FTI supports US manufacturer with financial investigation in Latin American subsidiary

When a global tire manufacturer noticed troubling inconsistencies in the financial reports coming from its Latin American subsidiary, senior executives grew concerned. FTI Consulting was brought in to investigate and mitigate the matter.

Over the course of a few months, several warnings reached the senior management of the US-headquartered company. These included misaligned expenses, inflated vendor payments, and whistleblower complaints.

With operations in over 30 countries, the tire manufacturer could not afford reputational or financial damage stemming from hidden misconduct. The management team turned to FTI Consulting to uncover the truth and restore integrity to the business.

FTI Consulting deployed a multilingual forensic team with deep knowledge of Latin American business practices, regulatory frameworks, and cross-border financial analysis. The investigation began with a data collection process, involving forensic imaging of laptops, emails, and financial systems across the subsidiary’s offices in three countries. The team ensured that the project did not disrupt day-to-day operations.

Using advanced data analytics, FTI Consulting identified a pattern of irregular payments routed through shell vendors – companies that existed on paper but delivered no actual services. These vendors were linked to individuals within the company’s procurement and finance departments, suggesting a collusive scheme to siphon company funds. The estimated loss exceeded $5 million over a three-year period.

Through forensic accounting and interviews with key personnel, FTI Consulting uncovered not only the fraud’s mechanics but also the breakdown in internal controls that allowed it to flourish. Expense approval protocols were routinely bypassed, and due diligence procedures for vendor onboarding were either neglected or falsified.

In parallel, the consultants worked closely with legal counsel to ensure all findings could support potential civil or criminal proceedings if necessary.

The final verdict

The consulting team delivered a comprehensive report outlining the full extent of the misconduct, identifying responsible parties, and recommending immediate corrective measures. These included strengthening procurement controls, overhauling the internal audit function, and instituting a whistleblower program with anonymous reporting channels.

As a result of the investigation, the tire manufacturer removed several employees, initiated legal proceedings against implicated vendors, and implemented a robust anti-fraud framework across its Latin American operations.

“Our work not only mitigated financial losses but also restored trust with internal stakeholders and external partners,” reflected Lindi Jarvis, a Senior Managing Director at FTI Consulting.

Misconduct in the region

Financial misconduct remains a persistent issue across Latin America, where regulatory oversight can vary dramatically by country. According to the Association of Certified Fraud Examiners, the region experiences some of the highest rates of corporate fraud globally, with internal control weaknesses often enabling long-term misappropriation.