Project Finance Lenders are primed to miss fraud because:

  • What one does not know, one is unlikely to look for, even with data hinting to fraud
  • What one is not looking for, one is unlikely to find, even with data hinting to fraud
  • A data point in isolation is meaningless and liable to be ignored, even data hinting to fraud
  • Prior involvement of banks and/or securities exchanges gives people comfort of no fraud
  • Lawyers’ involvement gives lenders comfort that the sponsor would not dare attempt fraud
  • Lender’s work breakdown and allocation make joining dots that could hint to fraud difficult
  • Juniors who often work on mundane tasks, have insufficient skills to identify fraud data
  • Lack of knowledge as to what is normal, makes it difficult to see anomaly that indicates fraud
  • Fraud is often not part of deal closing nor its assessment part of credit application for lenders
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The Warning Signs Were There

The Golden Peaks Capital alleged fraud has criminal implications for bank employees and Golden Peaks Capital employees.

If one does not understand project finance fraud vulnerability, the risk exists that one is a victim, witness or unwitting tool for perpetrators of the fraud.

Consequences of Missing Fraud Can be Dire

Consequences

One could find themselves being a witness for law enforcement & lenders seeking to recover their losses.


Consequences

A lender’s employee could find himself or herself being investigated, indicted, or convicted of failure to disclose money laundering or even worse, facilitating money laundering.