Managing Fraud Risk: A Practical Guide for Directors and Managers

People Disappear in Texas

I am sitting in my room at the Embassy Suites Hotel in San Antonio, Texas. It is a Thursday evening in July 1998. I am coming to the end of a telephone call with a corporate lawyer in Washington, giving her a progress report on my assignment. I am in the US working for a UK FTSE 100 company that had bought an American group a couple of years previously. Following changes in the board and the senior management team in the UK, I have been asked to review the activities of one of the American group's subsidiary companies that operates primarily in Texas but also all along the Mexican border through a series of retail outlets. This company had been a family-owned business in the past, with a reputation for being both profitable and also aggressive risk-takers. I am tasked with reporting back to the UK board at the end of the assignment.

I have been talking to the American lawyer for about 20 minutes now, updating her on progress. I tell her that the assignment is going well overall and that I am receiving most of the assistance that I need from the managers and staff. However, I do have concerns. It is already clear to me that the company is still dominated by the founding family and, from everything that I have heard, the family remain a powerful force all along the border. I say to the lawyer that it seems to me to be operating as a separate fiefdom, with little regard for its UK parent company. I mention my unease at some of the activities that are going ...