDC then contacted the courts relevant to the time frame and was given partial details.  DDC subsequently contacted the relevant dept. of corrections and was able to gain the missing details.

10 years later, a person DDC believes may be the subject’s brother was arrested and convicted for burning his residence, in the same small town.

 

Peter Barakett, President

DDC – Due Diligence Consulting LLC

DDC Investigations LLC

CFO arrested 3 times

DDC’s research recently found that a well regarded CFO was arrested 3 times in a state other than that in which he currently resides, twice for drug related offenses and once for a DUI, within the last 7 years.  All three arrests were not included in “comprehensive reports” from two major databases widely used by law firms and private investigators.  DDC was able to discover the arrests and related documentation, including police reports, by researching this CFO everywhere he had ever been, to the most original source possible.

 

Peter Barakett, President

DDC – Due Diligence Consulting LLC

DDC Investigations LLC

Director arrested for domestic violence

DDC was engaged to conduct a thorough review of the directors of a company targeted by a hedge fund client.  DDC found a director was arrested for domestic violence in 2008 in a state that he was not easily connected to.  DDC believes other firms may have missed this arrest by focusing on the current and most recent jurisdictions for employment and residence, rather than all jurisdictions he has ever had a contact or connection with.

Peter Barakett, President

DDC – Due Diligence Consulting LLC

DDC Investigations LLC