BOSTON (

TheStreet

) -- The stock-market crash, tattered banks and Ponzi schemes haven't been good for investors. But for investigators -- that's another story.

Ken Springer, a former Federal Bureau of Investigation agent and founder of New York-based Corporate Resolutions Inc., and Steve Lee, who runs Steve Lee & Associates in Los Angeles, have been working overtime investigating fraud at hedge funds, performing due diligence for banks and looking into competitive-intelligence work for consumer-credit companies.

"Years ago, financial risk used to be the biggest concern," Springer says. "Now it is reputational because you don't want your name in the papers. If you get taken by a fraudster, you are probably not going to get other investors down the road."

Companies often fail to check references and verify the veracity of information on resumes, and find out if people have a history of suing others or being sued, Springer says. "Past history is indicative of future performance," he says.

A useful tool Springer helps clients implement are "whistle blower" hotlines. He cites the example of a chief executive who was stealing from his company but was outed by a controller.

Steve Lee's expertise includes fraud investigation, asset tracking and recovery, computer forensics and research for class-action suits.

His firm is best known for its role in

Discover Financial Services'

(DFS) - Get Report

$2.75 billion antitrust settlement with credit-card giants

Visa

(V) - Get Report

and

MasterCard

(MA) - Get Report

last year.

The Discover case turned on whether Visa and MasterCard had blackballed their smaller rival from doing business with whom Lee calls "the big boys of banking," such as

Citigroup

(C) - Get Report

and

Bank of America

(BAC) - Get Report

. After Discover received a favorable ruling on restraint of trade, Lee and his team were tasked with illustrating the scope of the damages. To do so, they crafted a financial model that recreated the financial landscape as if Discover had been able to freely compete alongside the other companies.

It was a challenge, but one Lee and his firm were equipped to handle, having done competitive-intelligence work for 15 years. When

Morgan Stanley

(MS) - Get Report

owned Discover, it retained Steve Lee's firm for such efforts.

The work paid off. Visa and MasterCard eventually backed down and agreed to what was the third-largest antitrust settlement in U.S. history.

Lee says he, and others in his field, saw the warning signs of 2008's economic freefall.

"To any client who was listening to us, we were telling them three to four years ago that we could see that there were very significant problems coming in the residential mortgage-lending business," he says. "Not everybody believed us."

Lee was hired by IndyMac in early 2008, just months before the bank's collapse.

"They wanted to start looking more closely at some very significant developer lending they had done," he says. "As we investigated borrowers, we'd find these remarkable things, like most of the developers' assets weren't effectively pledged to their loan. There might be a few hundred million dollars of 'book value,' but perhaps only $7 million in attachable assets to support a several hundred million loan. We realized early on that there was very little due diligence being done."

Lee says that, with increased scrutiny, tighter regulations and Troubled Asset Relief Program (TARP) responsibilities, banks may be more tempted to cover up problems rather than deal with them.

"They often fail to do the right thing because of this overweening concern that doing something is going to reflect more poorly on them than doing nothing," Lee says.

He recalled a case in which a "top-10 bank" was involved with a large communications company that claimed to be selling a lot of equipment overseas. After the CEO died, some questionable business practices were starting to emerge, and Lee was hired to sort fact from rumor.

As the investigation progressed, he determined that the company had engaged a broker and was advancing loans from the bank directly to him. The broker was then "self-dealing," crafting bogus trades where no equipment actually changed hands and instead, on paper, was bounced around shell companies to account for "revenue."

Where was the money going? In part, it was diverted to South American gaming interests and night clubs. Tied to these was extensive drug trafficking and relationships with organized crime.

Lee says he was shocked when the bank said it needed his help in keeping such issues away from federally mandated Suspicious Activity Reports.

Lee said he was forced to fire the client, a first for his firm.

Experiences like that may explain Lee's cynicism. He's unconvinced the lessons learned from last year's financial crisis will be remembered for long.

"In the boom times, we saw lots of merger-and-acquisition due diligence work for banks, funds and Fortune 500 companies that was little more than a paper exercise to cover the buyer's tracks in doing transactions they had already decided to do," he says. "That policy was costly. The thrust at the time was to get the deal done and don't worry about the consequences. I fear that when this recession ends, it will be that way again."

-- Reported by Joe Mont in Boston.