SCCE Podcast: Jeff Klink on Kickback Schemes and Due Diligence in Asia


Klink & Co. president and CEO Jeffrey M. Klink discusses the challenges of global compliances programs, especially those operating in Asia, in a new Society of Corporate Compliance and Ethics (SCCE) podcast with Adam Turteltaub.

“Employees are getting creative, which makes it very difficult to identify and investigate fraud and kickback schemes,” said Klink. “We are finding a new twist on the traditional kick-back scheme. Employees are creating fictitious paper companies to end up on both sides of the deal.” This type of scheme, said Klink, is plaguing large, global US and Western European manufactures operating in high-risk areas like Asia-Pacific and South America.

To reduce the number and types of fraud schemes, including kickback schemes, Klink recommends that compliance professionals consider doing more in high-risk geographies. “Regular data-base research and other traditional due diligence won’t help identify these types of issues,” says Klink. Klink warns about relying on database research only to mitigate against compliance failures in parts of Asia-Pacific and South America. Instead of performing database research only, Klink recommends performing site visits and boots-on-the-ground research in high-risk regions to prevent fraud and mitigate against Anti-Bribery risks. Finally, Klink warns that due diligence and monitoring needs to happen regularly – this is not a one-time check-the-box exercise.

Listen to the complete podcast.