Risk management a booming business

TOKYO —

One thing we can say about Jack Byrd’s business: There is never a dull moment. As managing partner of 360 Risk Management Group Ltd, Byrd handles risk management investigations and security consulting projects.

Established last June, 360 RMG has its headquarters in Hong Kong and offices in Tokyo, London and Los Angeles. Its investigators include former government intelligence professionals, forensic accountants, lawyers and security specialists.

Originally from California, Byrd has spent more than 20 years in risk management and conducting international investigations, including a stint with Kroll. He has been involved in operations that included tracing down the assets of former Iraqi President Saddam Hussein and members of his regime; seizing assets of failed Savings & Loans and uncovering assets of corrupt high net-worth individuals. Following the terror attack on Mumbai, Byrd helped provide security consultation services to financial institutions, hospitals and schools.

Japan Today editor Chris Betros meets Byrd to hear more about 360 RMG.

How has business been since the company got started last June?

We are really busy, going full speed right now.

Why are you based in Tokyo and not Hong Kong?

I can do more good here right now. More of our work is coming out of Hong Kong. For example, law firms and banks in Hong Kong are coming to us because we have offices here. I also have quite a big network in California and we are building a bridge between California and Japan. The footprint we have now is sufficient to do a lot of work in a lot of different parts of the world.

How is 360 RMG different from its competitors?

We are partner-owned and don’t have any shareholders to answer to. When you come to us, you are speaking to the people who do the actual investigating. We are a lean organization.

What is your main service?

Risk management, although I would prefer we do risk mitigation but it is hard to convince clients of the need for that. Selling prevention is very difficult to do. What clients are really interested in is making a problem go away after they have encountered it. Once the crisis hits, they call us.

Can you give us an example of a case you worked on recently?

One investigation that involved our Hong Kong, Tokyo and London offices concerned a banker who left one multinational bank where he had been doing inappropriate activities with a client’s account. He went to another multinational bank where he immediately started doing the same thing. After a few years, it emerged that multiple clients have become a victim of this person. His legitimate earnings were in excess of $4 million last year. He had created fraudulent accounts where he had funneled his clients’ money. He would create fictitious bank statements and send them to the client. He had protected himself by making change of addresses for all those clients who were getting no real documents from the bank. They were all going to him.

He has not yet been arrested, so we have been retained to locate him and return the money to the bank’s client. I know roughly where he is. My client has no benefit from having him arrested at this point, so I have a little bit of leverage. It helps if he cooperates. The police are not going to do this kind of international investigation, so we are building a case that we can hand over to the lawyers, and to police to apprehend him. Even if they arrest him, that doesn’t mean our clients will get their money back.

I can tell you 10 stories that are similar. It’s all about greed and greed is not in short supply. The time-consuming part is tracking down the individual. We knew that he had visited different countries in Europe and Asia. I have pinpointed his location and he probably knows that he is backed up against a wall.

With clients, do you deal at the CEO level?

Sometimes. Most of the times we are retained through law firms, depending on the nature of the case. However, under U.S. law, CEOs are responsible for their companies’ activities outside the United States. If your company officials are paying bribes to get business deals in foreign companies, you can be held criminally liable. The same holds true if you’re investing into companies with dubious connections. If a company has a 300% ROI (return on investment), that looks really good. It’s tempting to any investor, but the problem is how are they getting that return? Is it legal? As a CEO, you are responsible to make sure your people are investing in legitimate businesses.

Does 360 RMG do much due diligence?

Yes. There are two kinds. There is pre-investment due diligence where the client wants to find out if a company they are getting involved with has any relationship with anti-social elements and to what extent and at what level the relationship is.

On the M&A side, clients want to know if they are getting into a relationship with some bad people who have a lot of money. We are tasked with trying to understand who these companies are, who is behind them, where did their money come from, what is their reputation on the street. These things don’t show up on the P&L or balance sheet.

What about computer forensics?

That has become a big part of our business. To investigate fraud cases, we need to do the forensics. We have the capabilities and have a lab where we can image hard drives and do local language forensics. If a client list is going out the door with a prototype, we can come in after work and pull the hard drives out and analyze them back in the lab.

Generally, what do you think of the level of security at Japanese companies?

Many Japanese companies are lax when it comes to security and prevention measures in general. A lot of Japanese executives think it is still an honest society. They are risk averse and don’t acknowledge a risk exists there. All the cases I am working on now involve Japanese nationals who have gone wrong. There is a bit of naivity.

That’s why educating clients is a huge part of our business. Right now we are very busy reacting to clients who have encountered a problem. But as I said before, we want to prevent this from happening again. So slowly, Japanese clients are becoming receptive to our mitigation strategies.

How do you market your company?

We don’t advertise. About 80% of our clients are repeat clients who come to us by word of mouth and through my past relationships. Occasionally, I speak at conventions and do media interviews.

How much of the information that you seek is actually out there on the Internet?

There can be quite a bit, if you know where to look. Nothing is secure, especially emails and phone records.

Do you get involved in following unfaithful spouses and cases like that?

Normally, we don’t. However, if you’re a good client and you ask for a favor, we will probably extend that favor. But we are not investigators who follow people around and duck behind doorways. We are a higher level than that. You don’t need to pay our high fees to do that.

How long do investigations take?

They generally don’t last beyond 3-4 weeks.

Are you hands on with all the cases your team works on?

Yes, although I don’t have an expertise in all areas. So I tend to manage investigations from a high level.

Do you plan to hire more investigators?

Eventually, we will have to hire more people, but we are not afraid to say no to extra work. I’d prefer that we take care of the clients we have right now.

What sort of a person makes a good investigator?

Someone who asks the right questions and has a keen mind.

When people meet you for the first time, how do they react when they find out your line of work?

When I used to work for Kroll, some would be afraid to speak to me. 360 Risk Management doesn’t have the same effect, since we are still fairly new.

What is a typical day for you?

I start at 5 a.m. with a call to the LA office. I often train for triathlons from 6 to 8. After that, I check emails and then the rest of the day depends on what projects we have and where the investigation is taking place. We try to have weekly meetings to share information, contacts and resources. We travel a lot but are very connected as well. I work on weekends and nights, too.

What is the most satisfying aspect of the job?

When we succeed is returning money to a client who has been embezzled, especially if it is an elderly person.

For more information, visit http://360rmg.com

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