PART 3

It was early morning when the plane arrived in Bakou. Ling opened the large exit doors of the brand new airport lounge. God, it was hot outside, she wondered. It was already 30°C or something. The sun was trying to break out through the heavy black clouds. Amir tapped her on the shoulder and pointed to the mountains afar. Ling could see in the horizon dozens of tall structures. She focused and recognized oil rig chimneys. How many where there? She had never thought an oil complex could be that big. As far as she could see, she could see those chimneys pouring black smoke that was transforming into black clouds covering the sky. Two big black stained-glass hummers approached on the access way and stopped in front of them. “My name is Claire Delacour, please to meet you. Come on in.”, they heard with a slight foreign accent as she stepped out of the car. You could see Amir and Edouard jaws dropping. Claire was a tall, very hot young woman. Her tanned skin was glazing in the morning daybreaks. She had this way of curling her lips, which revealed her long experience of arousing men. Edouard and Amir immediately rushed to the front seat. “Claire, I’ll go front, we can talk about our mission”, said Edouard discreetly pushing Amir away. What does a girl like that do in a place like this, thought Ling before realizing how much cliché there was in this thought. The cars started taking off at full speed on the new empty motorway to the city center. “Cash is flowing in the country since oil companies have come here, explained Claire. President Abaiev has launched an unprecedented building development in central Bakou. At least a dozen skyscrapers and two motorways are actually under construction, mostly contracted by Chinese companies. Our local partner at Bagpadan, an intimate cousin of president Abaiev actually does a lot of business with the Chinese”. Claire turned down the music and suddenly spoke lower as to say something confidential “…and I am a bit worried for our business as I have mentioned to Blackpool’s auditors, because a lot of Chinese tanker ships have accosted to the Bagpadan shipping terminal lately, but officially we do not have any trade agreements with Chinese companies here”. In the back seat, Amir was eating out Claire’s words. “Don’t worry we are here now”, he dropped out of nowhere. Ling facepalmed herself.

The oil complex was appearing more distinctively now. Ling recognized the place from the report. On the East, the drilling part was distinctive; a forest of pumpjacks were covering the dry, dying land. South, covered in black dusty smog, she could imagine the refinement plant, its thousands of kilometers of tubes, valves, and chimneys, and in front of them the shipping terminal and the Bagpadan tower building. Three tankers were sitting alongside the quay. The hummers speeded up through the complex’s heavily protected entrance. They stopped in front of the main building. An oligarch’s fantasy thought Ling; the tower was all made of glass and steel, and two massive golden statues of horses were guarding the building’s main door. Claire showed them the way through the main hall. Perhaps 3 or 4 levels tall, it was built so as to look like a cathedral. Four carved marble columns were supporting the ceiling on which were painted a very kitsch patchwork of angels, oil rigs and right in the middle what looked like the portrait of President Abaiev on a flying lion. “Awful taste”, commented Amir. Ling approved with a little nod. Edouard had started a very energetic discussion with Claire about life as an expat, particularly in the oil industry. Claire explained how she had accepted to live in such conditions a few years to earn enough to buy herself a nice little apartment when she’ll go back to London. Ling could understand this point of view as she had often thought about leaving herself, but it seemed Edouard didn’t. “I wouldn’t want to live anywhere else then at the center of everything”, told Edouard,” Singapour, London, even Brussels; there is so much to do, so much to see out there, you shouldn’t shut yourself away at the edge of the civilized world dear.” “Well, we’ll see in a few years Edouard, replied Claire, now here is the room you can use for your work. You’ve got access to the accounting software from the computer in the back. All our documentation for the internal control matrix is in the file on the table. Good luck, I’ll be next door”, she finished closing the door behind them.

“Ling, you will start to have a look at the SOX documentation. Amir… well I was going to tell you to browse through the ERP data, but I see you are already on it”, said Edouard surprised. Yes, Amir was kind of a geek, remembered Ling, every time there was a computer in a room you could bet Amir would be on it before you knew. She started going through the documentation. SOX stood for Sarbanes-Oxley, a recent federal law forcing all listed companies on a US stock exchange to comply with very strict and intricate control procedures. Ling was leafing through the 404 section which disclosed internal control results when Amir abruptly turned around on his chair. “Come and see this guys!”, he shouted very excited. “See these inventories”, he pointed on the screen, “lettering of these entries is done via a specific sales account numbered 400302.” He paused and tried to use the classical transaction code for this operation. “See! We do not have access to this account!” He said triumphantly, “it doesn’t even appear in the financial statements given to Blackpool”. Edouard seemed worried, “can you access this account in any way?”, he asked. Amir closed his eyes. Ling had seen him do that several times already; she knew he was in great concentration at that moment.”I’ll try something”, he said tapping relentlessly on the keyboard, “we know the site director, M.Everian probably has the access rights because he’s involved in all of this. He might be dumb enough to use his session password to access the accounting software. If I go to the Active Directory Administration log, I can retrieve his windows password. Now let’s try this one to access the ERP…Bingo!”, he yelled as the software screen appeared. Ling gave a closer look to the data. “There’s our barrels, she said pointing to the top lines of the screen. You see these transactions; this indicates there have been regular shipments of sour oil to a counterpart in Asia. Try to go up to the payment, Amir. On which bank account was it paid?”, she added. Amir clicked on one of the transactions and queried the software for the payment. “This bank account doesn’t appear on the Blackpool’s report!”, he said astonished. ”Payments are automatically directed to the Zoug Helvetic Bank in Switzerland. SWIFT number 0040 003234”, finished Amir leaning back in his chair. Edouard was slouched on the seat’s armrest and in a deep reflection. Ling looked him in the eye and asked cautiously “So, do we follow the barrels…or the money?”. Edouard slowly rised up and went to the picture window. He could see all the way down to central Bakou and its dozens of buildings under construction. On his right, a few tankers were waiting their turn to the quay. He turned round to face Amir and Ling who were waiting with impatience. “Good job guys… We already imagine where the oil is going, probably China… What’s bothering me is how deep the fraud can go. Are Blackpool’s investments safe? Who is running the system? Juniors, don’t take the pain to unpack, we’re taking the first flight to Zurich…”

PART 2

Ling let herself sink into the plane’s seat. Why did she accept to go to the alumni meeting yesterday night, she got too much alcohol and not enough sleep and waking up at 6 this morning had been a torture, she didn’t even have time to grab something to eat. She turned to the seat on her left to see Amir already tapping like a freak on his laptop. He seemed to have better withstood the party then her, even if she had seen him drink a lot last night. Fortunately, the stewardess was distributing coffee; at last, thought Ling, she was going to wake up a bit. On her right, Ling took a short glimpse of Edouard who was calmly reading the economic section of the Times. It reminded her that she didn’t have the chance to look at the preliminary report yet. It was about time she actually informed herself on the mission. Ling took out the report from her attaché case. She was used to these now. Everytime she went on a mission she was provided with a Level 1 analyst review, “the moles” as they were called in the company as they spent their days in the office gathering information for the operating experts. Same organization as in the MI-6 she was once told in a meeting. The first part of the report was dedicated to Blackpool’s internal audit findings. She quickly went through the explanations and stopped suddenly. That is odd, she thought to herself. The data extracted from the company’s ERP software was clear: Bagpadan produces each month 200 thousand barrels of Brent Crude oil entirely sold on the London Petroleum Exchange and 30 thousand barrels of low quality sour oil. Client receivables were roughly in line with this production. Their Level 1 had commented underneath that this level of production was in line with the geological aspect of the reservoir. Ling paused a second. How can 30 thousand barrels of low quality oil be extracted each month when the inventory software states there is 600 thousand barrels of it in the warehouse? Is it an error in the software parameterization? The warehouse is dealt with automatically; robots detect oil levels in the tanks and write their results in the warehouse management software. There is little chance anyone could have modified the quantities. Ling tried to remember her recent sector formation; Brent Crude was the high-quality material extracted in clay oil reservoirs. Every barrel sold in the world was severely tracked and exchanged in London. It was hard to fraud any quality oil nowadays; a very different story from the other type of oil extracted in Bagpadan. Sour oil has high levels of sulphur which makes it unappropriate for any use except plastic production. There was no formalized market for this type of oil; a few companies in the world were buying oil of such low quality. Who could want 600 thousand barrels of it?

The rest of the report consisted in badly printed photocopies of a Russian report. There seemed to be satellite photos inserted in the report, Ling could make out what seemed trucks on a mountainous road, but couldn’t understand any word. She spotted a few words written in a quick way in the margin, it said “Look to the Antwerp strategy”; probably written by one of their analysts she thought. She turned round and asked Amir aloud “Have you ever heard of the Antwerp strategy, dear?”.  She heard a voice answering from behind her back, “The Antwerp strategy is the key to the system, juniors”. Edouard closed his newspaper and reached closer to Amir and Ling, “The Antwerp strategy is a myth and was never proven true. In the 1980s, a few big multinational companies like De Beers had a quasi-monopoly on diamond trading as they possessed virtually all the diamond and saphir mines in Africa and South America. The jewish diamond dealers of Antwerp in Belgium were paying exorbitant prices to these companies to supply their workshops. Edouard took a sip of coffee. “At that time, South Africa was still under apartheid rule and thus was under an international embargo on diamond exportations, among other stuff. Rumors at the time said that Afrikaners were illegally laundering their diamonds to the Antwerp dealers via local partners in the Mozambique diamond mines which were then sold to less regarding trade partners in Israel. These diamonds were shipped as “diamond dust” which bypassed the strict anti-blood diamond tracking system.” Ling and Amir were listening attentively now. “So, you’re saying this is what is happening right now in Bagpadan, right?" whispered Amir leaning forward. “Precisely, answered Edouard. Think about it juniors, we know rumors are spreading about Iranians laundering their oil via Azebadjian. One of our contacts in Russia has obtained proof of tankers crossing Caucasus from Iran. We know that somewhere somehow thousands of barrels of oil enter storage in Bagpadan and disappear as fast and secretly as they have appeared.” Ling laid back in her seat. She tried to visualize the process, to get the big picture. She took a few notes, drew the flowchart and tried to synthesize: so basically Iranians were sneaking oil through the Bagpadan refinement facilities and passing it for low quality oil that could be easily transferred elsewhere to non-regarding partners. She closed her eyes and asked herself how on earth people could bypass internal controls and application security to make thousand barrels vanish into nowhere. “So what are we going to do then?” asked Ling suddenly waking up. Edouard took a minute; Ling could see he was thinking hard, it didn’t seem simple at all. “We’ll see once we’re there, he replied. First, we have to understand how they managed to get through our control process and then…”, Edouard paused.”…and then we follow the barrels”, he finished, snuggling down in his seat…

PART 1

It was one of those rainy greyish mornings which London is used to. Ling was enjoying her coffee at the company’s cafeteria at the 34^th floor of the Lloyds building. The view was one of London’s finest, you could see all the way to Canary Wharf on all the activity buzzing through the City. This reminded her how far she had come to be here, one of the youngest analysts at DeMoisson & Associates. Ling had graduated from Oxford with a degree in International Taxation Law and had been working at DeMoisson since then. Her thoughts were interrupted by the sound of a coin being put in the coffee machine. “Ling, darling, your skirt is so tight I can barely concentrate”. She turned round and immediately recognized Amir. Amir and her had entered the company together a year ago and had become close friends, even if they couldn’t stop arguing about everything. Amir is from French-Moroccan origins and also graduated from Oxford in Computer Systems Analytics; both of them knew each other back from university. Ling was well aware that Amir had a particular taste for Asians and was famous at uni for being the only non-Asian member of the Japanese and Chinese societies at Oxford. But even if she sometimes disapproved his behavior, she finded him a good joke and liked to work with him.  “Oh dear, Amir, stop being a jerk and just grab your coffee, you know we have a meeting in a minute for our next assignment. Let’s go, we’re already late.” Ling and Amir hurried down the corridor to the conference room. Walls were lined with photos of oil rigs, quarries and container ships, reminding that DeMoisson & Associates was the assurance and compensation specialist for high investment industries around the world. Ling and Amir were part of the audit department and as such were responsible for assessing client’s risks and garantees.

Two people were waiting for them in the conference room. “Sorry boss, elevator traffic jams this morning!”, joked Amir. “Ok, enough you two, just sit there and be quiet for once” replied John amused. John is the Investigation & Dispute department head. ”Guys, let me introduce you to your new senior consultant Edouard. Edouard is joining us from our Singapour office, where he worked as our Oil & Gas specialist for our French and Dutch clients. You will be working together on your next mission, and Edouard, I can promise you, those two are not easy to manage” said John rising his eyes to the sky. Edouard gave a hint of a smile. Ling considered him more closely. Edouard was a tall, gracious, blonde man, perhaps 28 or 29 years old, he was very good-looking, but had this kind of old-fashioned aristocratic way of behaving. He was wearing a perfectly tailored suit and expensive leather shoes, but also a non-standard Mao collar shirt underneath and no tie which gave him some kind of exotic appearance.  She already knew much about him; Edouard De Beaufort, born in an old noble Belgian family, spent his youth in Congo and graduated from the French Petroleum Institute; rumors at DeMoisson said he was only assigned to the most risky clients and was the rising star in the Singapour office.

“One of our London-based clients Blackpool Assets Ltd has recently invested a big amount of money in the Bagpadan refinement facilities south of Bakou, Azerbadjian, continued John switching on the projection screen, and their internal audit teams have detected anomalies in inventory counts since their local partner has assigned a new plant director to the facility. We happen to have a global assurance contract with Blackpool Assets and as such we need you to assess the fraud risk of this particular subsidiary. As you see, pointed John to the screen, Bagpadan is close to the Iranian border and our analysts have informed us that some of the Iranian oil which is under embargo is smuggled through Azerbadjian to be sold. I am therefore advising you to be very careful during your investigation as you might be confronted to bigger business stakes than expected.” Ling looked at her colleagues over the table; Edouard was frowning eyebrows, he seemed very concentrated. This seems like a tricky mission thought Ling dreaming. “Good thing I got myself an Amex Gold, whispered in her ear Amir, flight and hotel bills alone are going to give me a hell of a lot of points!”. God, could this guy never be serious one moment, said Ling to herself.

“You’ll be taking tomorrow morning's flight to Bakou, your local contact will be Claire Delacour, which acts as Backpool's industrial controller in the Bagpadan oil complex. She should be picking you up at the airport in about 21h, said John looking at his watch. We received assurance from our client that local personnel should be cooperative and that you should have full access to the information system and to the warehouses. You’ll find detailed information in the preliminary report you’ll receive before leaving. As usual, you will find internal audit’s documents as well as our Level 1 analysts’ review. Ling, Amir, Edouard, good luck for your mission and don’t forget what DeMoisson&Associates has always stood for: excellence for our clients, quality above all others.”

Amir started clapping. Now, that made Ling giggle, how many times they had been hearing this corporate rubbish! Whatever, she thought. She was focusing on Edouard, trying to interpret his reactions to this presentation: is it going to be dangerous? Is it going to be difficult? She couldn’t really point out any emotions, Edouard seemed concentrated, but stood very calm, he inspired confidence. He turned to the two juniors and winked with a large smile “See you two at the airport then “terrors”, try to get a good night sleep, cause it’s going to be a long day tomorrow”. John and him left the room talking low. “Well then Amir, don’t forget to be on time tomorrow, the plane company is not going to buy elevator problems this time”, saind Ling as she left the room, leaving Amir muttering over his laptop. A good night sleep it will be then, she told herself with a blasé tone, it really is going to be a long day tomorrow after all...