Posted by Matt Register

Bill Pellerin, President of Texas Investigative Network, talks about when a CEO may need to bring in some investigative help.

Please excuse any typos in this hasty transcript.


Matt Register: Welcome back to the show. Texas Business Radio, texasbusinessradio.com is the website. 844-814-8144 is our 24-hour call-in line. You get the calls in, we’re gonna get the experts on here to get those questions answered. I’m your host Matt Register. Jay Curry’s the one sitting over there in the co-host chair. We’re gonna talk about security. There are times as a business owner that you need a level of comfort that what somebody’s telling you is the truth. You get ready to hire a key employee, you get ready to buy a business, there are things you need to make sure that what you’ve been told is fact. And there are people out there that can … Professionals that can go track things down and make sure that what you’re being told is the truth.

We have Bill Pellerin, who’s the CEO of Texas Investigative Network here in the studio to tell us about it. Jay, what do you think man?

Jay Curry: I think everybody needs to put Bill’s contact information into their Rolodex so that they know. There’s gonna come a time and you’re gonna need to know how to get a hold of him, so.

Matt Register: No doubt. Bill Pellerin CEO of Texas Investigative Network. Bill welcome to the show sir.

Bill Pellerin: Matt, Jay, thank you glad to be here. Pleasure’s mine.

Matt Register: So, Texas Investigative Network, what do you do? Who do you do it to?

Bill Pellerin: Sure. We’re a licensed investigative agency. Typically, as far as doing it to, that’s usually the bad guys. We’d like to refer to it as who do we provide this service for?

Matt Register: Who do you do it for?

Bill Pellerin: Exactly, yeah. Who do we provide this service for? It’s a service that’s obviously necessary in due diligence matters. Sea level, obviously business owners, middle market companies who have either internal needs pressing concerning either employees, certain activities, monetary losses within the company that they need to get a handle on. That they need to address, bring it into and some cases help them assist with recovery. On the front end, companies today are being more and more proactive before entering into big deals, whether it’s a merger-acquisition, a high level hire, perhaps a deal that’s pending that they simply don’t know enough about that business entity or the profession it’s in and they needed somebody who can take an objective look and look thoroughly into the records, the data, the background. Anything that may contribute to information that would help them make a better decision.

Matt Register: Well, and there’s … We were talking during the break. There’s a lot of different reasons to do this. The main source of your business though is attorney’s with civil litigation though, right?

Bill Pellerin: That is true. Our steady work historically has been a legal profession and usually that’s your civil trial attorneys on the plaintiff or defense side. And typically there’s been a concern and our job is to come in, by one party or the other, and our job is to come and see has the adverse party disclosed everything properly. Is there something hidden that they did not disclose? Is there something more to the back story or something involved in this that led us to the point now where we’re in this contentious lawsuit that the other side is not disclosing? So the law firm would typically engage a third party expert, an investigative company, research, security, etc, to determine, okay, how can we put this puzzle together more accurately to guide our client in making the proper decision to settle or to challenge it and to take it further to trial if need be. So, historically yes, that’s where the majority of our work is.

Matt Register: Well, and another big part of your work and the one that probably pertains the most to our audience is that you’re ready to hire a key employee, a general manager, somebody that’s gonna come in, hire a CEO, hire a CFO, somebody that’s gonna have a significant impact on their business. Sometimes it’s worth doing a little research, right? And ensuring that what he’s telling you in that resume, what he’s telling you in that interview is in fact the truth, right?

Bill Pellerin: Absolutely. As you just mentioned, somebody that comes in at that level can have a significant impact in the business and especially if it’s somebody that comes in perhaps in a position of additional responsibility. And there’s a variety of records that can be checked. It is beyond, in other words, we have a motto, where Google stops that’s where we begin. There’s a variety of records and methodologies that can be done through investigation and research to determine are there any derogatory filings in this person or this entity’s background that might affect the way this person might make decisions in the future.

Matt Register: Well, and the same thing with the key employee, if you’re looking to acquire a business, there’s things beyond what you can research on Google that you need to understand as the new owner of the business. So, before it goes through during the due diligence process there are things you guys can do and information that you guys can find out that’s good decision making information on that, right?

Bill Pellerin: That’s correct. There’s a variety of different propriety databases or paper search information brokers that under specific circumstances investigators can have legal access to. Now, it’s more expensive. The law firms, insurance companies and corporations that hire us to do this know that we’re not just simply dialing up Google and seeing what’s out there. A lot of what’s online today, and don’t get me wrong most investigative firms will start with some good basic online sources, and that’s a good place to begin but they’re simply viable leads. They’re not necessarily factual yet until you get to the actual documentation.

Jay Curry: So, isn’t it true though that, I’ve heard that, when you Google something you gotta consider there’s a 50/50 chance of its really true or not. You may Google an article in the newspaper but some of the stuff that’s on the internet or put out by bad people, or people who wanna propagate inaccurate data.

Bill Pellerin: I would agree. That would be good advice. I would consider it unverified also until we actually take a deeper look at it.

Jay Curry: That’s why you’re around, right?

Bill Pellerin: That’s exactly right, yeah.

Matt Register: Well, on the same token when you buy a company its important to know what it is you’re buying but very often as an investment banker myself, very often when we sell a company we don’t necessarily sell 100% of it. We may sell 80% of it, right? And the previous owner will retain equity moving forward. At that point, you’re in essence getting married to these guys that are buying it. Then it becomes very important for you to understand who the buyer is, right? Well beyond what they’re will to necessarily tell ya or have available on their website, right?

Bill Pellerin: I would agree. In that case you might be walking into professional marriage and we may not know sincerely what the person’s true intent is. We may not know exactly what they’re background is, what they’re area of expertise in that specific profession is. Has there been anything derogatory filed with respect to this person’s personal profile or companies they’ve dealt with in the past, and so just to touch on a few of these specific what you’d consider red flag categories. We would look at, for example, would you be your bankruptcy, your lawsuits, your leans, your judgements, criminal history, any regulatory compliance issues at the state or federal level.

Matt Register: Sure.

Bill Pellerin: There’s a variety of things that we can put together, we can research, put together reports, submit to the client and get a pretty accurate profile to help them make a better decision. In most cases, what they’re gonna show you is what looks real good and that’s what’s in the P and O, what’s in the balance sheet, what’s on their website specifically.

Matt Register: Sure.

Bill Pellerin: And there may or may not be gaps in the bio or resume, which can be addressed as well.

Matt Register: No, interesting and I tell you what its something that really until we had that conversation in the break never really crossed my mind as something we should be doing as mergers and acquisitions professionals but certainly something we’re gonna be doing moving forward. When a business owner … Talk to me a little bit about when should a business owner pick up a phone and give you a call, right? What are the major identification patterns that he knows he needs professional help on this?

Bill Pellerin: Okay. Well, that would depend on three particular scenarios. First scenario would be on the front end. On the front end, we’re about to enter into a significant engagement or arrangement with a company, a third party, a partner or a high level hire. That’s when somebody would consider look, we’ve got to make the right hire. We’ve got to know as much as possible about this person. We can test them online all day long on a variety of things, they can test well on.

Matt Register: Sure.

Bill Pellerin: As far as psychological profiles, etc. But that doesn’t necessarily bring out how they may have responded to certain events in the past, if any of them have been handled poorly. While in the course of operating their business on a daily basis, if they’re monetary losses, if there are rumors or tips internally that things are going south in a particular division within the company or something hasn’t been handled right or somebody’s got an issue outside of work that affecting their job then it’s time to take a close look at that particular department or persons and see what’s going on that’s affecting their productivity or performance at the job.

Jay Curry: So, if there’s anything that smells awkward?

Matt Register: Any suspicion of fraud. All of that is something that you guys take a look at and can get to the bottom most of often, right?

Bill Pellerin: Absolutely. Our corporate concerns are typically companies that internally have discovered fraud, theft, embezzlement. Most cases its done internally. Its not uncommon though there’s a third party vendor or contractor complicit in this as well.

Matt Register: Yeah.

Bill Pellerin: A typical case may take two to three weeks to resolve. Some take months just depends on the complexity, the extent of it and how many people were involved. And then ultimately we like to ask the client, and this is on the front end, we’d ask, okay, what’s the best case scenario? If we’re able to determine specifically who’s involved, what the monetary losses are, and we get some admissions or confessions based on what they’re involvement is in this, what’s the end goal? Is it prosecution? Is it termination? Is it full recovery of the monetary losses to the company? If we address that all up front properly we can typically propose a sound investigative strategy for corporate losses.

Matt Register: Wonderful. Bill Pellerin, CEO of Texas Investigative Network, texasinvestigators.com is the website. Is that the easiest way of somebody getting in touch with you?

Bill Pellerin: Sure is. Right through the website.

Matt Register: Alright, absolutely fascinating stuff. Appreciate you coming on Bill.

Bill Pellerin: The pleasure’s mine. Thank you very much.

Jay Curry: Great story.

Matt Register: We do however have to take a break. We got to pay a couple of our own bills. We’re gonna be back right after the break with a whole lot more Texas Business Radio. Very interesting stuff. If you need an investigative work and I think there’s some scenarios where you will in your business. This is a good one, texasinvestigators.com. We’ll have a link right there from Texas Business Radio. We’ll be back.

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About the Author
Matt Register

Matt Register

In addition to hosting "Texas Business Radio," Matt is an investment banker and serial entrepreneur from Montgomery, Texas. He is the owner of RREA Media and Register Real Estate Advisors and a Managing Director and Principal at Corporate Finance Associates. He has a BS from the United States Military Academy at West Point and an MBA from Rice University in Houston. You can read more about Matt HERE.

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