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Kroll Inc.

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Kroll
Company typeSubsidiary
IndustryCorporate Investigation
Risk Consulting
Founded1972; 52 years ago (1972)
FounderJules Kroll
Headquarters
New York City
,
United States
Number of locations
52
Key people
Noah Gottdiener
Chief Executive Officer, Duff & Phelps
Jacob Silverman
President, Duff & Phelps
Carl Jenkins
Governance, Risk, Investigations & Disputes Leader[1]
Revenue$1 billion (2007) [2]
Number of employees
2,800
ParentDuff & Phelps
Websitewww.kroll.com

Kroll is a corporate investigations and risk consulting firm based in New York City.[3] It was established in 1972.

History

Kroll was founded in 1972 by Jules Kroll as a consultant to corporate purchasing departments.[4] The company focused on helping clients improve operations by uncovering kickbacks, fraud or other forms of corruption.[citation needed]

Kroll began its line of investigative work in the financial sector in the 1980s, when corporations in New York City approached Kroll to profile investors, suitors and takeover targets, with special attention to any perceived connections to disreputable organizations, suspicious business practices, personality and integrity issues, or any kind of corporate malfeasance. In the 1990s, Kroll expanded into forensic accounting, background screening, drug testing, electronic data recovery and market intelligence.[citation needed]

In June 1993, A.I.G. "became one of the largest investors in Kroll, after it retained a minority interest in the firm."[5]

In 1997, with annual revenues of approximately $60 million, Kroll merged with vehicle armoring company O'Gara-Hess & Eisenhardt. The new entity, The Kroll-O'Gara Company, became a public company listed on NASDAQ as "KROG."[citation needed]

In December 1998, Kroll acquired Schiff & Associates, Inc., a small security engineering and consulting firm based in Bastrop, Texas just outside Austin. The name was changed to Kroll Schiff & Associates then Kroll Security Services Group and finally to Kroll Security Group.[citation needed]

In February 2001, Kroll expanded its working relationship with the insurance company, A.I.G., offering through their Private Client group personal security services to high-net-worth individuals and their families. "Under its working arrangement with AIG, Kroll is called in to supervise crisis management when an incident occurs. In its expanded role the company will now provide those services to private individual holders of AIG policies, providing global protection, for which there is an ever increasing need."[6]

In August 2001, the O’Gara vehicle armoring businesses were sold to Armor Holdings. The company name was changed to Kroll Inc. and its ticker symbol became "KROL." Kroll ended the year with more than $200 million in annual revenues.[citation needed]

In 2002, Kroll acquired Kelly McCann's firm Crucible. In September 2008, Crucible was acquired by its management and now operates privately.[citation needed] Earlier in 2002, "Kroll’s US corporate advisory subsidiary was given the monumental challenge of restructuring Enron."[7]

In July 2004, Kroll was acquired by professional services firm Marsh & McLennan Companies in a $1.9 billion transaction.[8] Over the next few years, Kroll began selling off subsidiaries in order to focus on its core business lines.[citation needed]

In June 2008, Jules Kroll left Kroll, Inc. He tried to buy Kroll Inc. back from MMC. When that bid failed, he launched in 2010 Kroll Bond Rating Agency (KBRA) and K2 Global Consulting with his son Jeremy.[9] Jules and Jeremy Kroll created K2 Intelligence in 2009.[10]

In August 2010, Kroll was acquired by Altegrity, Inc. in an all-cash transaction valued at $1.13 billion. Altegrity's family of companies also included USIS and Explore. It is principally owned by Providence Equity Partners.[11] Altegrity declared bankruptcy in 2015.[citation needed]

Kroll was bought by Corporate Risk Holdings, LLC,[12] which is also the parent company of two separately managed information service businesses: HireRight and Kroll Ontrack.[citation needed]

On October 21, 2016, Carlyle Group-owned LDiscovery acquired Kroll Ontrack in an all cash transaction valued at roughly $410 million,[13] from which time Kroll Ontrack operated as a separate company.[citation needed] In 2018, Kroll Inc. acquired the controversial cybersecurity firm Tiversa.

On March 13, 2018, it was reported that Duff & Phelps Corp. would buy Kroll, Inc.[14] On June 4, 2018, the transaction was completed.[1]

Geographic locations

Kroll is headquartered in New York City, and has offices in Chicago, Philadelphia, Los Angeles, Eden Prairie, Nashville, San Francisco, Dallas, Miami, Loveland and Washington, D.C., as well as Toronto, Ontario, Canada. The Miami office serves as the headquarters for Kroll's operations in Latin America, where it also has offices in Argentina, Brazil, Colombia and Mexico.

Kroll's London office serves as headquarters for the Europe, Middle East & Africa region (EMEA), which also has offices in Madrid, Barcelona, Paris and Milan. Their office in Dubai provides risk consultancy services to the Gulf area.

Kroll's Asian operations are carried out by offices in Hong Kong, Shanghai, Mumbai, Beijing, Singapore and Tokyo.

Range of operations

The following are core Kroll activities:

Ontrack and electronic data recovery

Kroll acquired a computer forensics, electronic discovery, and data recovery company named Ontrack. On January 31, 2006 Kroll Ontrack Inc. announced that it has completed the acquisition of Ibas Holdings ASA, a Norwegian-based provider of data recovery, data erasure and computer forensics services. Ibas became a wholly owned subsidiary of Kroll Ontrack AS, a newly formed Norwegian entity. Prior to its acquisition by Kroll Ontrack Inc., Ibas had expanded its own geographic reach and service offerings through its acquisition of Vogon International, a privately held U.K. company specializing in computer forensics, electronic discovery, and data recovery.[15]

In October 2016, Kroll sold the Kroll Ontrack business to LDiscovery LLC.[16] forming KrolLDiscovery,[17] which now operates independently of Kroll.

Background screening

Kroll's Background Screening division provides screening services for areas such as employment, supplier selection, investment placement and institutional admissions. Kroll's Background Screening division also includes the Kroll Fraud Solutions unit, which specializes in identity theft protection and identity restoration services.[18]

Security consulting

Kroll offers consulting services through Kroll Security Group, its Security Consulting and Security Engineering & Design division. These services include threat assessments, vulnerability assessments, physical security surveys, security disaster planning, policy and procedure development, staffing studies, etc.

Historical cases

The Heroin Trail case

In 1987, in the prominent First Amendment case over The Heroin Trail stories in New York Newsday, attorney Floyd Abrams enlisted Kroll's help to find an eyewitness: "But was it conceivable that we could come up with an eyewitness who could be of help? I called Jules Kroll, the CEO of Kroll Associates, the nation's most acclaimed investigative firm, to ask him if he could inquire, through the extensive range of former law enforcement officials employed by him, whether Karaduman was known to be a drug trafficker in Istanbul."[19] Kroll came through: two weeks into the trial the firm produced Faraculah Arras, who was prepared to testify he was involved in one of Karaduman's drug deals. "I was stunned," recalled Abrams.

Abrams used Kroll again in 1998 to investigate claims by CNN's Newsstand documentary that sarin nerve gas had been used in Vietnam in 1970 as part of Operation Tailwind.[20]

The John Fredriksen oil theft case

Kroll assisted in the trial of Norwegian shipping tycoon, John Fredriksen, at the end of the 1980s.

WTC and Sears Tower security

Kroll were responsible for revamping security at the World Trade Center after the 1993 World Trade Center bombing.[21][22] They also took on responsibility for security at Chicago's Sears Tower following the September 11, 2001 attacks.[23] Just prior to the September 11 attacks, Kroll Inc., with the guidance of Jerome Hauer, at the time the Managing director of their Crisis and Consulting Management Group,[12] hired former FBI special investigator John P. O'Neill,[24] who specialized in the Al-Qaeda network held responsible for the 1993 bombing, to head the security at the WTC complex. O'Neill died in the attacks.

Capital outflows from the Soviet Union and Russia

In March 1992, the Yeltsin government contracted Kroll Associates to track down and find very large sums of money that had been removed from the Soviet Union prior to the August 1991 putsch on the Russian White House.[25][26] In 1992, First Deputy Prime Minister Yegor Timurovich Gaidar said, "Last year saw large-scale privatization by the nomenklatura, privatization by officials for their own personal benefit."[27] Gaidar called the Communists and KGB officials criminals and that a "a vigorous search" for the money trails from state-owned capital had flowed abroad virtually unchecked before the collapse of the Soviet Union in the summer of 1991.[26] On March 15, 1992, the Russian government froze all capital outflows from Russia.[26] In April 1992, Kroll Associates began their investigations with Joseph Serio heading the Kroll Associates efforts in Moscow.[28][a] Also, Joseph Rosetti, the vice chairman of Kroll Associates, was in Moscow to assist.[26] The Kroll Associates determined that more than $14 billion in 1991 real dollars had been transferred from Switzerland to New York prior to the August 1991 putsch.[27] Also, the Communist Party of the former Soviet Union along with other government agencies, such as the KGB, had transferred more than $40 billion in 2014 real dollars out of the country.[30][b] The assets of the Vneshekonombank were frozen during the investigation.[27] However, numerous transactions occurred to bypass the capital flow restrictions often with the British Barclays Bank in Cyprus acting a money laundering center for public officials from Saint Petersburg and Moscow.[27][c] According to Valery Makharadze, the government's chief inspector, many joint stock companies were formed to provide an illegal means for capital outflows from Russia, such as the Leningrad Association of Joint Ventures[d] and KOLO.[32][27][e] Numerous officials became wealthy Russian oligarchs including numerous former KGB officials, prominent Communists such as Oleg Belyakov and other former Communists who headed the party Central Committee department that dealt with the defense industry, as well as Leonid Kravchenko, who was the former head of the state television and radio company.[27] Jules Kroll, the head of the Kroll Associates, uncovered hundreds of illicit transactions with massive capital outflows.[33] This outflow of capital from the Soviet Union and Russia directly contributed to severe economic conditions in Russia during Boris Yeltsin's second term, leading to its collapse, and resulting in the age of Vladimir Putin as the President of Russia.[25]

Identity protection

Kroll entered into a joint marketing agreement with legal service plan provider LegalShield (formerly Pre-Paid Legal Services, Inc.) in 2003, to distribute an identity theft product to consumers, called the Identity Theft Shield, the first time Kroll offered a service to individuals.[34] As of June 30, 2006, Kroll had over 560,000 customers, according to LegalShield's quarterly report.[35] In addition to the LegalShield subscribers, Kroll's Identity Theft Shield serves about 500,000 other consumers.

See also

Notes

  1. ^ From 1990-1, Joseph Serio, an American, worked with the Soviet Interior Ministry as an American liaison.[29]
  2. ^ Other estimates show that the KGB had removed $50 billion in 1992 real dollars.[26]
  3. ^ Vladimir Putin was in charge of the Committee for Foreign Liaison, (Template:Lang-ru), the Committee for Foreign Economic Relations, or the Committee for External Relations during this period. Later, he was the advisor to Anatoly Sobchak until June 1991 while Sobchak headed the Leningrad City Council from May 1990 to June 1991. After Sobchak became the Mayor of Saint Petersburg, Putin became Sobchak's first deputy and later Sobchak's first deputy mayor. By 1990, Sobchak was reviled by the KGB for his uncovering of numerous irregularities and illegal actions by the KGB and former KGB officials.[31]
  4. ^ The Leningrad Association of Joint Ventures was formed in 1990 and had two joint ventures with Germany, one with the United States, and one with Finland (FILCO).[32]
  5. ^ KOLO removed part of the assets of six defense and space complex firms.[27]

References

  1. ^ a b "Duff & Phelps Announces New Business Unit After Completing Kroll Acquisition".
  2. ^ "Revenue." Marsh & McLennan Companies, Inc., February 12, 2008. "MMC Reports Fourth Quarter 2007 Results."
  3. ^ "Office Locations Archived 2011-08-10 at the Wayback Machine." Kroll Inc. Retrieved on 14 August 2011. "Kroll Corporate Headquarters 600 Third Avenue New York, New York 10016 United States"
  4. ^ "Background." The New Yorker, 19 October 2009. "Jules Kroll and the world of corporate intelligence."
  5. ^ Eichenwald, Kurt (29 December 1993). "Prudential and A.I.G. In Dispute". New York Times.
  6. ^ "AIG offers Kroll Personal Security Services to Private Clients". Insurance Journal. 6 February 2001.
  7. ^ "Profile: Simon Freakley, CEO of restructuring specialist Kroll". Accountancy Age. Oct 25, 2007.
  8. ^ Pilla, David. "Marsh acquires Kroll in $1.9 billion cash deal", Best's Review, July 1, 2004, accessed January 28, 2011.
  9. ^ New York Times profile on Jules Kroll
  10. ^ "Archived copy". Archived from the original on 2013-09-24. Retrieved 2013-10-20.{{cite web}}: CS1 maint: archived copy as title (link)
  11. ^ Eder, Steve. Davies, Megan. Providence to acquire MMC's Kroll in $1.13 billion deal, Reuters, June 7, 2010, accessed January 28, 2011.
  12. ^ a b "Profile: Jerome Hauer". Forbes.
  13. ^ https://www.krollontrack.com/resources/press/details/64971/ldiscovery-to-acquire-kroll-ontrack/
  14. ^ Banerji, Gunjan (March 13, 2018). "Duff & Phelps to Buy Corporate-Investigations Firm Kroll". The Wall Street Journal. The New York Times, New York City, United States. Retrieved March 17, 2018.
  15. ^ (Press Release) "Kroll Ontrack Data Recovery." The Data Chain, 12 March 2012. "Kroll Ontrack recovers more than 103 petabytes of data over the past 25 years"
  16. ^ "LDiscovery Completes Acquisition of Kroll Ontrack". Kroll Ontrack. Retrieved 19 July 2017.
  17. ^ "LDiscovery and Kroll Ontrack launch new KrolLDiscovery brand and Kroll Ontrack logo". Kroll Ontrack. Retrieved 19 July 2017.
  18. ^ (Press Release) "Identity Theft Restoration." Canada News Wire, 12 July 2007. "Identity Theft Restoration"
  19. ^ Abrams, Floyd (2005). Speaking Freely: Trials of the First Amendment. Viking Press. pp. 124–137. ISBN 0-670-03375-8.
  20. ^ Robin Pogrenbin and Felicity Barringer (July 3, 1998). "CNN Retracts Report That U.S. Used Nerve Gas". The New York Times.
  21. ^ Douglas Frantz (September 1, 1994). "A Midlife Crisis at Kroll Associates". The New York Times.
  22. ^ Carey, Carol (1 July 1997). "World Trade Center". Access Control and Security Systems Magazine.
  23. ^ "About Us > History > Notable Cases". kroll.com. Archived from the original on 2007-01-06. Retrieved 2008-02-15.
  24. ^ Kolker, Robert (17 December 2001). "O'Neill Versus Osama". New York.
  25. ^ a b Dawisha, Karen (2014). Putin's Kleptocracy: Who Owns Russia?. Simon & Schuster. p. 18. ISBN 978-1-4767-9519-5.
  26. ^ a b c d e Bohlen, Celestine (March 3, 1992). "U.S. Company to Help Russia Track Billions". The New York Times. Retrieved April 30, 2018.
  27. ^ a b c d e f g Sneider, Daniel (March 4, 1992). "Russia Goes After 'Party Gold': Money Communist officials allegedly shifted out of the country is called crucial to reform". Christian Science Monitor. Retrieved April 30, 2018.
  28. ^ Dawisha p. 19
  29. ^ Dawish p. 19
  30. ^ Dawisha p. 18
  31. ^ Dawisha p. 55, 88
  32. ^ a b Dawisha p. 65
  33. ^ Tikhomirov, Vladimir (1997). "Capital Flight from Post-Soviet Russia". Europe-Asia Studies. 49 (4): 592.
  34. ^ "Pre-Paid Legal Services To Add Identity Theft Benefits Provided By Kroll Background America". 2003. Retrieved 2008-04-03.
  35. ^ "Commission File Number: 001-09293, PRE-PAID LEGAL SERVICES, INC". United States Securities and Exchange Commission. 2006. Archived from the original on 2007-09-29. Retrieved 2007-07-04.
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