Take A Seasoned Professional's Advice: Never Act In Haste

Dean Bellone, founder and CEO of Cleveland-based CompSource, believes that was the case earlier this year when he contracted with Douglas' company, G2. G2 convinced Bellone not to commit to a $1 million-plus deal with a company claiming to have an IT contract in Iraq.

G2, which specializes in fraud and theft investigations, asset recovery, due diligence and other security issues, found, among other things, that the executive spearheading the deal with CompSource had a criminal history.

Douglas said Bellone, who had a number of face-to-face meetings with the executive, was lucky. The vast majority of the calls he gets are from victims that have already made a deal and been burned.

Douglas and other experts say there is no way to tell how much fraud is being committed against solution providers, particularly since many companies that have been stung are often too embarrassed to report it.

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"It's a mess out there," said Douglas. HIs advice? "You just can't act in haste. You have to stop and take a look. If it doesn't look or feel right, contact someone like us or decline the transaction. The action you take in haste without knowledge can be irreversible, and you are the one who suffers the loss."

That was the case with one solution provider executive, who did not want to be identified. The solution provider took a huge loss on a leasing deal in which the con artist manipulated bank and credit statements. The finance company approved the deal, but it was the solution provider that took the hit. "You take your lumps and move on," said the executive.

Douglas is currently involved in a fraud investigation involving a solution provider that was defrauded out of $1.2 million in computer equipment.

"The bad guys in this case are serial scammers," said Douglas. "They are extremely sophisticated professionals. It's a huge criminal enterprise. They are technically sophisticated and extremely well-funded. You put those things together with the intent to defraud people, and you have a winning proposition."