Is China’s Increased Investment Elevating Latin America’s Risk Profile?

Drew Costello, Partner, Forensic Risk Alliance, USA

Economic initiatives within the Latin America region over the past two decades have led to a dramatic increase in investment from China, particularly within critical industries such as energy, infrastructure, telecommunications and healthcare. China’s Belt and Road Initiative (’BRI”) and more recently the Covid-19 pandemic response have dramatically increased China’s influence in the region, overtaking that of the United States on a trade value basis. While this investment has helped advance certain economic objectives, the large influx of money has arguably increased an already elevated risk profile for companies operating in the region. Latin American has long struggled containing corruption, as evidenced by having some of largest corruption scandals in history occurring in the region. Add an infusion of business coming from China, a country with its own established record of corruption issues, into the mix, and it is unsurprising that issues are starting to emerge.

Drew Costello is a Partner at FRA based in Philadelphia, Pennsylvania. Drew specializes in the areas of Forensic Accounting and Corporate Compliance with over 20 years of experience in both professional services and industry roles. Drew provides investigative services for attorneys, corporate management, and governmental agencies pertaining to a variety of matters, including bribery and corruption, earnings management, false claims, conflicts of interest, commercial disputes as well as general fraud and misconduct schemes. Mr. Costello has significant experience guiding companies through regulatory investigations involving the DOJ and SEC, including those resulting the appointment of independent compliance monitors. Drew also assists clients in establishing and strengthening compliance, ethics and anti-fraud programs and internal controls to mitigate the evolving risks of digitalization and regulation. Mr. Costello has direct experience in leading companies through all stages of compliance program maturity, from establishing a foundation of policy development and global awareness training, procedural development of core compliance activities, to embedding a risk-based monitoring and auditing protocol. Drew’s compliance advisory services have also been performed in support of a DPA-imposed independent compliance monitor. Prior to joining FRA, Drew was a Director of Compliance Audit at Teva Pharmaceuticals where he managed and delivered proactive audits assessing compliance and fraud risk related to FCPA, Anti-Kickback Statute, False Claims Act, antitrust laws, data privacy, and restricted promotional practices in the US and over 80 global affiliates. Who’s Who Legal has recognized Drew as a Global Leader and Forensic Accounting expert. Sources describe him as ’the consummate professional” and have noted his ’great strategic thinking with an understanding of the legal issues.” Drew is a Certified Public Accountant (CPA) licensed in Pennsylvania, a Certified Fraud Examiner (CFE), and is Certified in Financial Forensics (CFF). Drew’s community involvement includes serving as a board member of Breakthrough Challenge, a non-profit organization, whose primary mission is to support breakthrough research at Penn Medicine’s Abramson Cancer Center.

Forensic Risk Alliance has worked all over the world to solve complex forensic issues for multinational clients, FRA is an internationally recognized as specialists in multi-jurisdictional investigations. FRA prides itself on bringing a high level of confidence to clients facing serious issues by providing clear, robust, and candid advice that is trusted by clients, regulators, courts, and enforcement agencies. FRA frequently works at the direction of counsel on global matters including complex multi-year investigations, collecting data from numerous accounting and electronic sources, analyzing complex transactions and advising clients in response to regulatory inquiries and monitorships. Regulators they have dealt with include the US Department of Justice (DOJ), US Securities & Exchange Commission (SEC), the UK Serious Fraud Office (SFO), US Office of Foreign Assets Control (OFAC), as well as many other foreign regulatory authorities. While they possess financial and accounting skills in-house, we do not – unlike many of our competitors – offer traditional audit or accounting advice and are therefore largely conflict-free.