An investment fund manager arrested last week as part of a police investigation into a possible multi-million pound money laundering scheme is a disqualified director who registered with the Financial Services Authority (FSA) after changing his name, according to reports.

Terence Sparks was disqualified as a director several years ago. That doesn’t mean you absolutely shouldn’t do business with the fellow, but you might want to know about his disqualification as part of any due diligence process for a high-profile position. But he was arrested whilst employed as Terry Freeman, having changed his name and the ease with which people can acquire new identities makes the identification of higher risk individuals a tougher challenge than it might otherwise be.*

Datanomic’s dn:Director for Screening solution can work with data from partners that specialise in tracking high-risk individuals and politically exposed persons. By using some clever web technology and employing risk investigators, they build and maintain categorised lists of individuals and companies that you would be better off avoiding (known money launders, drug traffickers and terrorists) and those with a history or position that you should be cognisant of (including disqualified directors). It’s then up to you to make an assessment of the potential risk for your organisation in engaging with the individual or company concerned.

Financial Services companies are required to have someone in the role of Money Laundering Reporting Officer (MLRO), who is responsible for monitoring risk and reporting concerns to the regulator. But the risk of doing business with someone that might cause damage to security, your finances or reputation, is not exclusive to the financial services industry. Neither does the risk lie exclusively with customers; as the case of Mr Sparks/Freeman demonstrates, Know Your Employees (and Know Your Supplier) may be as important as Know Your Customer.

*Datanomic’s dn:Director for Screening solution recognises name variants, such as Terry & Terence, Bill & William, etc. and can also match names across the Cyrillic and Roman alphabets, but it needs help to find people that are using alias names that are very different. This is where suppliers like World-Check and Dow Jones come in. They provide knowledge about individuals and companies that may constitute a heightened risk and they collect information about the identities that these people use. A single individual may have 2, 4, or 20 or more different identities with different names, addresses and dates of birth; but working with these intelligence lists dn:Director for Screening is able to identify and reduce the exposure to risk.