Kroll Inc.

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Founded:1972 as Kroll Associates
NAIC: 561611 Investigation Services; 514190 Other Information Services; 541219 Other Accounting Services; 541330 Engineering Services; 541614 Process, Physical Distribution, and Logistics Consulting Services; 541618 Other Management Consulting Services; 541620 Environmental Consulting Services; 541690 Other Scientific and Technical Consulting Services

Long considered one of the business world's best kept secrets, Kroll Inc. has been hired by multinational corporations and governments alike to investigate fraud, embezzlement, environmental compliance, even murder. Kroll's successes are world famous; they include finding millions that former president Ferdinand Marcos stole from the Philippines; tracking billions skimmed from Iraqi oil profits by Saddam Hussein; and breaking the Gambino crime family's stranglehold on the Long Island trucking industry. With former agents, police officers, prosecutors, and licensed detectives making up its ranks, Kroll has the manpower and the resources to take on even the most complicated cases.

Jules B. Kroll was born in 1941 in Brooklyn, New York. His father owned a printing company and his mother was a homemaker. Young Jules did well in school, attended Cornell University where he earned a bachelor's degree in 1963, then went on to Georgetown University Law School. He received his law degree from Georgetown in 1966, took the New York bar exam, and worked as an assistant district attorney in Manhattan. Kroll's experiences in the D.A.'s office included prosecuting a wide range of crimes and working with up and coming politicians including Robert F. Kennedy. After a few years, however, Jules branched out on his own and founded Kroll Associates in 1972.

Kroll started off small but ended up consulting for some of New York City's largest and most powerful corporate entities. Kroll's first customer was Curtis Publishing Company, which was renamed Cadence Industries after a merger. Because of his knowledge of printing and publishing (from his father's company), Jules Kroll was hired to assist the company's purchasing department, reviewing costs and cutting waste. By 1974 Kroll took on his first white collar investigation, which had become an increasing problem in the inflationary and Watergate-tinged 1970s.

By the dawn of the 1980s Kroll Associates had proven itself adept at investigation and there was no shortage of clients as merger mania swept Wall Street and the investment world. The Kroll name became a trusted ally to many of the era's biggest newsmakers by ferreting out financial irregularities and doing so quickly and discreetly. As the firm's reputation grew, Kroll assembled an extensive network of former agents from the FBI, CIA, Mossad, and MI-5; police officers; attorneys and prosecutors; auditors and accountants; licensed private detectives; and computer experts.

Kroll was definitely on a roll when the firm was hired by the Foreign Affairs Committee of the U.S. House of Representatives in 1985 to confirm reports Philippines President Ferdinand Marcos and his shoe-crazed wife Imelda had embezzled upwards of $200 million. A similar request came the following year, in 1986, from the Haitian government after dictator Jean-Claude "Baby Doc" Duvalier fled the country with millions taken from the poverty-stricken country's treasury. In both cases, Kroll found the goods; the Marcoses owned pricey real estate in New York and elsewhere while Duvalier and his wife Michele had sizeable bank accounts in New York, London, Paris, Geneva, and elsewhere.

Kroll's ability to sniff out caches and cash led to international renown and further high profile clients. In the late 1980s the firm was on the opposite side of the fence, hired by the Reichmann family, who were under attack for allegedly collaborating with the Nazis during World War II. Instead of finding proof of wrongdoing, Kroll was able to exonerate the Reichmanns, who had not helped, but rather hindered, the Nazis in their zealous pursuit of Jews. Around the time the Reichmann case was resolved, Kroll opened another controversial investigation: New York City's Covenant House, rocked by accusations of sexual misconduct and financial irregularities. Coming under Kroll's scrutiny in 1990, charges were corroborated against Covenant's founder Father Bruce Ritter, who had been removed from his duties.

Iraqi strongman Saddam Hussein was Kroll's next target, as the firm was hired to unearth some $10 billion in missing oil profits. Believing the dictator had funneled his ill-gotten gains into Western investments, the Kuwaiti government asked Kroll to find them. Throughout 1990 and 1991, Kroll investigated and found a number of corporations and individuals fronting for Hussein, who had hidden funds in both the United States and Europe. Kroll then played Agatha Christie to prove Italian banker Roberto Calvi, nicknamed "God's banker" for his ties to the Vatican, had not committed suicide back in 1982. Kroll's inquiry, which began in 1991 and ended in 1994, uncovered proof that Calvi's failed Banco Ambrosiano had been laundering money for several shadowy clients. It turned out the banker had been murdered by Sicilian mobsters for mishandling some $175 million of their funds and threatening to name names in an ongoing investigation.

Kroll also went up against organized crime in the United States, investigating New York's garment and trucking industry. By this time the firm had an army of over 200 full-time sleuths and more than 500 consultants digging up dirt for clients. Hired to oversee the dismantling of the Gambino family's trucking monopoly in 1992, the case lasted five years and brought acclaim from clothiers and even the New York Times. Another home-based client was the Port Authority of New York and New Jersey, which hired Kroll after the 1993 bombing of the World Trade Center. Kroll was credited with the Port Authority's ability to evacuate the majority of the towers' workers after the first plane hit on September 11, 2001, and before the buildings collapsed.

There seemed to be no end to corporate or international intrigue, as Kroll Associates was the world's largest investigative agency by 1995, with offices in Australia, France, Hong Kong, Japan, Mexico, Russia, and the United Kingdom, with others slated to open in India, China, and Germany in 1996. Yet with Kroll's immense success came scores of competitors and the loss of executives who either defected or quit to form their own investigative agencies. While Kroll's internal turmoil never rivaled that of its clients, Jules Kroll entertained the idea of merging with a like-minded company. It was not the first time either--he had had similar thoughts back in 1991 about a merger with Nashville's Business Risk International, then changed his mind.

Kroll's next suitor was accounting firm Coopers & Lybrand in 1996, which instead lured away several of Kroll's top officials; then came Insurance Services Group (ISG), part of the Atlanta-based Equifax, in early 1997. Again, the takeover fell through and more of Kroll's management departed. The $70 million company then hooked up with O'Gara-Hess & Eisenhardt, an Ohio-based armored car manufacturer. The new firm, Kroll-O'Gara Company, traded on the NASDAQ under the ticker symbol KROG.

Unfortunately, problems seemed to crop up almost immediately for the merged companies, from two corporate headquarters to the management styles of its officers--Jules Kroll, as chairman and CEO, and the O'Gara brothers (Bill and Thomas), who were co-vice chairmen. While the O'Garas and Kroll had worked together over the years, running their companies together was something entirely different. The merger was supposed to make Kroll-O'Gara the world's premier investigative and security outfit, offering its clients a complete array of personal and corporate services--but what the executives failed to address was how different the two companies actually were. Kroll was all about esoteric, behind the scenes maneuvering; O'Gara was the world's leading manufacturer of specially outfitted Hummers, limousines, and other vehicles.

While most believed Kroll and O'Gara would be able to integrate their businesses into a working if not cohesive whole, personality clashes also kept Jules Kroll and the O'Gara brothers from seeing eye to eye. Nevertheless, Kroll-O'Gara embarked on a series of acquisitions beginning in 1998 with Lindquist Avey Macdonald Baskerville, Inc., a forensic accounting firm based in Toronto; Chicago's InPhoto Surveillance; Fact Finders Ltd., based in Hong Kong; Louisiana's Laboratory Specialists of America, Inc.; and Schiff & Associates, Inc., based in Texas.

In 1999 came two more purchases, the United Kingdom's Buchler Phillips Group in April and the Nashville-based Background America, Inc. in June. Throughout Kroll-O'Gara's spending spree the firm's problems became more pronounced and the Blackstone Group expressed an interest in acquiring the company. Although the takeover was welcomed by many, the deal fell apart by late 1999. Revenues, however, had risen to $305.2 million for 1999, up nearly $45 million from the previous year.

Business continued as usual despite the pervading tension in 2000. Kroll-O'Gara acquired several more companies, including Minnesota-based OnTrack Data International, the country's largest information recovery firm, and Crucible, a Virginia-based protective services firm. Year-end sales figures for 2000 rose slightly to $310.6 million for the merged companies, but soon the inevitable came to pass. In August 2001 Kroll-O'Gara solved its problems with a permanent separation. The O'Gara armored car and security division was sold to Armor Holdings for around $52 million and the O'Garas went with it. The new Kroll Inc. was worth an estimated $200 million, had a network of more than 50 offices dotting the globe, and an evolving array of services including forensic accounting, background screening, travel security for high risk locations, building reinforcements, environmental compliance, and measures to combat cyber piracy and electronic infiltration.

Once the dust settled, New York-based Zolfo Cooper LLC, which specialized in corporate restructuring, joined Kroll. Founder Steve Cooper came with the deal and his expertise landed him the highly publicized role of acting CEO at Enron after its financial meltdown. But first came a shock: the terrorist attacks of September 11, 2001. In the tragedy's aftermath Kroll received an unexpected boost in revenue, hired not only by security-conscious corporations but municipalities scrambling to protect their citizens and implement antiterrorist measures. Chicago officials and owners of the famed Sears Tower updated the skyscraper's security system through Kroll, while thousands of New Jersey Transit Corporation employees were trained by Kroll in emergency response tactics and terrorist-fighting measures after so many of their brethren had perished.

Kroll in 2003 operated with five distinct yet complementary units: Background Screening Group (BSG); Consulting Services Group (CSG); Corporate Advisory & Restructuring Group (CARG); Security Services Group (SSG); and the Technology Services Group (TSG). During the year Kroll signed on for several high profile assignments including its appointment by the U.S. Dept. of Justice and the city of Detroit to monitor the allegedly corrupt Detroit Police Department, and with the Securities and Exchange Commission (SEC) to provide security consulting services for a year.

Kroll's ongoing operations could be narrowed down to upholding one basic tenet of human behavior: "Do unto others as you would have them do unto you." Back in 1994 Jules Kroll had used this Biblical adage to explain the difference between a person with ethics and one without (Management Review, May 1994), "You shouldn't do unto others what you would find hateful done to you. In every society the rules are a little bit different, but basically, treat the other person the way you would like to be treated." If everyone followed this simple rule, there would be no need for Kroll Inc. and its thousands of full- and part-time sleuths.

Principal Subsidiaries

InPhoto Surveillance Inc; Kroll Associates Inc.; Kroll Background America Inc.; Kroll Brazil; Kroll Fact Finders Ltd.; Kroll Information Services Inc.; Kroll International Inc.; Kroll Japan; Kroll Laboratory Specialists Inc.; Kroll Lindquist Avey Company; Kroll Ltd.; Kroll Ontrack Inc.; Kroll Schiff & Associates, Inc.; Kroll Zolfo Cooper Inc.

Principal Operating Units

Background Screening Group (BSG); Consulting Services Group (CSG); Corporate Advisory & Restructuring Group (CARG); Security Services Group (SSG); Technology Services Group (TSG).

Principal Competitors

AlixPartners; Applied Discovery; ChoicePoint Inc.; Guardsmark; Securitas AB; TransNational Security.

Further Reading

Ettmore, Barbara, "Investigation As Art and Science," Management Review, May 1994, p. 24.

Ferguson, Greg, "Going for the Gold," U.S. News and World Report, March 16, 1992, p. 9.

Fiskenscher, Lisa, "Diversification Makes Business a Kroll Model," Crain's New York Business, November 11, 2002.

Gubernick, Lisa, "April Fool?" Forbes, June 2, 1997, p. 58.

"Jules B. Kroll," Current Biography Yearbook, vol. 60, New York: H.W. Wilson, 1999, pp. 320-22.

Kiger, Patrick J., "Secrets and Strategy at Kroll," Workforce, June 2001, p. 48.

Lipowicz, Alice, "Investigating Kroll-O'Gara Merger," Crain's New York Business, August 18, 1997, p. 1.

Patey, Tony, "Kroll Investigates Germany After Focusing on Far East," European, February 22, 1996, p. 27.

Rama, Michelle, "Kroll Diversifies for Security of Bottom Line," Wall Street Journal, February 26, 2003.

— Nelson Rhodes

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Kroll Inc.

Type	Subsidiary
Industry	Corporate Investigation Risk Consulting
Founded	1972
Founder(s)	Jules B. Kroll
Headquarters	New York City, USA
Key people	Phil Casey, President and CEO Donald Buzinkai, CFO Sabrina Perel, General Counsel, Bill Bratton, Chairman
Revenue	$1 billion (2007) [1]
Employees	2,800
Parent	Altegrity, Inc.
Website	www.kroll.com

Kroll is a corporate investigations and risk consulting firm based in Midtown Manhattan, New York City.^[2] It was established in 1972.

Contents 1 History 2 Geographic locations 3 Range of operations 3.1 Financial Investigations 3.2 Due Diligence 3.3 Business Intelligence 3.4 Ontrack and electronic data recovery 3.5 Background Screening 3.6 Security Consulting 4 Historical cases 4.1 The Heroin Trail case 4.2 The John Fredriksen oil theft case 4.3 WTC and Sears Tower security 5 Other products - Identity Theft Shield 6 References 7 External links

History

Kroll was founded in 1972 by Jules B. Kroll as a consultant to corporate purchasing departments.^[3] The company focused on helping clients improve operations by uncovering kickbacks, fraud or other forms of corruption.

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.

In June 1993, A.I.G. "became one of the largest investors in Kroll, after it retained a minority interest in the firm."^[4]

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

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.

In February 2001, Kroll expanded its working relationship with 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."^[5]

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.

In 2002, Kroll acquired Kelly McCann's firm Crucible. In September 2008, Crucible was acquired by its management and now operates privately.

In July 2004, Kroll was acquired by professional services firm Marsh & McLennan Companies in a $1.9 billion transaction.^[6] Over the next few years, Kroll began selling off subsidiaries in order to focus on its core business lines.

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 Ratings and K2 Global Consulting with his son Jeremy.^[7]

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 includes USIS, HireRight and Explore. It is principally owned by Providence Equity Partners.^[8]

Geographic locations

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

The Europe, Middle East and Africa (EMEA) region is one of Kroll's regions. Kroll's EMEA headquarters are in London, and the company has a presence in Spain, with offices in Madrid and Barcelona. The EMEA region is supported by offices in Paris and Milan, while Kroll's office in Dubai provides risk consultancy services in the Gulf.

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:

Financial Investigations

Due Diligence

Business Intelligence

Ontrack and electronic data recovery

Kroll acquired a computer forensics, electronic discovery, and data recovery company named Ontrack, which has revolutionized Kroll's business operations. On January 31, 2006 Kroll Ontrack Inc. announced that it has completed the acquisition of Ibas Holdings ASA, a leading 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. As a result of the Ibas Holdings acquisition, Kroll Ontrack has become a leading provider of legal technologies, with operations in North America, Europe, and Asia Pacific. Kroll Ontrack's technology is expanding in-house, amplifying Kroll's capacities in its other divisions. Kroll Ontrack has patented technologies and capabilities in recovering seemingly deleted files, including internet-based information cleared from the cache.^[9]

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.^[10]

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 Master 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."^[11] 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.^[12]

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.^[13][14] They also took on responsibility for security at Chicago's Sears Tower following the September 11, 2001 attacks.^[15] 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,^[16] hired former FBI special investigator John P. O'Neill,^[17] 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.

Other products - Identity Theft Shield

Kroll entered into a joint marketing agreement with legal service plan provider 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.^[18] As of June 30, 2006, Kroll had over 560,000 customers, according to Pre-Paid Legal's quarterly report.^[19] In addition to the Pre-Paid Legal subscribers, Kroll's Identity Theft Shield serves about 500,000 other consumers.

References

1. ^ "Revenue." Marsh & McLennan Companies, Inc., February 12, 2008. "MMC Reports Fourth Quarter 2007 Results."
2. ^ "Office Locations." Kroll Inc. Retrieved on 14 August 2011. "Kroll Corporate Headquarters 600 Third Avenue New York, New York 10016 United States"
3. ^ "Background." The New Yorker, 19 October 2009. "Jules Kroll and the world of corporate intelligence."
4. ^ Eichenwald, Kurt (29 December 1993). "Prudential and A.I.G. In Dispute". New York Times. http://www.nytimes.com/1993/12/29/business/prudential-and-aig-in-dispute.html?pagewanted=2&src=pm. 
5. ^ "AIG offers Kroll Personal Security Services to Private Clients". Insurance Journal. 6 February 2001. http://www.insurancejournal.com/news/international/2001/02/06/12728.htm. 
6. ^ Pilla, David. "Marsh acquires Kroll in $1.9 billion cash deal", Best's Review, July 1, 2004, accessed January 28, 2011.
7. ^ New York Times profile on Jules B. Kroll
8. ^ Eder, Steve. Davies, Megan. Providence to acquire MMC's Kroll in $1.13 billion deal, Reuters, June 7, 2010, accessed January 28, 2011.
9. ^ "Kroll Ontrack Data Recovery." The Data Chain, 12 March 2012. "Kroll Ontrack recovers more than 103 petabytes of data over the past 25 years"
10. ^ "Identity Theft Restoration." Canada News Wire, 12 July 2007. "Identity Theft Restoration"
11. ^ Abrams, Floyd (2005). Speaking Freely: Trials of the First Amendment. Viking Press. pp. 124–137. ISBN 0-670-03375-8. 
12. ^ Robin Pogrenbin and Felicity Barringer (July 3, 1998). "CNN Retracts Report That U.S. Used Nerve Gas". The New York Times. http://query.nytimes.com/gst/fullpage.html?res=9906E6DB173EF930A35754C0A96E958260&sec=&spon=&pagewanted=all. 
13. ^ Douglas Frantz (September 1, 1994). "A Midlife Crisis at Kroll Associates". The New York Times. http://query.nytimes.com/gst/fullpage.html?res=9401EEDC1738F932A3575AC0A962958260. 
14. ^ Carey, Carol (1 July 1997). "World Trade Center". Access Control and Security Systems Magazine. http://securitysolutions.com/mag/security_world_trade_center/. 
15. ^ "About Us > History > Notable Cases". www.kroll.com. http://www.kroll.com/about/history/notable/. 
16. ^ Forbes. http://people.forbes.com/profile/jerome-m-hauer/41152. 
17. ^ Kolker, Robert (17 December 2001). "O'Neill Versus Osama". New York. http://nymag.com/nymetro/news/sept11/features/5513/. 
18. ^ "Pre-Paid Legal Services To Add Identity Theft Benefits Provided By Kroll Background America". 2003. http://www.kroll.com/news/releases/index.aspx?id=80. Retrieved 2008-04-03. 
19. ^ "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. http://web.archive.org/web/20070929103250/http://www.shareholder.com/ppd/EdgarDetail.cfm?CIK=311657&FID=311657-06-22&SID=06-00. Retrieved 2007-07-04. 

External links

	New York City portal
	Companies portal

• Official website

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