What are due diligence investigations primarily used for?

Due diligence investigations are primarily utilized to perform background checks on entities, such as businesses, individuals, or organizations. This process is essential in various contexts, such as mergers and acquisitions, investments, and partnerships, where understanding the full scope of an entity's history, reputation, and legal standing is crucial. By conducting thorough background checks, investigators can uncover any potential risks or liabilities associated with the entity in question, ensuring that informed decisions are made based on comprehensive information.

In contrast, while verifying a suspect's alibi is an important aspect of criminal investigations, it falls outside the scope of due diligence, which focuses more on the historical and financial integrity of organizations or individuals rather than specific criminal matters. Monitoring criminal activity pertains to ongoing law enforcement operations to track and prevent crime, rather than the retrospective analysis that due diligence entails. Determining sentencing recommendations is a function typically performed in a legal context after a conviction, rather than a proactive assessment of an entity’s background. Therefore, performing background checks on entities is the most aligned use of due diligence investigations.