Daniel Nardello (NYLJ/Rick Kopstein)
Forget the image you may have of the hard-boiled private investigator waiting in a seedy office for clients to show up.
Daniel Nardello, 57, is the chief executive officer of Nardello & Co., an independent investigative firm that opened in 2003. He is a graduate of New York University School of Law and a former assistant U.S. attorney in the Southern District.
The firm has about 40 full-time investigators based in New York, London, Washington, Milan, Hong Kong and Dubai. According to its website, it has handled work for law firms, financial institutions and funds, corporations, family offices and high-net-worth individuals, municipalities and governments.
“All too often,” the answers those clients need “lie below the surface,” the company says.
For its litigation support practice, for example, Nardello & Co. analyzes information and data “to realize its evidentiary potential” either to support the client’s position or for leverage against its opposition; identifies and interviews potential witnesses; traces and locates assets, and analyzes computer data.
In one case cited on the company’s website, Nardello was called in by a law firm worried by threats made by a former intern angry he didn’t get a job. After profiling the former intern, Nardello determined he posed no physical threat, but the firm still beefed up its security.
In another case, Nardello confirmed allegations that the principal of a company being considered for acquisition by a law firm’s client had links to individuals with “significant criminal histories.” The deal was dropped.
Nardello also was hired by the lawyers of a “prominent financial figure” who had received “unusual” envelopes in the mail. It found no toxic substances and identified the sender.
Q: What was the appeal of running an investigative firm?
A: One of the things I always enjoyed when I was a practicing lawyer and as an assistant U.S. attorney was getting to the facts. This job is centered on fact finding, albeit typically within the framework of some legal theory, so my legal training remains highly relevant. I also liked the idea of building something and the freedom to set values for the firm I wanted to build.
Q: What qualities are necessary to be a good investigator?
A: I’ve learned over the years that there is no one perfect model for the ideal investigator. Our investigators have very diverse backgrounds—they include former big firm lawyers, federal prosecutors, investigative journalists, high-level law enforcement officials and forensic accountants—but I think they share certain key traits. To be a good investigator, you need to have a real instinct and drive for getting to the bottom of things. You need to be tenacious, smart, creative and disciplined. To do this job right, you need to be focused on putting seemingly random pieces of information together and creating a full picture, instead of just dumping data on the client.
Q: Do lawyers make good investigators?
A: It depends on what kind of lawyer you are. The mindset is as important as the skill set. If the lawyer is someone who gets pleasure from pursuing facts and finding answers, is creative, methodical and is not rigidly wedded to one way of thinking, then he or she would make a great investigator. We have several lawyers at our firm and they are all terrific investigators, partly because they spent a large part of their legal careers doing investigations and enjoyed it.
Q: What do you look for in hiring investigators?
A: We look for people who are intellectually curious, have unimpeachable ethics and communicate well, both verbally and in their written work. Because we work all over the world, including in Asia, Latin America, Africa, the Middle East, as well as North America, we need people who are sophisticated and culturally savvy. We also want people who are good colleagues and client-oriented.
Q: Do your personnel have anything in common with the traditional images of gumshoes like Sam Spade and Phillip Marlowe?
A: Fortunately or unfortunately, we spend more time behind our desks tracing documents, doing research and making serial phone calls than in bars and back alleys. Those fictional gumshoe characters have little to do with modern investigative work. However, I will concede that some of us do wear trench coats.
Q: Is it a tough job?
A: It can be as tough as it is rewarding. First, there isn’t a defined universe of information or set of answers so you don’t know if the next person you interview will be the key, or if it will be the obscure document you didn’t even know existed that breaks open the case. A great investigator always needs to focus on the client’s objectives, not on formulaic checklist. When working internationally, our accessibility to records varies greatly so an assignment that may be relatively straightforward in the U.S. may be much more difficult overseas. Further, we frequently deal with the difficult task of distinguishing rumor from fact, a task that in certain matters, such as white collar criminal defense cases, can make the difference between conviction and acquittal. That being said, I think most of our people would tell you that they don’t mind the pressure because they love what they do.
Q: What is the key to a successful investigation?
A: Getting clients exactly what they need. That usually comes down to understanding the client’s theory of a case and developing the evidence in an ethical way to support that theory. All too often we hear clients complain that their past experiences with investigative firms were less than positive because they simply had data dumped on them without any effort being made to synthesize the information that was gathered. You can come up with all sorts of information, but if it is not properly applied in presenting a complete portrait of the issue your client is contending with, it is not especially useful and in fact, can be counterproductive.
Q: What techniques do investigators use?
A: A lot of what we do is research-based—it spans sophisticated open-source research, witness interviews, discreet source inquiries, forensic accounting, computer forensic review, political risk analysis, asset tracing and surveillance, sometimes all at once!
Q: What about surveillance? Any concerns about violating people’s privacy?
A: Surveillance is certainly not the right tool for all cases. It’s a blunt investigative technique, it’s expensive and difficult to manage, and there is always the likelihood of the subject finding out. It’s appropriate where there is specific information that can only be obtained and documented through surveillance. Privacy is always something you need to be aware of, and there are strict rules about what constitutes an appropriate surveillance and what can violate someone’s privacy.
Q: Is the investigative industry booming?
A: The industry is definitely growing, and so are we. For example, aggressive Foreign Corrupt Practices Act enforcement and the increase in parallel investigations by multiple government agencies has led to greater understanding of the need to vet business agents and third parties. For us, the surge in white collar criminal prosecutions in business, finance and even academia has led to many engagements for defense counsel. We have also noticed an upward trend in pre-transaction due diligence, including work driven by M&A. Clients appreciate the value of due diligence at the outset instead of a blown deal—or worse, an enforcement proceeding—down the road. We also have seen our asset search practice grow significantly.
Q: Does your firm have a lot of competition? How do you distinguish your firm from the competition?
A: There are a lot of licensed investigators and an increasing number of private investigation firms. Having said that, there are few firms in our space—those that are truly multi-national and strictly focused on complex investigations. There are several players that are much bigger than us, including the Big Four accounting firms, that offer investigative services as one of dozens of separate practice areas. But our business is investigations, pure and simple.
Ultimately, we feel that our results, our professionalism and our bespoke approach to our work, distinctly separate our firm from others in the industry. We take great pains to make sure we are acting legally and ethically; our clients retain us to help solve their problems, not create new ones. We don’t believe in a “democracy of facts.” Not all facts are equal, and we work hard to tease out inferences, corroborate and synthesize our findings. We’re also independent; we have no investor shareholders or larger corporate ownership structure, so we answer only to our clients. We want long-term relationships with our clients, and the foundation of any such relationship is trust. Our clients trust us to deliver consistently high quality work product, stay on budget and deliver our findings on deadline.
Q: What are the most common tasks for which investigators are hired? When does a potential client really need an investigator?
A: On the transactional side, there is potentially a need for an investigator at almost any stage of the deal process. We’re engaged for everything from pre-transaction due diligence to hostile M&A work. On the litigation side, asset tracing is often a smart call before a case has formally begun. Once litigation has commenced, virtually everything in our tool kit may be helpful to the legal team depending on the case, from collecting electronic evidence, to locating witnesses, to conducting background investigations of the adversary’s witnesses to impeach their credibility. Clients hire us for a case when they need to know the facts, and that can take a lot of different forms.
Q: Do investigators work a lot with law firms? Don’t law firms do their own investigating?
A: Many of our engagements do come through law firms, but we also do a significant amount of work for financial institutions, hedge funds and private equity firms, as well as a substantial number of Fortune 500 and FTSE 100 companies, government agencies, and even private institutions and non-profits.
Law firms do their own investigating to some extent, but there are many types of investigations where our law firm clients recognize that we can provide a significant value. For example, researching their opponents’ key witnesses for impeachment. Law firms also hire us when they don’t want to risk disqualification. For example, if a law firm needs to interview third party witnesses, it’s often a lot cleaner for the firm, from a disqualification risk perspective, if we handle the interviews.
Q: Does your industry have a code of ethics? Are there lots of shady investigators out there?
A: Unfortunately, there is no disciplinary body like a state bar association and no agreed-upon ethical rules in our profession, aside from criminal and civil penalties that stem from a violation of licensing requirements.
There are definitely shady investigators out there, and you might be surprised to know that misconduct is not limited to small single practitioners but has also been a problem for some of the larger well-known firms. We pride ourselves on being attentive to legal and ethical rules and have developed a strong and popular CLE program on ethical consideration when retaining investigators to help educate our clients about best practices in the industry.
Q: Can you provide a few examples of particularly challenging investigations by your firm?
A: The nature of our business is that most of the work we do remains confidential, so it’s hard to cite specific cases. Speaking generally, all of the litigation support we do in white collar criminal cases is challenging because the stakes, our clients’ freedom and reputation, are so high. Further, deconstructing the government’s case and developing impeachment material on its witnesses requires creativity and the highest level of thoroughness. International asset searches can be daunting because the scope of work is potentially limitless and we often have to help our clients decide how much good money they should throw after bad. Our work in emerging markets like Mexico and the DRC present different challenges: negotiating around systemic corruption and ensuring the security of our people on the ground.
Q: Where do you see the industry heading?
A: The world is getting both smaller and more complex. The compliance and litigation risks facing companies are growing exponentially. Thus, more and more clients appreciate the need for private investigators as they move into risky jurisdictions like China or Russia, or navigate challenging new regulatory and enforcement landscapes. Companies are increasingly aware that when their money and integrity are on the line, they can’t take the risk of not performing due diligence. For those reasons I see continued growth and opportunity as well as increased competition. I’m confident that if we stick to our values and place our clients first, we’ll continue to succeed.