Ex-Agent Finds New Life as White-Collar Crime Buster

Just before retiring from a 23-year career with the FBI, Tom Parker noticed a very disturbing trend in the crime statistics.

Fraud against corporations was on the rise, and overworked law enforcement agencies could only investigate the largest cases.

“The threshold of fraud necessary for us to investigate kept increasing,” he said. Meanwhile, local law enforcement agencies were forced to concentrate on street crimes, such as gangs, drugs and robbery.

“That created a huge gap where some very significant cases fall. Corporations were coming to us, but we were turning more and more of them away,” Parker said.

And as corporations increasingly turned to the private sector for help, Parker decided to cash in on his expertise of more than two decades fighting white-collar crime.

On his 50th birthday in February 1994, Parker--then assistant special agent in charge of the bureau’s Los Angeles field office--ended his FBI career. The following day, with the help of half a dozen former colleagues, he formed his own private security firm, the Emerald Group. The Thousand Oaks-based company has grown along with the booming frequency of corporate fraud.

White-collar crime comes in many forms, and financial losses linked to computer hacking, bribery and various kinds of industrial espionage have jumped 323% since 1992, according to the American Society of Industrial Security in Arlington, Va. Based on 700 reported incidents between 1993 and 1995 alone, U.S. companies lost an estimated $5.2 billion.

In that climate, the Emerald Group has seen its operation grow tenfold. The firm now has 77 associate investigators in 16 cities in the United States and 14 international locations from London to Buenos Aires, Hong Kong and Sydney.

“I built a mini-privatized FBI,” Parker said proudly. The list of associates includes high-ranking agents who have retired from the FBI, the Secret Service, the IRS, Scotland Yard, Interpol and the Australian Royal Navy. They are investigation specialists in forensic and behavioral science, legal affairs and technical operations. The firm even brought in a Pulitzer Prize-winning journalist who helps corporate clients deal with the media in times of crisis.

And the Emerald Group has formed a strategic alliance with Price Waterhouse.

The worldwide accounting firm had been conducting forensic accounting investigations for several decades, said Jim Hunt, who heads the white-collar crime investigative unit of Price Waterhouse in Los Angeles. But with an increase in the sophistication of white-collar criminals “we found there was a need for law enforcement skills,” Hunt added.

“When we get in a situation where we see a need for surveillance, we may bring in the Emerald Group to do the [electronic surveillance] sweeps or fingerprint analysis,” Hunt said. “It is like a private sector law enforcement unit.”

But private security firms and law enforcement agencies have one major difference, Hunt said.

While the government is interested in convicting criminals, corporations who hire corporate security firms often just want to recover their assets. In fact, corporations see criminal prosecutions as an embarrassment that can negatively affect their reputation and stock price.

So most of what the Emerald Group does--and who it does it for--is considered highly confidential.

“Discretion is absolutely essential,” said Bill Boni, who heads corporate security for Thousand Oaks-based Amgen Inc. “That is part of what you are paying for.”

Just two years ago, the company used the services of a New York-based security firm to thwart an apparent piracy scheme, Boni said. An Amgen employee was attempting to open up a black market for illegally manufactured supplies of Epogen--an Amgen drug with annual sales valued at nearly $900 million--in an unidentified Asian country.

With surveillance operations in Hong Kong and in Thousand Oaks, the employee was caught. He confessed to the crime and was fired, but no charges were ever filed. Boni declined to say whether Amgen has ever been a client of the Emerald Group.

For Parker, solving conspiracy cases carries a personal reward.

“I like the feeling you get when you [outwit] a criminal conspiracy,” Parker said. “It’s like a giant chess game. There is a tremendous feeling of accomplishment when you solve a case and when you see someone brought to justice.”

The Emerald Group counts about one fifth of the Fortune 500 corporations among its clients, said Parker, who refuses to reveal his company’s annual revenues or profits.

Parker’s recounting of his firm’s cases, with names of the alleged criminals and victims omitted, sound just like screenplays for the latest spy thrillers--agents chasing a money trail through shady bank accounts in tiny Caribbean islands or tracking down the owners of shell companies responsible for raiding the assets of Latin American businessmen. Or investigators seeking the release of an abducted foreign executive whose family was asked to pay a huge ransom.

The fraud business has not just grown in the United States, Parker said.

The Emerald Group does about 40% of its work overseas. With language barriers, as well as cultural and political differences, working in foreign countries is particularly difficult, Parker said. But it would be nearly impossible without the help of the international connections he established during his years at the FBI, he added.

“It’s a business of relationships,” Parker said. “When we branch out internationally we deal with people we know. We know they’ll do the work in the same fashion that we do here.”

Parker said the Emerald Group has established links with top executives of law enforcement agencies worldwide that allow it to work rapidly. Those connections are effective.

“In short notice we have been able to go into countries like Pakistan and Mexico,” said Hunt of Price Waterhouse.

But these days, you won’t find Parker himself in the streets of Islamabad, Mexico City or even Los Angeles.

“I do very little investigating,” Parker said. “I am managing the business. I am doing the marketing.”

That means staying abreast of the latest fraud cases and maintaining a good network or well-placed lawyers, accountants and executives, he said. And then, just like in any other business deal, “you come up with an estimate and agree on a contract,” Parker said.

Since leaving the FBI, Parker has also become involved in local politics. Two months ago, Parker came under fire for renting the Civic Arts Plaza to host a forum for City Council candidates--named the Emerald Forum--to which only four out of 10 council hopefuls were invited to attend. Critics said the move was an attempt by Parker to promote some candidates at the expense of others.

While he did not enjoy the controversy sparked by the Emerald Forum, Parker, who also contributed directly to the campaigns of two council candidates, said he plans to continue his involvement in Thousand Oaks politics--an activity he enjoys but was excluded from during his employment at the FBI.

Having made the switch from investigator to businessman, Parker said he has no regrets.

For one, it is more lucrative than government service, he said. “The other rewarding thing is the feeling of accomplishment of building a business [and seeing it grow] the way this one has grown over the last couple of years,” Parker said.

“But I loved every minute of my 23 years with the FBI,” he added.