Asset Searching: Grown Up Hide and Seek

This article appeared in the March 2011 issue of Res Gestae, the Lee County Florida Bar Association monthly magazine.

Setting aside for a moment his disaffection for the profession, if Shakespeare had been a lawyer, he might have pondered, “To sue, or not to sue; that is the question.” Would the Bard on Avon have forgone “slings and arrows“ and opted for subpoenas and depositions? One can only guess; but the question (borrowed and corrupted to make a point) has merit in the world of grown up hide and seek when you are “it.” Will there be any assets to recover by filing this suit and how do we locate them?

Asset searching can be undertaken before filing suit, during the legal process and after achieving a judgment. The less time the defendant has to conceal assets the better, so conducting the search before filing suit seems obvious. While that looks better from a timing viewpoint; without subpoena power promising leads can die out. The ongoing law suit provides subpoena power, but case maturity has offered notice and time to conceal assets. The judgment opens doors, but has the horse left the barn by now? Ideally, assets should be cataloged then spot-checked throughout the litigation process.

The bottom line is paper trails almost always exist, providing routes to assets. Only the very sophisticated high-flying defendants manage to “bury their treasure” beyond all reach. The average asset-hiding defendant often does so in a panic and without much skill. However, in a climate with increased privacy concerns, the search exercise is challenging.

The Gramm-Leach-Bliley Act (GLB) criminalizes pretexting banks. The Fair Credit Reporting Act (FCRA) precludes accessing unauthorized credit reports. Yet, internet based companies boast, “We can get bank account data.” or “We have stocks and bond information at our fingertips.” I know of one information purveyor who brags, “I have a guy on the inside. He’s an investment banker with terrific access into bank accounts.” I guess what is illegal for us, isn’t for him! To me, just as the appearance of conflict is already a conflict…gray areas are already illegal. Don’t go there. There are legal ways to skin this cat, so let’s go there now.

First, we need to know where your judgment will stand in the order of things. Judgments are honored chronologically, so if yours will be 15th in line with the first 14 depleting the defendant’s assets, you may want to review your position. Hence; we see the principal rationale for conducting that judgment search before filing suit.

There are ample legal means for locating a defendant’s assets. Sniffing out the money trail means familiarizing ourselves with defendant, himself. The more obvious searches are real property (in and out-of-state), as well as vehicles and business interest. We also care about his family tree. Has there been an inheritance? Family members can also be temporary holders of assets to avoid litigation.

Identifying the defendant’s bank is not as tough as it seems. If he is employed, we follow him from work on payday. If the defendant is a business, we make a small purchase with our check, thus determining where it was deposited. If he has a mortgage or other loans, chances are all his bank business is conducted in the same place, where he is most comfortable. But we should not be all that disappointed at finding a token amount in a bank account. Banks must keep data on computer or micro-film, so the money trail is right there if we pursue it. Past statements show where the funds went when the account was diminished. Applications for car loans and leases are good rocks to turn over, as well.

Uniform Commercial Code (UCC) filings with business defendants may very well yield equity in the encumbered property. In business asset searches we are interested with real and personal property, financial assets (such as investments and trusts), intellectual property, as well as subsidiaries and spin-offs.

If there was ever truth to the saying, “One man’s trash is another man’s treasure,” it is right on the money (pun intended) in asset searching. Trash runs (a.k.a. dumpster diving) can also be employed to locate assets, as discarded trash often contains financial data. That is, of course, where there is no prohibitive local ordinance and trespass is not an issue. So far, the courts have upheld the concept that abandoned garbage is fair game, however, counsel should still be consulted before an investigator undertakes a trash run.

Locating assets may seem daunting, but determination and creativity can bring positive results. If it’s out there, it can be found!

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Dave Watts is a Certified Legal Investigator (CLI), a Certified Fraud Examiner (CFE) and a Florida Certified Investigator (FCI). He has been a licensed SWFL investigator since 1989 and New Jersey Licensed Private Investigator since 1976. Mr. Watts has over 30 years experience and past licenses in NY & PA. He can be reached at (800) 950-4808 or islandinv@aol.com.

Getting the facts…that’s what we do!

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