About Clearwater Advisors

Clearwater Advisors is the corporate risk management and business investigative services affiliate of CSC Capital. Critical and timely information in today’s complex business world is often the difference between success and failure. The on-going management and reduction of risk at all corporate levels and the application of specific tailored business investigations when necessary provides corporations with the information and tools to ensure continued success.

Global concerns about corporate risk have been increasing rapidly in the past twenty years. In this climate robust risk management frameworks satisfy compliance demands, enhance correct decision making, and increase performance. So too, intensive due diligence investigations can ensure that a planned merger or acquisition makes sense, a potential business partner, employee or supplier is legitimate, that an embezzlement or a fraudulent scheme is uncovered or controls put in place that such financial crimes are prevented, or that critical assets are recovered. If correctly implemented risk management procedures often reduce the need for business investigations, thus risk management and investigations work hand in hand.

Though Clearwater as a separate group was founded in 2013, CSC Capital since conception has been advising clients on matters relating to risk management and prevention, forensic accounting and financial crimes, compliance issues and general investigative research, such as asset recovery for bad debt, as well as company and personnel background searches. For example, back in 1993, the firm uncovered a large and long running embezzlement scheme while pursuing a deeper investigation into some accounting ill-regularities. The president and owner of a global marine products manufacture wrote this pertaining to the incident:

“CSC Capital reformatted the Chart of Accounts and Income Statements and brought the budgets as tools to the upper levels of management. [However] further number crunching showed inconsistencies in the computer financial statements, CPA year-end numbers and the numbers the in-house accountant was using. These discoveries alone have saved the company several times the fees paid.”

The founder of the firm was the on-site consultant conducting the top to bottom restructuring on this particular engagement. When interviewed later on the matter, he mentioned that the restructuring process itself uncovered the financial crime. “It was really pretty simple to detect that something was terribly wrong when we compared the accounts payable aging report with about a year of ‘unopened bank statements,’ in particular several large payments being made to unexplained vendors. Not only were these vendors not on the purchasing department’s list of suppliers, no one had ever heard of these companies nor their products. As it turned out the controller, who was authorized to sign corporate checks, had created these phony vendors to write company checks to himself, and this had been going on for over four years.”

Over the years through the course of CSC Capital’s restructuring process the firm continued to unearth corporate issues outside of mismanagement or a distressed financial situation. And in each client situation it became apparent that all these investigative searches could have been prevented if risk management controls were executed beforehand. From a senior executive using unionized Teamsters to work on his personal residence during working hours and overtime, to a CEO’s executive secretary buying personal items on his corporate credit card, or from a customer’s bad debt situation exponentially growing resulting in a forensic accounting nightmare, to unauthorized vehicle and material purchases involving several personnel. The firm even exposed a newly hired CFO that had once worked with “chainsaw” Al Dunlap, as a alcoholic binge drinker.

Further, CSC Capital has routinely conducted extensive background checks of our client’s potential business partners, executive candidates, unknown and/or suspicious suppliers, as well as performing exhausting asset recovery operations regarding millions of dollars of collectible bad debt, as a normal course of our restructuring process. Therefore, the origins of CSC Capital conducting investigative services prompted the importance of merging risk management and investigative services into the firm’s new business affiliate. Thus, while Clearwater today is a recently formed separate affiliate the business group clearly finds its origins nearly two decades ago. Importantly, Clearwater is also synergistically aligned with all of CSC Capital’s client services.

CSC Capital believes its synergistic approach to client services is critically important for successful client engagements and transactions. This is particular true with a Clearwater engagement because the firm’s methodology of corporate change runs parallel with both risk management and business investigations, in fact in many instances they merge. This is why the firm created Clearwater.

Interestingly, CSC Capital’s change process when applied to corporate investigations utilized a radical approach to the industry’s standard approach regarding investigations in general. Instead of digging and searching in one place, then moving to another place digging and searching, trying to expose the problem(s). Clearwater conducts a corporate-wide or department wide or unit-wide (depending upon the situation) layer-by-layer removal of “dirt” approach to problem finding. Like an archeological dig or peeling an onion our method, perfected by years of experience in corporate restructuring, maintains that clues to an underlying corporate disease are found through a thoughtful process of step-by-step elimination. Then because of our expertise in understanding how business processes and financial numbers are interconnected, we can pin-point ill-regularities more efficiently and effectively leading to faster and more accurate results. Instead of being an expert in private investigation searching for the corporate problem, the Clearwater advisor is an expert in business who creates the environment so that the corporate problem surfaces on its own. In other words, we conduct surgically precise business “sting” operations rather than prolonged business investigations.

Also like credit is to collections, or purchasing is to inventory control, risk management is to business investigations. In essence, have the proper procedures in place regarding the former, and the latter problems will be reduced or some cases eliminated completely. In this vein, Clearwater’s primary role in client services is creating risk management solutions, unless of course we were retained to undercover fraud or abuse or perform specific investigative searches. However, still Clearwater believes in setting up the corrective risk prevention measures in all client engagements thus reducing the necessity of further investigations for our client in the future.

Our industry due diligence has found that typically a firm performs one service or another; risk management or business investigations, and sometimes calling one by one name and doing the other. Clearwater contends the two are clearly distinct disciplines though linked in process development, like, as mentioned above, credit and collections. Besides our synergy with the restructuring services of CSC Capital, the merging of risk management and business investigation as two targeted and clearly defined solutions is what makes Clearwater unique and perfectly suited to provide enormous value to our clients.