A Tale of Two Business Deals

It was the best of business deals and it was worst of business deals..... a case from the files of an Illinois private detective.

Was it the worst of deals?  That was the question from the CEO of a family business who was sitting in my office one warm spring day.  She asked "how do I know?", “how does anyone know?".   "You can trust, you can verify and you can develop new information that could help you" said the private detective.  Business owners, large, small and micro small are all looking for an edge.  An edge, advantage when it comes down to making sound decisions that stand up to the tests of time.  With a little investment of effort and time, small business owners (SBO) can learn the research methods used by investigators for decades to verify or develop information on her prospective client, investor or strategic business partner (SBP).  Can you imagine what it would be like to start down the road of a substantial business venture with a SBP that you really know little about?  We all have enough stress, right?  How then does one evaluate or "judge" potential opportunities?  Well, one proven method is to do your research yourself (or hire an investigator to do it for you).  Yes, doing a Google is a great first step.

Regarding the tale of two biz deals, let's say in deal #1, it goes a little like this:

Our SBO, let's call her Jan, goes to the Cook County Court building and visits the clerk's office where they have the court computer filing system on public access terminals. She wants to do a little research by looking up and reviewing the name of her prospective SBP, investor or client company as a defendant or plaintiff in civil litigation.  She seeks information as to whether her SBP, etc. has been sued recently or has sued others.  The computer systems are straightforward. It takes a little while to get the hang of it, but she presses on!  Her next step is to verify corporation records for the SBP etc, which she could do through the Illinois Secretary of State, Jesse White's website.  And lastly, since her prospective SBP was in an occupation and service company, which is licensed by the State of Illinois, she needs to verify the state license information too.  

Here are the "treasures" she discovered matching the names she researched in the Cook County court's computer filing system:  seven (7) actions as a defendant for evictions and judgments entered by the court against the SBP; five (5) actions as a plaintiff moving for alleged damages against their investors and clients; and another case where the principals of the SBP were engaged in a lawsuit... against each other.  The review of the SBP's license through the Illinois Department of Financial and Professional Regulation revealed that this SBP's professional license had been revoked over 2 years ago.  Her research of the SBP's standing with the Illinois Secretary of State's office discovered that the SBP's business had been "voluntarily dissolved" almost 3 years ago.  Not to be deterred by bad news, the SBO pressed on researching the SBP's website where it (still) purported to be a legal and legitimate business enterprise.

She asked the SBP to meet for coffee at Starbuck's the next day. After getting their coffee and exchanging pleasantries, the SBO got down to the business at hand.  She verified that the SBP was still interested in her (family) business.  The SBP restated the information previously provided to the SBO that everything was "all good" and they wanted to get "involved in her business, yesterday".  At this point the SBO mentioned that she did a Google search on the SBP, finding the website which the SBP restated was all active and up to date - "it was all good".  They had some more small talk meanwhile the SBO sent a text message to a family member and excused herself from the meeting citing a client project "emergency meeting with the other family member" and I have to go, but asked the SBP to phone her when convenient.  When the SBP called the SBO the next day, she asked the SBP to comment on her investigating research and the SBP hung up and never called or emailed her again.  The end of deal #1.

The business deal #2 goes a little like this:

Our SBO, a male in his late 40's, single parent, serial entrepreneur for 20 plus years, ultra busy and successful.  He wears a lot of hats at work; sales, marketing, brand management & bookkeeper too.  He also had a prospective or potential SBP (strategic biz partner). A younger charming man claimed to be a cable television news producer in a prior job.  The SBO had met with and interviewed the SBP a number of times over the following week at different times of the day; AM for coffee, noon for lunch, even for beers after work. The SBO trusted his instincts. They had never failed him in the last 20 years of doing business, until then.  Besides, he was so busy with his growing company's work that he did not want to hire someone to do a background investigation.  Everything seemed "all good" to the SBO and he started the new venture with the SBP on the first day of the next month.  Weeks and months later everything was going fine, cash flow was better than ever. The SBO was actually only working 4 days a week now and enjoying his weekends and golfing.  He thought the SBP and his business development skills were awesome and enhanced the financial incentive and structure of their deal and gave him a credit card to use instead of the expenses and reports.  Now the SBP knew he was trusted and slowly used this trust to benefit by stealing the SBO's identity.  The SBP had left before the fraud was discovered, which totaled almost $ 50,000.00.  The end of deal #2.

These two tales of business deals demonstrate just how easy it can be to: (1) prevent a potential bad deal from being a part of your life; or (2) misplace you trust and be a victim.

This private detective's blog was written on May 22, 2014, by David Hertog, an Illinois licensed Private Detective.
He is founder - owner of H.A.I. - Hertog & Associates, Inc, 117 South Cook Street, Barrington, IL 60010
H.A.I. is a decade old, award winning and veteran owned private detective agency.
You can email him at: pi@backgroundinvestigator.net
His website is www.backgroundinvestigator.net