From Fraud Investigations to DESPAC Due Diligence — James Tunkey

Ch 1 — Welcome & Introducing James Tunkey / I on Asia

SPEAKER_00 0:00

What's going on, everybody? This is Chaz, your host of the D SPAC podcast. I'm here with one of my favorite people in capital markets. I've got James Tunkey with us with I on Asia. James, what's going on, brother? How you doing? I'm fantastic, Chaz. How are you? Great to be here. Man, I'm living the dream. Life is good. I'm blessed. Hey, okay. I wanted to start off. Let everybody know um what you do, kind of who you are, i on Asia, everything like that.

SPEAKER_01 0:30

Yeah, this is definitely not the apple or orange uh type podcast. We're gonna do something different. We're gonna talk about all things due diligence, uh, which is what I do. And uh I really am looking forward to having a conversation with you about its connection with uh with risk management and uh how to make the business uh work better.

Ch 2 — What Executive Due Diligence Actually Looks Like

SPEAKER_00 0:52

I love it. So talking about due diligence, um, there whenever a SPAC team is looking at bringing a target in and doing a deal with them, can you just explain real quick at a super high view for these clients or pardon me, for these uh private companies that are considering a SPAC as a vehicle to go forward? Um, what really is the due diligence process? And is there anything different between a private company due diligence and one looking to go public?

SPEAKER_01 1:25

Yeah, man, when you're uh looking to raise uh public money, uh there is a real uh requirement that you um you have to tell people the truth about who you are and where you come from. And uh and so to do that, it's a bit like uh applying for a job, you have to go through a background check. And uh the capital markets uh in the US uh really the standard is to do uh to do more than just uh check somebody's background as if they're a a truck driver. Uh and uh so it's a bit deeper. And uh and so if you're an executive of a company that you know might be going through a DSPAC process, uh really you should be expecting a healthy amount of due diligence. Uh one of the things that I think is important for people to understand is um they're gonna get their uh litigation checks down at the local level, they're gonna get uh their uh property ownership uh possibly checked, uh, but um they're gonna get their education, their employment history verified, and uh they might even get uh other things like their regulatory history, whether they've been uh sanctioned, uh, whether they're properly licensed, all these things get checked. And then uh good due diligence is uh also looking for negative media. Uh, they're looking for anything noteworthy in the socials. Uh, and um uh the more sophisticated due diligences these days are looking at uh your cyber history as well, whether you've had uh things leaked online about you through a cyber attack, and all that gets wrapped up into a risk assessment and a risk report that gives the people a flavor for what your background really is.

SPEAKER_00 3:11

So you mentioned background, background checks, everything like that. Like I mean, I know I've been through those, they can be a bit of a pain. Um, so let me ask how can a private company looking to go public make all of this less of a hassle because there's already so much that they're dealing with at that time?

SPEAKER_01 3:33

Well, it's that's a readiness question, really. If you want to go uh public or you want to be a part of a D SPAC uh process, you have to expect it. And so you shouldn't be waiting until the last minute. Uh, you should be proactive in your readiness uh and uh get your paperwork together. That usually requires a release. Uh, it usually requires people getting their education certificates and their work history together and uh all that stuff can be packaged up nice and neat. And what I find is the the real pain in the ass, uh forgive my language, is just that people either uh do it again and again and again uh because one party in the deal is asking for the same background check, and then another party is looking for it. When you know sophisticated uh teams will just prepare it once, stick it in the vault, and uh continue to share it and update it as they get through the process. And if people are proactive and adults, it's not really that much of a pain.

SPEAKER_00 4:36

I'm with you. So, okay, let me ask this um a domestic filer versus a foreign filer, if if this is a company that's in Europe or Asia or South America, Africa, um, are things the same for them on due diligence as they are for a domestic company that's doing a transaction with a spec? Or does uh does everything change and shift when they're international?

SPEAKER_01 5:09

The thing that changes is the local requirements around privacy of data. So if I'm gonna do a background check on somebody in Europe, I have to comply with GDPR. But it's the same here in you know, in California. If we're gonna do a background check on somebody in California, um, you know, there's privacy protections there as well. So uh the big uh number one change is is what's the local privacy law. Then the second difference is really what's the availability of the public records. Not to get too deep into the weeds, but you know, in some countries, like Egypt, uh there might be uh very limited public available records uh to uh really look for when it comes to litigation history. Uh and in some places, litigation gets scrubbed after a certain number of years. Local privacy laws or local regulations might say after after 10 years, we're not keeping this in the town archives, for example. So all that adds up country by country, jurisdiction by jurisdiction, and that's the primary differences in uh, you know, an international background check in one country versus another.

Ch 4 — The Three Core Pillars of De-SPAC Due Diligence

SPEAKER_00 6:17

I appreciate that. That's huge. Okay, so let's take a step back real quick and talk about like, are there standard pillars for due diligence in a DSPAC process? Like, what are the what are those core tenants that this private company needs to expect that they're going to deal with? Obviously, we talked about background checks, but but there's got to be really more than that that's there. What else uh do we see?

SPEAKER_01 6:44

Yeah, I I think a standard uh pillar is can you prove who you say you are? Right? If you say that you went to Princeton, you know, are you telling the truth? And so all the things that you've been saying about your background, your company's history, uh, where it operates, what its business is, that has to be verifiable. And um, you have to expect that. Uh and if you're um if you're not uh able to uh produce um a background check, a sort of verified um result, there might be a real problem uh with uh getting the market to accept you as a uh as a real business. Then the second pillar is are you presenting a reputational risk to the people around you? Is there something in your background uh that um you know creates the ick factor, for lack of a better word, uh, with teams that are signing off on investing um in this deal. And um, if if there's something in the background that's got a bit of an ick factor to it, but you've dealt with it, I mean, that's uh that's the American way is to move on and to move forward. And that's okay. You just have to be upfront about it. So a standard pillar is is really um to to understand what are the headline issues in your background and um be upfront about it and expect they're gonna get exposed. Then I think that we really have to talk about um the the nuance, uh a nuance pillar is really uh your litigation history. Um have you been attacked publicly uh for um stealing from shareholders in the past? Have you been accused of being a fraudster? Um, was that proven out? Uh was it um was it something that you paid a fine for or was it something that you were able to beat back? And so there's a uh another pillar is a whole bunch of the nuance of what's your real litigation and and uh perhaps sanctions history and how how understandable is it to people if you say you're innocent, can you prove it?

SPEAKER_00 8:56

You know, and and I love that you talk about the the aspect of of fraud, and particularly if we're talking about uh people that are international. For example, um I had a client that was they had a CFO in Hong Kong who their company was on the Hong Kong Exchange, and the CFO had been uh had been convicted of fraud. And in the United States, that's massive. Millions of dollars um in fines, in litigation, lawsuits, settlement. Um, but for Hong Kong, she got 30 hours of corrective education. That was the full discipline that she received from from being like absolutely convicted of fraud. So if you're if you're a company that's private looking at going public on a US exchange through a spec, you do need to realize that this stuff, while it may carry some weight in your country, um, the the consequences on a US exchange are exponentially larger, um, and they are viewed more severe than how they might be viewed in your country. Um, so like so somebody like James, they step in and and they are looking for that because to American investors, fraud's a really big deal. So that's something that they that they kind of look for. Um so let me ask this. What's you're laughing?

SPEAKER_01 10:29

What are you laughing? I think a fraud's a big deal everywhere. This person just got off and and the deal team just let them on thinking that nobody would notice. That's what I expect, chess.

SPEAKER_00 10:40

Uh got it, got it. Well, uh, here's what I will tell you that I know that whenever it comes to anything due diligence related, and I'm gonna defer to you on that and your expertise. Guys, if you if you're watching this right now, just to give you pedigree of who James is, he spent a large tranche of his life living in Asia, a large tranche living here in the States. The guy has done due diligence work on, correct me if I'm wrong, over 50 D SPAC transactions. So there's not many people that you're gonna find more qualified to work internationally and domestically in your corner on a proper due diligence of a D SPAC transaction. So um, if you want to make sure it's done right, this is the guy to listen to. So that's too kind. Thank you.

Ch 5 — Why One Undisclosed Director Can Kill the Deal

SPEAKER_01 11:32

I I just want to follow up on that. You know, yeah, that idea of the D SPAC uh is really important because if you've got one bad director in there, it can kill the entire deal. And, you know, it's really about narrative. You know, if you've got something that you don't disclose that's bad in your background and it comes out, there's no way you're ever going to be able to get ahead of that negative narrative. And if somebody out in the market starts attacking you and you weren't forthcoming about your your background and your history of your team, uh it it's it's just awful to try to defend when you get dragged in front of the southern district of New York or some some other court or northern Cali, right?

SPEAKER_00 12:12

So it's it's like pick your poison on those two. But but like let I would say to your point, um all they need, all these attorneys need, these ambulance chasing type securities attorneys, they just need one little kernel of a misstep. One little kernel of a misstep. And it's not even just the attorneys, there are investor groups that are out there that they're looking for a little sliver of something, and then they'll create an anonymous short seller attack, and like they'll put a piece against you that they'll publish anonymously out there on the markets, and then whenever they do that, it can adversely impact stocks. So it's so important to your point, James, to have your house clean to make sure that you've got a clean house with no skeletons in there because the smallest little thing, and they will take these short seller reports, and half of it will be a lie. It won't even look true. So true.

SPEAKER_01 13:17

As a certified fraud examiner, uh, I often uh have other cases that I'm working on that are not due diligence, they're fraud investigations. And the fact is that people that are lying about that kind of stuff are often uh getting up to uh other bad things. And uh, they've done uh 20 years of studies at the uh Certified Fraud Examiners uh Association and found that uh, you know, these are indicators of risk. And so another important part of due diligence is that if you are uh lying on your application and your disclosure forms and you get caught about that, I mean, that's a that's a signal for the team that maybe you're not the right uh group to be working with.

SPEAKER_00 13:58

100%. 100%. So as a as a sidebar, if you do ever end up going public and you need somebody to step in, if you find yourself under a short seller attack, you're hard pressed to find somebody better than James and his team to be in your corner. Um, because it can be a really scary, ugly, angry, and frustrating spot to be in, especially whenever it's an anonymous hit piece and you're trying to figure out what do we do to figure out who's behind this and how to get it pulled down, right?

SPEAKER_01 14:28

So yeah, I I think that pulling down uh these days is incredibly difficult. I think uh the important thing is to really understand what's truth and what's not, and uh to really uh be able to get ahead of the of the the narrative uh is you know it's it's incredibly hard if you're being attacked. And so the best uh thing to do is to really be proactive and and by being up front and squeaky clean, uh you have a better chance of avoiding all of that.

SPEAKER_00 15:01

So I appreciate that. Um let's do me do me a favor. Um what from a business standpoint can you make a case for why the target company, the private company, um, can you make a case just from a business side of things, dollars and cents, uh, why they should be beyond what we've already talked about, why they should be gung-ho about getting through a due diligence process?

SPEAKER_01 15:34

Yeah. I mean, first of all, there's there's so much trust involved in the executive suite that often you uh push the background checks to the side and it's just a handshake. Uh, that's no way to run a business. And sometimes uh people do background checks. I've done thousands of them. Uh, people get very surprised when the people they trust are lying to them. Uh, and so that's the first piece. Another uh business case, the reason why that's a business important is because if they're lying to them about that, sometimes they start stealing money from the till. Period, the end. It's bad, it's bad business. Second thing is by going through due diligence, you're you're effectively uh making your business more reliable. You're making your earnings more reliable because you're going through a process of integrity. You're saying, I'm gonna look at my people and I'm gonna make sure that they are up and up, they're being uh straight. And by having that as a process, you're doing other things right in your business. That means that you are more likely to be generating the results that you expect. You're not gonna get surprised by people. Therefore, you because your business is more reliable, you have a lower cost of capital because your earnings are more reliable. Therefore, uh you should be able to borrow cheaper than your competitors, and you should be able to generate a higher rate of return than your competitors are offering.

SPEAKER_00 17:04

That is uh a compelling, that's a compelling reason. I like that. All of that. That's uh man, seriously, was that scripted? Was that scripted?

SPEAKER_01 17:14

That's the truth.

SPEAKER_00 17:15

That's uh you you were like so surgical with that. I love it. So um, okay, so let's talk about this. At a at a 30,000 foot view, 30,000 foot view, like what are the just so these guys aren't surprised on what the the procedure and steps look like if they're walking through a due diligence? What does it look like for the leadership on this private team, this private company going public? Um, what's kind of the high view steps?

SPEAKER_01 17:46

High view steps are who are your directors and officers? You got to identify them. They're they're gonna be the people that are gonna wind up in public disclosures as key people. Okay, once they've been identified, okay. What's their backgrounds? Where do they go to school? Where do they work? What are their qualifications? What are their licenses? Okay, that's what you and I would call a resume. Let's get those together. Why do we need to farm this out? We can we don't. We can gather all that internally a lot cheaper, and then you we should have an HR function that has all that in a piece of paper. It's dumped into a safe place, easy. Okay. Then instead of waiting for uh some uh underwriter or sponsor or lawyer to uh ask for it, go forward and be proactive. What's your background process? How can we get this kickstarted? And quite frankly, negotiate uh for a better rate by being proactive. Oh, sometimes I've seen service providers who add layers and layers and layers on top of my cost. So if you're uh if you're a private company and you're about to go through this process, you know, go direct to the to the due diligence vendor and and fill out the forms and and and pay for them, and you'll probably pay uh a lot less money.

Ch 7 — When to Start and the Six-Month Expiry Window

SPEAKER_00 19:07

Got it. So let's uh let's talk real quick about when this happens. So should before a target even has a spec that they've locked a deal with, should they be doing due diligence that that way they make themselves more attractive by saying, here we are on a platter, due diligence is already done? Or is this something to where there's a time clock that's on it to where it expires like milk after 30 days, you know, something like that? Like, um, or do they just wait right before the BCA is announced? Like when does this happen?

SPEAKER_01 19:49

That's such a good question. Yes, there's an expiry date, it has to get refreshed. I would say typical standard is after six months, it goes stale. Okay. So that having been said, the cost of refreshing uh, you know, the litigation over the last six months or the negative media over the last six months is minimal. And you know, once education's been verified and and employment history has been verified, like how much how many more times you need to do that, you it's already been done. I will say the worst thing that can happen is you get to the you get to the two-yard line, you're about to go in and go and and and uh get that touchdown, and the background check shows that one of your key people is a scumbag, and the deal gets paused, and then you've got to find another director, and you got to get them cleared through a background check, and you have to you have to recover. And before you know, you're not on a two-yard line anymore, you're all the way back at the 28, you know, or you're out of you're out of range altogether. And so the earlier you can clear the people that are gonna be with you as part of the process, trust me, you're saving time and money if you can do it earlier. And it's a real bad habit that people leave the background check to the last minute.

SPEAKER_00 21:12

I I would tell you that I would think that there would be value if you know that uh if you know that you're hunting, you're gonna find a team to do a deal with, a spAC team to do a deal with. Um, I would think that it would be advantageous. And you can correct me if I'm wrong. Maybe you've seen that it doesn't really add any value. I would think that if you go to a SPAC team and you say, hey, this is already one hurdle that we've cleared, like one thing to where you can take the stress out of this. We've already done due diligence on our team. Um, do you think that SPAC teams see that as adding to the value proposition of the company?

SPEAKER_01 21:51

I think it shows professionalism.

SPEAKER_00 21:54

Yeah.

SPEAKER_01 21:55

I like it. Shows you're less risky. Uh, you're it's one less thing they have to worry about. One less piece of noise.

SPEAKER_00 22:02

Got it. Okay. So let's talk. It shows like, I mean, it kind of shows that you're ready. It's one of those tools showing that you're public ready, right? So what would you say? Would you say that that's probably the big connection between due diligence and public readiness? Or do you think that it's more like more than that?

SPEAKER_01 22:23

I think if you're a public dire uh company uh director, and you know you go from private to public, you have to be ready for prime time. You have to be ready for the spotlight. And uh this is a cost of doing business and demonstrating that you're that you're ready. You get through it, and it's not a big deal. And the people that make a big deal out of it are are really uh focusing their energies in the wrong place. It's uh should be easy, should be straightforward, should be something that's part of a process, it's a process that um keeps the fishbowl clean and uh hopefully um demonstrates that there's good people on the team.

SPEAKER_00 23:03

So how about this? For a company that's private looking to go public through a spec, um, maybe they don't want to make the move too soon to pull the trigger on doing due diligence, but what are the what are the steps to kind of get due diligence ready? Like, is there anything that they need to do kind of maybe from an internal housekeeping to make sure that they don't uh that they minimize their surprises? Or is it just to kind of is what it is, fill out the application, gather all the stuff, send it in and and get busy? Or is there anything that's kind of a prep work that they could be doing in advance?

SPEAKER_01 23:41

I think it's really important to have a good mindset of a 360 mindset. Uh we're gonna be honest with ourselves about our company and our reputation to to understand online what's the reputation of my key people? What's the reputation of my business online? And that is a big part of the due diligence. What is the history of my uh chief legal officer, my chief people officer? Are they properly licensed in the in the state that I'm operating? And that's the due diligency, uh, but it it's got wider uses. It's giving you an awareness of what is my company's perception in the market to my customers, uh, to my potential investors. Uh and you can you can use that day to day. And and I think that's just another application. When you get to the, you know, closer to the finish line, you say, look, we've already done this work. Um, here it is, some of it's gonna have to be refreshed. Here's the person who's handling it on our team. Uh, here's all of our signatures for our releases. Off you go. Let's get this done. Let's not have that be a hurdle.

Ch 8 — Cheap vs. Thorough: What You're Actually Buying

SPEAKER_00 24:52

I like it. Okay. So now let me ask this. Um, I know that in the world of insurance, not all insurance policies are equal. Um, and due diligence, I would imagine that not all due diligence processes and companies are equal. What are some of the key things that if you're looking at doing a due diligence, um, what are some of the key things that might be oversells or some of the things that if you go too cheap on it, then you could be in hot water? Like, is it is it uh really just one package and that's just it is what it is? Or are there areas to where there are economic ones and I guess you could say executive ones or black car ones or whatever on a flagship? Love that.

Ch 9 — Crime Insurance & Internal Fraud Exposure

SPEAKER_01 25:51

I think uh we're living in a world where uh there's a lot that can be done more uh cheaply using technology, like to check whether somebody's uh been sanctioned. Uh, you know, that that used to take a lot of time and money uh to go through every list that's published by you know Interpol and the US government. Now that stuff gets updated pretty automatically. So um that is not something people should be overpaying for. And uh at the same time, there's um there's often a misunderstanding about what a litigation search is. Uh, if you really want to get down to uh was there an action uh in uh in the Bronx where this person lived, you might have to send a court runner out. That might cost some money. Uh it might uh take uh some time. And it's just, I'm sure, like an insurance policy. They might some people might say, yeah, we got you covered, but when you read the fine print uh from a due diligence perspective, maybe they're only covering national, or maybe they're only covering state, and they're not actually getting down to the uh to the Bronx. And maybe they're only checking the Bronx because that's where you're living today, or where the company is headquartered, but they're not checking uh you know, New Jersey because that's where you live for the last six years, or where or Texas, where you spent the 10 years before that. And so uh these things are important, uh and uh and then uh some people move internationally, right? You know, like okay, so are we gonna do a proper job when that person lived in London for two years? Did they get up to any trouble while they were there? We're gonna have to check that and then run. And hey, by by the way, when they were in London, that they set up another business, and are they still a director of a company that they're keeping off the books that nobody knows about? These things are important. And uh, I've dealt with frauds where people have used those opportunities of temporary deployments or postings to uh set up businesses and siphon money out and run uh bogus credit card scams. So uh it's a shocking awful world out there.

SPEAKER_00 28:03

I I'll tell you this, and I just want to take this as a moment to kind of sidebar something from an insurance perspective. Um, if you're private and you've never taken uh investor money before, um, you may not have ever had an insurance agent talk to you about something called crime insurance. But um, but crime insurance is this thing to where it's white-collar internal crime to where you have internal employees that are stealing from the company in one version or another. And and like James, it sounds like you're saying that this is something that happens more often than people realize. And oh yeah, yeah. And I mean, and the crazy thing is that people don't know. I I talk to company after company, and for whatever reason, other insurance agents don't bother to mention it to them. Crime insurance is remarkably cheap for like three grand a year, 3,500 bucks a year, you can pick up a million dollars of coverage for a lot of um a lot of companies that are sub 1 billion in market cap, and then it'll give you a million dollars of coverage against internal fraud, so that when Johnny gives the wrong wire instructions to a big to a big client that just came in and they wire over funds, and you're like, hey, we can't wait to work for you whenever you send the money, and they're like, What are you talking about? We already did. All the while you end up discovering Johnny's on vacation and he's over in uh the Bahamas or in Mexico, and he's uh he's emptying out that account right away, and uh he's never to be seen again because he just took 500k from you. So those kind of things happen, or as or it could be like a payroll person that's siphoning stuff off little by little over years, and you don't even realize it.

SPEAKER_01 29:54

So yeah, you're talking about half my cases.

SPEAKER_00 29:59

Yeah, it's so it's I I think that that is a golden nugget that I don't think a lot of people realize is how uh how often, because you like you said earlier, you want to trust your people, you know, and like and unfortunately, um people find themselves in bad situations and they become desperate, or they just uh just the sin nature uh gets to them and they end up uh becoming greedy and feeling that they are entitled to more, you know, or or something.

SPEAKER_01 30:28

I think that the the wonderful part about uh going uh public, you know, this DSPAC process uh should be that you have an abundance mindset, uh, that you see that uh this is the growth uh moment uh for yourself to really uh invest in processes that you might have uh not spent money on because you were trying to grow the business, and uh that you're accepting as part of the public uh process that there's gonna be things that you're paying for that you might have skipped on in the past. And you might have accepted that you you you might have had people steal from you, uh, and you might have accepted that uh not everybody's uh background check needed to be gold plated because you didn't want to spend the hundred dollars, but that's not gonna fly if you're a public company and you should embrace what the benefit is is that you're now putting systems in place that are going to protect you from that.

SPEAKER_00 31:25

That's gold. Yeah, you're 100% right. So, okay, uh, let me ask this. I because I want to get people to know James a little bit. Like I said in the beginning of the show, everybody, James is one of my favorite people in capital markets. Um, just chalked full of integrity, patriotism, and uh and encouragement. And just uh he's he's an edifying individual, but at the same time, he is also uh in a brilliant way one of the the more direct people. He just says it in a way to where he punishes you verbally and somehow you thank him for it. Um it's it's just remarkable. I don't know how you have the gift, man. But so tell me, like, tell me in the audience a little bit. Like I mentioned earlier, you lived part of your life here, part of your life abroad. What's the story there?

SPEAKER_01 32:16

Well, I am a humble boy from Buffalo, New York, and I moved to Beijing because uh Buffalo wasn't growing, and Beijing was back in 1994. And uh come from a small town, and Beijing was not that, and it was a good call. Uh, China grew for uh you know a couple decades, and I was very fortunate to uh work in the investigations and a due diligence uh space, uh, which was needed as people were growing their factories and uh growing their operations in Asia. I spent a considerable amount of time, uh, Tokyo, uh, Singapore, Indonesia, other parts of Asia, and saw a lot of the world. And uh that was really uh a very special time. And uh I moved back to the United States to uh grow this uh business, Ion Asia, which has become a market leader in uh due diligence, uh background checks and other types of litigation support investigations uh that straddle the US and Asia. And uh we're very fortunate. Uh we've got uh about 50 people working for us, great people, good families. And uh we're we're very fortunate to have uh been celebrating our uh 26th year in business now. So uh that's a a bit of a professional career.

SPEAKER_00 33:45

Okay, so you lived in Buffalo and Beijing. Who's got a better hot wing?

SPEAKER_01 33:52

Oh, Buffalo for sure.

SPEAKER_00 33:53

Yeah, okay. Oh yeah, there's no doubt. You go to Chinese restaurants, they always got the hot wings on the menu. So just figure it out ask.

SPEAKER_01 34:02

Figure it out, and they're not even close. In fact, I was watching Gordon Ramsay uh recently. They, you know, they do these last meals podcasts, and it was awesome to see that the Buffalo hot wings were uh on Gordon Ramsay's last meals.

SPEAKER_00 34:16

Wait, were they were they battered or not battered?

SPEAKER_01 34:21

Uh oh no. Uh we do not batter our chicken wings unless you go to duffs. If you go to duffs, then they've got a little bit of batter on them.

SPEAKER_00 34:29

Oh okay, okay. All right. So, and then one other thing I want to let everybody know, just because I think it's such an awesome story because I'm I talk about you being a patriot and just uh and just uh being uh just a great guy. I want to ask, because you've you've talked about investigation a little bit. I know that we've really had a focus on due diligence, but I don't wanna I don't want to miss the opportunity to talk about investigation. Like, number one, I'd love to know what's the connection there? Like, how how is due diligence connected to investigation? How did you get into investigative work?

SPEAKER_01 35:12

There's so much in that question. Let me just say, I am not a tick-the-boxes guy. Okay, there's a lot of due diligence people, they're tick-the-boxes people. If you use that uh analogy, I'm not an A to B uh person, I am the full experience guy. And the reason is because I've got fraud investigations, corruption investigations, and all kinds of other security uh uh advisory history. I know what can go wrong, I've seen it, I've seen the pain. And so because I've seen the pain, I also uh am able to look at a new background check and say, how does what I'm seeing match old losses? And because so many uh white-collar crimes are not publicly reported, often they're kept quiet, the losses are kept quiet. I know that the news media, uh, the things that you read online are not always the whole story or the complete story. So what makes me special and the link between my investigations work and the due diligence work is I truly am trying to look for other indicators or red flags of patterns that I see that match things that have gone wrong in the past.

SPEAKER_00 36:32

So let me ask you this. I appreciate that. How did you get to where you did investigative work? I mean, I'm just all of a sudden envisioning you as like Sherlock Holmes, and which I just so happened to actually be reading right now from with Sir Arthur Arthur Cohen Doyle, you know, but like um I'm reading his series. But um, how did you get into that? I was recruited.

SPEAKER_01 36:57

I was sitting next to a uh a gentleman uh who I was talking about uh organized crime in Hong Kong, and I was talking about uh the relationship between uh the military and technology and Asia. And uh a couple months later, I was working for him at a company called Kroll and was uh an early uh investigator at Kroll. And I I started out as an analyst uh looking at um news feeds and what they meant, and and then I was trained to uh go out into the field and do undercover work. And I spent a number of years uh doing undercover site visits, uh undercover interviews of of uh bad guys, and then uh was uh trained to um really do interviews of bad guys and and um was out there uh was out there in the field uh doing uh face-to-face interviews of uh some pretty awful human beings. And uh I I do I still love that work. I I like catching the bad guys, and that's a part of what I do.

Ch 11 — Skip Tracing, Asset Recovery & Catching the Bad Guys

SPEAKER_00 38:06

So, and you know what? I I think that that is one of those things to where what you talked about just now, I don't think people see it. They don't realize like the side of what you're talking about. You're saying you're talking about going undercover. They're like, what? You're not a cop, you're not a federal agent. What are you talking about going undercover and like being face to face with bad guys? Like, when does that come into play for a company that would be publicly traded? Like these private companies become public. When do they ever need to have investigative work for dealing with the scary people?

SPEAKER_01 38:44

Well, when somebody that they didn't do a background check on steals 50 million dollars from their business and they need to go find it. Uh, somebody's got to figure out how did it happen? That's me. And then they got to go figure out where did the money go? That's me. Then they got to find the person when they ran away, that's me. Then they got to figure out a way to get it back. That's me too.

SPEAKER_00 39:12

Oh, I guess I'll tell you what. If uh if you ever cross James, look out, he will find you. I'm not even joking. He knows how he knows how you cannot hide anywhere.

SPEAKER_01 39:23

Well, I'm getting older now and uh wiser, and we have got a great team around us at Ionasia, and uh a big part of what we do is going and finding people, uh skip tracing and asset tracing is a big part of our work, and and so the reason why I'm uh proselytizing for due diligence is we don't want that to happen. And and that's why I say it's a it's a feature of the abundance of going uh public that you're able to put some systems in place that make it less likely uh uh to uh suffer those uh types of losses.

Ch 12 — Closing Thoughts & How to Reach James

SPEAKER_00 39:57

That's huge. Okay. So if you are a private company looking at going public, then James and his team at iONASE should be on your list to talk to. Due diligence for your leadership when the time is right. James, is there anything final as uh kind of a closing word?

SPEAKER_01 40:18

I love talking to founders, I love talking to executive teams, and I'm happy just to uh answer any question about uh you know how I see an industry as risk or what I see out there in the marketplace and and offer advice. And it's great to have this chance to speak to your audience. Thank you, Chaz.

SPEAKER_00 40:37

Absolutely. Everybody again, my name is Chaz with Churchwell Insurance Agency. I'm your host of the D SPAC podcast. And James, thank you so much for being on today. It's a pleasure, brother. Always.