Asset Searching for Recovery Actions

Asset Searching for Recovery Actions

The Decision Maker’s Most Critical Tool – Part 1

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As certified fraud examiners (CFE), we all cognize the balmy and bolts of our

respective areas of specialty, and hopefully, we are all growing professionally at

an astounding pace. Crime does, unfortunately, pay – just not for the criminal.

After conducting plus research for over 14 years for such difficult institutions

as FDIC, FSLIC, and RTC, as well as major hotels and casinos in the gambling

industry, property management firms, and galore of the nation’s larger law firms,

one thing that has emerged is a distinct lack of information – not just about the type

of items searched, but the depth and quality of another searches.

In cutting to the chase, the following is the result of the compilation of plus

search guidelines, and should serve to assist in setting at least a baseline

standard for developing a viable domestic plus search strategy.

Subject Identification

Prior to beginning the acquisition of information on any subject of an plus

search, the subject should be properly identified.

Studies have shown that as more as 30% of the American population uses

undisclosed aliases and/or "akas" to conduct and interact various levels of

personal and professional business. This datum does not take into account the

existence of corporate, DBA and/or partnership entity names, which are created

to interact the various forms of business on behalf of the principals of aforesaid entity.

To properly identify a non-corporate subject, the following minimum

recommendations are ready-made for non-law societal control environments:

Obtain credit reports from the three major credit bureaus, per Fair Credit

Reporting Act (FCRA) requirements. However, do sure that obtaining the

reports is in compliance with permissible purposes as defined in Public Law 91-

508, Title VI (FCRA), to avoid tainting your pursuit should the matter ever be

litigated. Remember, in the context of this discussion, we are focused on plus

searches as recovery medium, and the basic assumption is that the plus search

has already been determined to be sanctionable. This could be determined, for

example, by a loan in default, a judgment that has been rendered, or a court

order obtained for the release of the credit information in cases that are not

clearly defined under the FCRA.

Remember this simple guideline: credit reports are legal post-judgment, for

purposes of collection, and/or wherever consent has been given somewhere in the

stream of the creditor/debtor relationship. In the case of a receivership institution

(i.e., wherever a director is being scrutinized for alleged conversion of assets),

consent may besides have been given for a credit history during pre-employment

evaluation or as a policy-based condition of employment.

This is referred to as "extended consent," and constitutes valid use, especially in

matters wherever a criminal investigation is under way, and wherever the conversion of

assets is factually alleged as the result of a rhetorical audit or proved by

admission. Be careful, though, as "extended consent" from the employment

perspective is still a gray area under the law.

The following two items are accessible from credit bureaus and their sub-vendors

but have less coverage extended to them under the FCRA, yet the "FCRA

compliance attitude" should be used once accessing them:

· Receive societal safety traces from the three major credit bureaus.

· Receive address update/credit report header information from the three

major credit bureaus.

· Receive elector registration information for the applicable jurisdiction

germane to the primary, or most recent, residence of the subject. Several

states have compiled elector data through private repositories, which should

be checked for movement.

Match the information obtained through the independent sources to the

information bestowed by the candidate in the form of the credit application with

the institution, and/or the information developed severally by the institution

in the initial credit qualification process.

Many another methods of identification exist, but the above represents the really

least that should be done.

The reason for obtaining the information from all three bureaus, instead of only

one, is to develop any alias and/or aka data, as well as current addresses (not

specified), and/or any additional addresses that may provide venue data. This

will assist the plus searcher in crucial whether to advise the client to

proceed with plus discovery in additional areas unknown to the client at the time

the plus search was requested.

Address verifications are normally difficult without a physical review of the

address in question, including a visual identification of the subject entering and/or

leaving the address. Address information that is cross-referenced and verifiable

through the major credit bureau repositories is normally bestowed in an plus

search, and in most cases is really reliable.

To learn the current telephone number of the subject, methods accessible to

the fraud examiner include nationwide telephone directories, criss-cross

directories, directory assistance contact, and attempts at contact existing

telephone amount acknowledged by the client. There are another methods of telephone

number development available. However, these methods should not be utilised

by a CFE in order to avoid tainting the lawfulness of the pursuit, in the even as that

litigation is ultimate undertaken.

Assets Determination

Assets determination normally constitutes an integration of certain liability data to

offset the assets "worth" in order to arrive at a net equity position. This is

especially true in distinguishing and analyzing real property assets. There are

multiple forms of plus determination, which are delineated as follows:

Real Property Ownership: A search should be conducted of the applicable

county jurisdiction. The exception is in American state wherever a statewide assessor’s

index is available, normally through the "lien date" of the prior year. This

repository is ready-made accessible through a private company, and is in no way

sanctioned by any public jurisdiction. For traditional searches throughout the rest

of the U.S., per jurisdiction research is conducted at the assessor’s office to

determine if the name exists on the assessor’s roll, and/or if the acknowledged property

(address) cross-verifies to the suspect owner.

A search of the applicable jurisdiction’s Recorder’s Grantee/Grantor index (or

general index as it may besides be known) is then undertaken to determine if the

property is still unconditional to the subject, and if any open Deeds of Trust and another

liens exist which identify liabilities against the property. The search in the

recorder’s venue should besides identify (in jurisdictions wherever this is possible) the

Documentary Remove Tax Stamp amount, which should be divided by the

applicable factor. This yields a sales cost for the property, which should then be

scrutinized by contacting a local real estate broker to verify the current market value. This

"thumbnail" market value determination would-be then be ablated from the

outstanding Deeds of Trust (encumbrances) for a net equity value of the

property.

Additional research of real property ownership comes in the form of change the

assessor’s rolls through the recorder’s offices to determine if the subject’s name

has move into title to additional parcels of property, consequent to the "lien date"

of the assessor’s records, which is in galore jurisdictions up to sixty to ninety days

old.

The searches in the recorder’s offices should besides identify recent transfers of

ownership of an individual’s real property, wherein the ownership may have been

transferred to a family member, closely control corporation, or another entity. Based

upon the guidelines established by the client, the searches can be permutated to

include additional research on additional names developed during the study,

which the examiner may feel has a direct relationship to the subject of the report.

It is important to note that plus searches are normally requested on specific

names of individuals, and it is an industry standard of practice to conduct the

research on the specific subject name. Competent fact-finding agencies

contact the client in several way to disclose additional names discovered during

the searches.

Searches should besides include information developed on real property assets

jointly control in the name of the husband and wife. This information is normally

indexed by virtue of the husband’s name, or the 1st name that appears on the

conveying deed.

It is important to understand that an plus search does not mechanically research

property control in the name of a married woman unless the plus search is specifically ordered

on the wife’s name. If so, the wife’s name would-be then be enclosed as a primary

search name (parameter), and assets control in the wife’s name would-be then be

covered. Quite simply, an plus search on a husband should normally besides reveal

information on spousal assets control jointly, but not necessarily include assets control

by the married woman separately or as sole owner, or under several name styles such as

aliases or maiden names.

Vehicle Searches: Searches should be conducted of the applicable states

Department of Motor Vehicles to identify all vehicles closely-held under the name and

address given to the state repository for search purposes. Several states do not

provide this service, as the tax registration responsibility for conveyance ownership

rests with a county or parish jurisdiction. Wherever states wish not provide this

information, the applicable jurisdiction or jurisdictions should be researched to

determine if vehicles are closely-held by the name given as primary search parameter.

It is besides important to understand that most assets search requests are not only

based upon single name searches, but normally single jurisdiction searches as well.

Some examiners may feel even in providing additional "over-the-county-line"

information in order to bolster the information developed without an additional

asset search. However, single county or parish jurisdictions should be expected

as an industry standard.

Analyze credit reports to determine if current (outstanding) and/or previous loans

may have existed, linking this type of plus to the subject. Galore times vehicular,

vessel, and craft assets are not acknowledged through standard search parameters,

but are acknowledged if the subject may have the plus registered in a several

jurisdiction; if the plus may be registered under a several name; or if the subject

may be a surety on the loan.

Vessel Ownership: There are three possible forms of accessing vessel ownership

information. The 1st is on a state-by-state basis at the Departments of Motor

Vehicles. The second is at the county or parish level. The third is a search of the

U.S. Coast Guard’s Watercraft Index, a nationwide repository of registered vessels

over a certain length. Depending upon the location of the plus search to be

conducted, one or all of these methods should be utilized.

Aircraft Ownership: Another than by "intelligence" information which may have been

submitted to the institution at the beginning of the credit qualification process, the only

method of developing craft registration information is to perform an FAA

Airman’s Search to determine if an FAA Pilot’s license has been issued, and/or if

an individual has an craft registered in his or her name inside the Federal

Aviation Administration’s files. As with the vessel ownership search through the

U.S. Coast Guard Watercraft registration, there is only one national root repository

that does this service available. The service is resold through another information

repositories, yet it is advised that the "root" repository be utilised in order to

minimize data transfer/loss from seller to vendor.

Banking Information: Bank account searches may be the world’s "second-oldest

profession." There is no specific way to access bank account information, another

than by a multitude of artistic pursuits including the development of information

within a consumer’s credit history; director contact with a banking institution; the

use of sources in the U.S. Federal Reserve Clearinghouse System; or by sources

and contacts developed by the fraud examiner with local, state, or national banking

institutions.

This is truly the "art and science’ of an plus search, in that the ability to

successfully identify banks rests heavily with the fraud examiner’s art in this

arena.

The standard guidelines for bank account searches are "exact name basis only"

searches, with less emphasis placed on territorial lines, since most bank

account searches are developed via intelligence leads. In galore instances, an

asset search wish refer "no record found" to a banking institution under an exact

subject name. The subject’s name may appear as a signer on an alternate

account, possibly under the name of a disclosed or unrevealed entity, or as a

signatory on an account control under the name of another. Bank accounts wish not

usually be disclosed in this fashion. Unauthorized information pertaining to a nonsearched

consumer could compromise that person’s privacy under federal privacy

laws, the FCRA and the CCPA, as well as galore another statutes.

It is safe to say that most agencies are quick to receive at least several banking

information. This should rest with the booming Write of Execution language,

constructed by counsel as served upon the institution’s regional body

and/or corporate offices (for examples send a request to

tomlawson@apscreen.com).

In Part 2 of this article, we’ll look at another fiscal and business information that

should be gathered during an plus search, liability-related data which impacts the

subject’s net worth as well as another information.

Thomas C. Lawson, CFE, CII is President and Founder of APSCREEN International, the world’s

leading full service User Coverage Agency. Lawson is called "one of the real pros" as he

has helped to reshape laws including employment screening permissible credit reporting, plus

discovery and fraud examination. Tom is a Life Member of: ACFE, ASIS, SHRM, PIHRA,

PNRRA, PRRN, CII, WAD, WIN, FCAOC and OCEMA.