In this Sponsor Spotlight, we speak with Scott Moritz of Daylight Forensic & Advisory LLC. Scott is an Executive Director with Daylight Forensic in their New York Office where he leads the FCPA and Investigative Due Diligence practice. Previously, Scott held executive positions in the forensic practices at KPMG, PwC and served as an FBI Special Agent for nearly 10 years.
SD: What is the primary focus of your practice at Daylight?
Daylight Forensic & Advisory is a regulatory compliance, forensic accounting and investigative consulting firm providing services to top tier law firms, global corporations and government agencies. Daylight’s regulatory focus includes FCPA/anti-corruption, anti-money laundering, healthcare and securities regulatory. I lead the FCPA and Investigative Due Diligence practice. At the center of our FCPA practice is Bribery Risk Mitigation – the application of electronic risk assessments against Third Party descriptive and payment data to isolate those Third Parties that represent a disproportionate degree of corruption risk to the organization. Once isolated, we work with our clients to remediate their high risk relationships by performing international and domestic investigative due diligence. Our proprietary approach to mitigating Third Party risk is at the vanguard of the application of a risk-based approach.
SD: What trends are you seeing now in the world of corporate compliance and investigations?
Our business seems to mirror regulatory priorities and there’s been a significant shift in regulatory focus. We’ve seen a dramatic uptick in demand for both the investigation of financial crime committed by investment advisors and fund managers and the proactive investigation of existing and prospective money managers including on the part of government agencies and pension funds. We’ve also experienced enormous growth in demand for Bribery Risk Mitigation, investigations of suspected FCPA violations and FCPA advisory services. These services often touch upon Office of Foreign Assets Control and Export Controls compliance which also seem to be the focus of increased regulatory attention. In financial services, we’ve seen anti money laundering enforcement tail off giving ground to an increased emphasis on safety and soundness and credit risk.
SD: You have many years of experience with Foreign Corrupt Practices Act investigations. How has that area evolved during your career, and where do you see it headed?
Early in my private sector investigative career, international crimes I investigated in Argentina, Turkey, Indonesia, Philippines and Chile all had a demonstrable nexus to corrupt payments and/or embezzlement involving senior government officials but were not treated as FCPA violations. Instead, they were shrugged off as part of the business landscape, treated as financial crimes, litigated in civil suits and, if the corrupt public officials were even mentioned, they were certainly not the focal point. While each of these cases was potentially prosecutable under the FCPA, neither the clients nor the host countries had an appetite to pursue them as such and the only remedies were financial and pursued via civil means. This all started to change with the OECD Anti-Bribery Convention and was greatly accelerated with the passage of Sarbanes Oxley. C-Level accountability, increased emphasis on fraud controls and high profile prosecutions have caused a cultural shift in board rooms across the world. The most important factor that has contributed to the FCPA evolution is the increased emphasis on enforcement led by the DOJ Fraud Section, the SEC and the FBI. Stepped up U.S. enforcement coupled with prominent cases brought by the international anti corruption community has led to an unprecedented level of activity. FCPA enforcement and compliance is following a similar trajectory as money laundering enforcement took following the passage of the USA PATRIOT Act (which also played a significant role in bringing Politically Exposed Persons under scrutiny).
SD: How does your previous experience as an FBI Special Agent influence your work now at Daylight?
The international investigations I worked in my career included cases in Thailand, Korea, Australia, New Zealand, UK, Colombia, Italy, Canada, the Middle East and the Caribbean. I dealt directly with law enforcement agencies and investigative subjects in those countries and had to understand their legal systems. What stands out from that experience is the concept of “dual criminality.” In order to get cooperation from another country, I had to demonstrate that what I was investigating was also a crime in the country from which I was seeking information. Those experiences helped me understand that international investigations and compliance must strike a balance between local and U.S. law.
SD: What are some of the key lessons you have learned in conducting international investigations?
Understanding the cultural nuances of the countries in which you are conducting business is critically important. Investigative techniques like interpreting body language are not universal. Key to the effectiveness in conducting international investigations is teaming with the top tier investigators comprising our international strategic alliance network spanning nearly every country. Leveraging their local knowledge, language fluency and in-depth understanding of the business community and culture is invaluable. Equally important is finding investigative partners whose business practices are in strict adherence with U.S. standards of ethical conduct. And of course, it is essential to understand that public records in most parts of the world are neither as vast nor as reliable as those we take for granted here in the States. Instead, international investigations are far more dependent upon speaking to witnesses and confidential sources. In many countries, the success of an investigation comes down to who you know and what they can tell you.