Uncovering Corporate Espionage: A Tale of Deceit and Discovery
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GUEST BLOGGER
Anuj Choudhary
In the world of corporate espionage, uncovering the truth can be a daunting task. But when a global research firm approached us to investigate the simultaneous resignation of two key employees in the latter half of 2020, we knew we had our work cut out for us. The management suspected that the employees were leaving to join a competitor in the same region and requested an eDiscovery review to determine the truth.
Our initial approach involved preparing keywords and keyword strings based on their job profiles, the competitor's name and other relevant information. However, after a week of sleepless nights, we were still no closer to uncovering any leads. Frustrated and exhausted, we decided to change our approach.
We shifted our traditional approach and focused on two new approaches: targeting all files created, modified and shared on personal IDs during the six months prior to the resignation date, and performing one-to-one email communications between the custodians and their direct reports. This change in strategy yielded our first lead when we discovered that certain proprietary documents were being moved to the personal email IDs of the custodians and their family members. Our second lead came from analysing the bank statements of the custodians, which had hits of customer names of our client.
However, our third lead was the most surprising of all. We identified some documents moving between the custodians and their direct reports that had the logo of another company. Upon further investigation, we discovered that the company was actually in the public domain. One of the reviewers initially marked the document as not relevant, but we took a closer look and found that the company was registered in a city within the same region as the custodians.
Digging deeper, we found that one of the directors of the company was the daughter of one of the custodians, and the other director was the spouse of the other custodian. Both custodians held 50% of the shares in the company, according to the company registry records. We interviewed employees who received those documents and found out that they were pressured to work on the documents, even though they thought they were complete.
During our interview with the custodians, they admitted to operating a parallel business while working for our client. When their revenue from the parallel business exceeded their current pay from our client, they planned to resign. Not only that, but they took company data so that they could use it for their own company. They were even receiving money from clients as part of the services provided by their parallel business, which was initially started by means of a proprietor firm; later on, the business was converted into private company.
Armed with this evidence, the company initiated a lawsuit against the two custodians for the recovery of costs and profits from their parallel entity, as well as for the harassment of junior employees on their team. Our investigation had uncovered a case of corporate espionage, deceit and betrayal.
Our learnings from this case:
Keyword and string searches may not always be effective in eDiscovery investigations.
One-to-one email communications can provide valuable insights in identifying leads.
Bank statements and personal email IDs can reveal important information in such investigations.
Google searches can help in identifying relevant information from documents.
Operating a parallel business while working for an employer can lead to serious legal and ethical consequences.
Bio about Anuj Choudhary
Anuj is an experienced forensic consultant with 6 years of cumulative experience in the forensics and risk space, having worked on high-profile and complex projects for a diverse range of clients. He possesses exceptional leadership skills and has previously served as a Manager in a Big 4 Forensics Practice. With expertise in forensic investigations, claim computation, dispute support, ethics, integrity due diligence, pre-deal assessments, and big data analytics, Anuj has demonstrated his ability to deliver successful projects for law firms and their clients. He is also recognized for his diverse skill set, including the successful implementation of large-scale tech projects and providing training and education on various topics to corporates, regulators and within the teams. Anuj is a qualified Chartered Accountant and holds several certifications, including CISA (ISACA), CISM (ISACA), and Forensic Accounting and Fraud Examination (West Virginia University), among others. Anuj is also an associate member of ACFE with membership number 972631