Eideard

Kroll, the secretive investigations consultancy, is facing embarrassment after giving a clean bill of health to a pair of alleged fraudsters who are accused of running a $248 million Ponzi scheme.

The revelation is a blow for Kroll as the American firm is still reeling from the discovery that one of its top investigators gave a similar endorsement to Sir Allen Stanford, the Texas billionaire accused of orchestrating a $7 billion Ponzi scheme.

In June 2007 Kroll was asked to investigate Barry Tannenbaum, a South African, and Dean Rees on behalf of a New York-based asset management firm that was considering investingplacing a large investment with the pair.

The due diligence investigation found nothing untoward with either Tannenbaum or Rees and is said to have shown both men in a “very positive light”, according to sources.

Since then Tannenbaum and Rees have been accused of running a scheme involving the importation of antiretroviral drugs into South Africa for the treatment of HIV. They are being investigated by South African police…

The finished Kroll report is understood to have been passed on to others, unwittingly pushing even more potential victims into Tannenbaum’s alleged fraud.

Kroll declined to comment on the report…

Electri International, a Maryland based foundation for electrical contractors, is suing Kroll over $6.3 million it placed with Stanford International Bank, Sir Allen’s Antigua-based operation, even though it paid Kroll Associates $15,000 in fees, plus expenses, to conduct due diligence on the bank.

It turned out that one Kroll official was Allen Stanford’s buddy. Not that it would have colored their report. Right?