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We write about OSINT methods, tools, and techniques.

Why is due diligence important [Case Study]

Julien Grossmann
Posted by Julien Grossmann on Aug 28, 2020 2:23:52 PM

Due diligence has become an essential step in any business decision. Whether it is for investment purposes, client onboarding, or developing partnerships, businesses are under increasing legal and commercial pressure to conduct comprehensive due diligence. We recently spoke with one of our users in the due diligence space, and they kindly agreed to share with us their experience conducting such research with the Digital Investigative Board. 

 

They were tasked with investigating a company selling health supplements by one of their clients looking to engage with that particular company. The client had done some surface due diligence on their own but searches on Google and LinkedIn didn’t yield any meaningful results. Therefore, they contacted our user and asked them to conduct in-depth due diligence on the company and its owners and managers. 

 

Their skills and experience in using open-source intelligence (OSINT) in addition to the Digital Investigative Board, enabled them to identify a series of red flags and communicate those to their client quickly and efficiently.  

 

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A spiritual healer 

 

Buckyol USA is a company that sells a health supplement based on the compound Carbon 60, or C60. Their product, Buckyol C60 YEX Radical Terminator, purports to reduce ageing and enhance metabolism among other benefits. It is available on Amazon and the site says that its product is developed entirely in the United States and based in Irvine, California. 

 

Their website does not contain information about any owners. No board or founders appear which complicates efforts to learn more about this company. However, an address is listed at 21068 Commerce Pointe Drive in Walnut, CA, according to OpenCorporates’ database.

 

Thankfully, most things are not truly hidden once they are on the internet. Typing in the product into YouTube leads to a video showing an unknown speaker delivering a presentation on the Buckyol C60 product. At the end of the YouTube presentation, several social media accounts are listed for Jeff Mamora which the investigator looked into.  

On the Instagram and Facebook accounts associated with Mamora, there are numerous posts about spiritual healing practices mixed with conspiratorial content replete with hashtags that include #qanonarmy, #covid19hoax, and #arrestbillgates.

 

Mamora and Buckyol’s websites link to other companies. For example, on Mamora’s website, there is a link to another supplement company called LifeWave where in one post he is listed as a Director, matching his LinkedIn profile that mentions the same role but no company. 

As for Buckyol, it lists another Irvine, CA-based supplement company called Evitasource as a partner. Like Buckyol, this site does not list any owners but it mentions it operates an FDA registered facility. Entering the company’s name on the city of Irvine’s Business License database also points to a company office located in the city and shows it remains licensed. Nevertheless, no similar information was found on Buckyol in that database. 

 

Included on Mr. Mamora’s pages are customer testimonials about C60 Buckyol. In one video Mr. Mamora himself gives a reason to doubt the product’s medical use. 

In a promotional video of a vape form of Buckyol C60 which is allegedly “extremely profound and powerful”, he offers the disclaimer that there are “no medical claims” attached to the product. 

 

 

Who is Buckyol’s scientist? 

   

At this stage, the investigator thought it would be useful to know the man behind Buckyol’s presentation on Mr. Mamora’s YouTube channel to learn more about the product or the company. 

The man does not identify himself in either the introduction or ending of the video; the description attached only refers to him as the product’s inventor. After entering the product’s name onto Facebook’s search, the investigator found a post (in Chinese) that listed the names Dr. Richard Smalley and a “Dr. Butzloff.” 

 

A quick Google search of the two names showed that Dr. Smalley was a member of the research team that discovered C60 in 1996 and received a Nobel Prize for it. He passed away in 2005. 

 

But who is Dr. Butzloff? Using Google, the investigator came across a direct connection between the two men. In July 2001, Dr. Peter Butzloff conducted a presentation at an international workshop in Potsdam, Germany titled  “A New Hybrid Nanocomposite Formed by Intercalation of MultiWalled Carbon Nanotubes into Epoxy Swelled Montmorillonite Clay”. 

Dr. Smalley was listed as an advisor for the event. 

 

After learning a full name, the investigator found that Dr. Butzloff was involved in several more ventures in subsequent years. Notably, he was listed as the President and founder of a 501(c)3 organization called the Honey Bee Research Institute and Nature Center (BRINC).

Mr. Butzloff worked in this capacity according to the Internal Revenue Service (IRS) documents until 2019 when he was listed as an advisor

 

Dr. Butzloff is also reported to be a Chief Technology Officer with a supplement company that sells some C60 products called Nano Genesis Labs. In the About section of the site, the firm credits its product as an important force behind C60. Another detail that caught the attention of the investigator was that Nano Genesis Labs lists Evitasource as a partner as well. 

 

 

The agent

 

In 2019, Jesse Chen was listed as BRINC’s new advisor and president after Dr. Butzloff took on an advisory role. 

Using LinkedIn, the investigator found an account for a Jesse Chen but it did not list BRINC as an employer. This profile, however,  did include an endorsement from a woman who shares the same last name as Dr. Butzloff and has experience as a Marketing Coordinator for BRINC. 

 

Using a Facebook search of the endorser with this last name led to a profile picture showing a man that closely resembled the presenter in the Buckyol presentation. The photo included a caption for Father’s Day which likely proves the woman is indeed Dr. Butzloff’s daughter. 

 

In addition, IRS records showed Mr. Chen is connected to the address 21068 Commerce Pointe Drive in Walnut, CA, an address he shares with both BRINC and Buckyol USA. He is also listed as an agent for the latter on OpenCorporates.

 

 

A Hong Kong connection

 

Searching for background on Buckyol USA led to another company called Buckyol Limited. The only immediate difference between the two is the place of registration, the latter being incorporated in Hong Kong. 

 

According to a Hong Kong business directory, Buckyol Ltd. was registered on November 8, 2019. Only three days later, Buckyol USA was registered in Delaware as a foreign joint-stock company with its agent of service being Jesse Chen. 

 

To cement the possible link between Buckyol Ltd and Buckyol USA is information from the United States Patent and Trademark Office (USPTO). On USPTO, a patent is listed for a symbol shared by both Buckyols and the corporate address of Buckyol Ltd in Hong Kong.

 

 

Legal trouble in Arizona

 

Troubling information also emerged related to Dr. Butzloff. In September 2018, he was arrested and listed as a defendant in a federal insurance fraud case in Arizona. 

 

Butzloff was later indicted alongside another defendant named Robert Berger, former CEO of a California company called GraphicPak. The two men appear together on numerous patents filed from 2011 to 2014, including several with GraphicPak. 

 

The indictment filed by the U.S Attorney Office in Arizona reads that the two men set several warehouses on fire to falsely file for insurance claims. Some of the funds from this would eventually go towards the creation of BRINC; the organization owned by Butzloff on property belonging to Berger. 

Butzloff would plead guilty in September 2019. 

 

 

 

 

Due diligence consists of complex investigations that require the investigator to gather numerous discrete data points from a wide variety of sources of information. As this case study shows, comprehensive OSINT research can unveil surprising insights on a company providing very little information at first glance. 

 

One of the main challenges of such work is to manage the knowledge the investigator gathers as it goes about its work. Traditionally, due diligence researchers gather and consolidate their information in word documents or spreadsheets. But as the web of knowledge develops, keeping on top of it can quickly become cumbersome. 

 

With the Digital Investigative Board, the investigator was able to add to its knowledge directly from the web-page he consulted, making data collection much faster and efficient. Besides, the web-browser add-on automatically recorded source URL for any data point added or modified thus providing a complete audit trail to the researcher. 

 

Then using the Analytical workbench, the investigator was able to visualize and navigate the knowledge he had put together to find and communicate the insights that mattered to the client. 

 

Thanks to this investigation, our user was able to provide their client with a whole new level of insights on the company and its leadership. 

 

While the investigation is not meant to give clear advice on whether this particular company should be avoided or not, it nonetheless empowers the decision-makers to carefully assess the risk profile and estimate whether they would need to dig further before engaging with it. 

 

 

Topics: reKnowledge, due diligence

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