NABBING ASSETS BEFORE THEY'RE EATEN UP

By: Edmund J. Pankau

You have gone through the full legal process, won your client's case and
obtained a substantial judgment. All you have to do is levy the assets of the
other party and reap the rewards. But is it that easy?
You've perfected your judgment, the opposing party refuses to pay the debt, and
the sheriff or constable cannot find sufficient assets to satisfy the judgment.
What happens next?
Most attorneys first try to depose the other parties in a postjudgment discovery
action to determine their net worth and then locate the source of assets. You
should require the opposing parties to present their financial statements, tax
returns and bank statements. Also, question subjects about their income and
personal and business assets.
During this postjudgment discovery, many attorneys find that the opposing
parties have already hidden their assets. Subjects may have either taken the
money offshore or transferred it to other entities, such as their children's or
family trusts. Or they may have hidden it using another name, such as the
spouse's maiden name. Assets will be there nine times out of ten.
In 20 years of investigation, I have heard almost every story about how people
have lost their assets and now can't pay the judgment. Typical stories include: "I
went to Las Vegas (or Atlantic City) and lost it all gambling." "My wife and I used
the money to live on and spent it all." "My bookkeeper or accountant stole the
money." "I lost it all on bad business deals trying to raise the money to pay this
judgment."
You may have heard similar stories and found that the parties could not
document their claims. Let me offer a few suggestions that may show you where
the money has really gone.
Check to see if the subjects made large payments on their home mortgages
during the period of your lawsuit, especially in the last year of the lawsuit. Many
people try to hide their assets by paying on their mortgage and adding to the
equity of their homes which they believe to be "bullet-proof" in Texas because of
the homestead law.
Examine the payment of their universal life or whole life insurance policies. A
prepayment can accrue interest just like a savings account and doesn't show up
on financial records except inside the insurance policy itself.
Look for savings bond purchases, either in the subject's names, their children's
names or the spouse's maiden name. Until recently, these transactions were not
registered centrally and were a favorite purchase of money launderers and drug

dealers.
Look for cashier's check purchases in the bank accounts of your party. These
checks can be purchased and tucked away for the future just like cash.
When you bring opposing parties to depositions, instruct them to bring the kind
of documents that will help you and your investigator trace their financial history.
This is one of the most overlooked areas of discovery because attorneys
frequently don't understand the process of investigation.
Where a person went and who they spoke to or dealt with is often more
important than knowing about their business and where their money was when
those last financial statements and tax returns were filed. Sometimes the most
crucial evidence can be found by tracing certain activities. Timing of these
activities may prove that financial transactions were made to protect personal
assets.
The following key documents may reveal a person's hidden assets. They may
also help prove the intent of hiding these assets from the court.
PASSPORT
When you subpoena parties, request their passports in your motion to produce.
The entry and exit visa stamps will disclose trips to regions such as Switzerland,
the Cayman Islands, the Bahamas, Isle of Man, Netherlands Antilles and other
places. These trips may have been made to hide money
By documenting financial withdrawals from bank accounts and timing them with
trips to foreign countries, you can often discover offshore fund transfers.
For example, I know an accountant who made a trip to the Cayman Islands
every month with his scuba gear. It took US customs three years to figure out
his tanks were filled with $100 bills.
TELEPHONE RECORDS
Many smart attorneys request business or personal phone records but don't
think to include their subject's mobile or car phone records. Remember that
standard telephone records only record long distance calls. Mobile phone
records record all calls, local and long-distance, for billing purposes.
If you want to find an undisclosed business partner or a "significant other" in a
relationship, try subpoenaing the car phone records. Compare the numbers and
names on the bills against the people that are known to your clients. I promise
you will find some interesting information.
CREDIT CARD STATEMENTS
These records document out-of-town travel and often name people with whom
your subject has had dinner or done business-people that may well be pertinent
to your investigation. These records also indicate what hotel the subject has

stayed in.
HOTEL RECORDS
Hotels now invoice not only for the room, meals and drinks but also for the longdistance phone service. Calls are often made to those people the subject
wouldn't call at home such as an out-of-town banker, business associate or third
party.
CREDIT REPORTING AGENCIES
The trail of credit purchases follows us around the world. Like expense
accounts, a credit report lists where we eat, stay and make purchases. It also
contains a record of other business entities and banks that inquire about our
financial status. Credit card inquiries are one of the better ways to locate
undisclosed bank accounts, insurance policies and other major purchases.
AIRLINE TRAVEL
When questioning parties about their business activities and assets, always ask
for the name of their travel agencies. Once you have this information, another
subpoena can be sent to the travel agency to document all the trips made by the
subject.
TELEX
When investigating a company's assets, always consider the company's telex
records to find foreign business entities, foreign bank accounts and other
offshore activities. The monthly telex log or bill will point you in the right
direction.
OVERNIGHT PACKAGES
Almost all of us use Federal Express or a similar carrier to deliver our valuable
mail and packages around the world. Examining the monthly bills for a
company's overnight packages gives a clear idea of the cities and countries that
it is doing business in and can always add more information to the discovery
process.
All of the records listed are easy to obtain, particularly under a motion to
produce. If you find that the opposing party is unwilling or unable to gather these
documents, you should think about subpoenaing these records directly from the
sources that produced them.
In many cases, once these records have been requested, obstinate parties
suddenly become much more amenable to resolving financial issues and
settling their judgments. If they have anything to hide, they would much rather
settle with you, an obviously experienced investigator than produce these
records publicly for other creditors to find as well.
The next time you go in to postjudgment discovery, or if you want to find the
financial worth and assets of parties earlier on in a case, consider these ideas

and resources for your legal strategy.

Unmasking The Mystery Of Hidden Assets

BY KELLY E. RIDDLE
The thought of conducting a hidden asset investigation can send shivers up the spine of
many a good investigator. The word "hidden," almost conjures up a thought process that
the assets can't be found because they were intentionally hidden. Sometimes this is true,
while other times the assets are simply not in a convenient place for us to find them.
There are a variety of reasons for conducting hidden assets investigations and these
types of investigations are great for cross-selling. For instance, if you were hired to
check the activities of your client's spouse and you conclude that the person is having an
affair, you should suggest to your client that they conduct a hidden asset investigation.
This benefits your client by giving them a total picture of their assets and benefits the
investigator by providing more work. I have been involved in numerous cases where the
hidden asset investigation turned up more than one-million dollars in assets that the
spouse did not know about prior to the investigation.
There are a variety of other reasons a client may have you conduct a hidden asset
investigation. Most of the time, this is done in an attempt to satisfy a delinquent debt or
judgment. Insurance companies conduct hidden asset investigations, called
"subrogation" whenever they pay for the damages their insured received due to the other
party being uninsured. The insurance company then tries to locate assets to reclaim the
money spent to their insured. Businesses may conduct hidden asset investigations before
entering into business dealings with another company or person to make sure they are
stable. Regardless of the reasons, hidden asset investigations can be a good source of
income for an investigator.
During the initial consultation, many clients will often request that the person's credit
report be obtained. Obviously, this can't be done legally unless you have their written
permission or there are certain other criteria. At this point, you know that the client is
trying to determine what the person's financial picture is and I typically advise the client
that we can provide a "financial profile." Although we are unable to access their credit
report, other records can give you information about the person's financial status. For
instance, if you check the District Civil and County Civil records and find that the
person has several lawsuits against them for failing to pay debts or failing to pay taxes,
you can assume that this is a characteristic of that person. By building on this, you can
provide the client with an overall profile of the person's financial responsibility.
Conducting a hidden asset investigation is simply following the basic rules of
investigations. You have to start with the known information and work towards the
unknown. The investigator should also understand civil laws in their state to ascertain

whether or not time and money should be spent investigating other subjects who may be
hiding assets for the subject. For instance, is your state considered a community property
state? If so, the person probably would not hide assets in the name of their spouse as half
of the asset is already theirs by law (assuming they are trying to hide assets during a
divorce). Most states have guidelines regarding transferring property into another
person's name prior to a bankruptcy, judgment or other related civil action. Normally, if
the assets were transferred within six months to a year of the civil action, they are
considered part of the civil action. Part of the investigator's job is keeping the client
focused and reasonable. It is not uncommon for a client to provide a list of 20-30 people
they think could be hiding assets. Obviously, the cost to check each of these people
would be enormous and is probably futile. The investigator must therefore encourage the
client to provide only those names that are prime candidates for hiding assets and to
think of people in the subject's past that they trust. A lot of who the person uses to hide
assets depends on the value of the asset and the type of asset. If the asset is a large boat
or airplane, they may have the vessel taken out of service for maintenance and an
agreement for storage worked out with the mechanic. The person may have a small
amount of cash and this is typically given to a confidant to hide for them. Large amounts
of cash are placed in off-shore accounts, structured investments and related hiding
places.
The investigator should start with known information such as the person's current
address, name and social security number. All addresses should be checked through the
appraisal district to determine the actual owner of the property. If the subject is found to
own the property, the investigator should then check the records to determine if there is a
mortgage holder or lien holder listed on the property. Even if there is, a phone call
should be make to the institution to make sure that the note hasn't been paid off and the
property is free and clear. Remember that the first three numbers of a social security
number tells you which state the number originated in and therefore guides you to
another geographic area to investigate. I had a case where a bank loaned a subject from
Louisiana $750,000 to build a strip-center type mall. The subject never built the mall
and hid the money. I tracked the subject's asset trail all over Louisiana and Texas and
was unable to locate the money. While combing over the file for that piece of evidence
that would open the door, I realized I had skipped the obvious. I checked his social
security number and found that it originated in North Carolina. After conducting some
quick record checks, I discovered that he still had a mother and brother living in North
Carolina and soon located the bank where he had hid more than $500,000.
The person's movements will provide insight into where assets may be hidden. By
checking their social security number, driver's license history, determining where they
travel and related information, you may soon discover the location most likely used to
hide assets. Another useful tool is the good old tool of "dumpster diving." In a recent
case, we were hired to check the financial status of a subject that owned a real estate
company and a custom home building company. One evening, we gleaned through the

trash in his dumpster and found reports detailing all of the houses constructed over the
past three years, current construction projects, total expense, total profit, number of
properties listed by the real estate company, total revenue generated over the past three
years, a list of employees, telephone records and much more. Of course, the investigator
should keep in mind trespassing laws. In this case, the dumpster was in an office
complex readily accessible.
Public records should be researched for any clues related to assets and should include
the following:
1.District Civil records: Check for cases involving divorce, debts, judgments,
damages, auto accidents, business disputes and related cases. Even if some of
these cases are old, pull the file and research the enclosed information. In many of
these cases, the subject has to prove his assets or damages and provides financial
related information. In one case, I reviewed an old divorce case and found that the
subject raised Arabian horses. Armed with this knowledge and the Internet, I was
able to find his web site and determine where his current ranch and stables were
located.
2.County Assumed Name records: A check of these records will provide
information about any alias names or "doing business as (dba)." If you find a
listing for a business, review the actual record to determine what address the
subject used and if they listed any partners.
3.County UCC (Financial Statements): If a person obtains a loan and posts any
type of collateral, this information is often filed in the county financial statements.
If a record is found, pull the actual document to determine what assets were
posted. Next, follow up to see if the note was paid off and if the asset if free and
clear and still owned by the subject.
4.County Deed Records: These records deal with the purchase and sale of
property. However, in most jurisdictions, much more is included in these records.
Other information often-included in deed records include gifts, garnishments,
power of attorneys, liens, judgments, mineral rights, etc Even though the record
may indicate that the person sold the property, the investigator should take note of
who the property was sold to as this may be a friend who is being used to hide the
property. The bank involved should also be noted as this may tell you where the
person does most of their banking.
5.County Brand Indexes: Most counties require livestock brands to be registered.
One case that I worked was successful because I took time to check this index. I
found that the subject had a registered brand and I called a local feed store in his
area and was able to determine where the subject had his cattle. I drove to the area
and found oil wells pumping on the land. I took photographs of the cattle and the
oil wells along with all of the related equipment on the land.
6.County Tax Assessor: Check the tax assessor's office to determine any property
the subject may be paying taxes on, including automobiles. This doesn't

necessarily mean he owns the property simply because he is paying the taxes, but
logic would tell you that he has some kind of financial tie to the asset.
7.County Appraisal District: I use this to cross-check the information if the deed
records and the tax assessor's records. If property is found, the appraisal district
appraises the property's value for taxing. Be sure to check the record to determine
if the mailing address for the subject is different than the property address.
8.Local Police Department: Run a "name survey" through the local police
department for at least the past year. Ask for a list of every call associated with the
person's name. You may discover that police were called to a dispute at a rental
house or other location that the subject may have financial ties with.
9.State Comptroller's Office: The records will provide any businesses associated
with the subject, mineral and franchise assets, whether the subject is or was a state
employee and related information.
10.Secretary of State: The record will provide information related to any
businesses associated with the subject.
11.State Parks and Wildlife: A check with their office will provide any boats
registered to the subject. Additionally, the records will provide any information
related to any hunting or fishing license. The investigator should determine where
the person purchased the license as this may reveal a different part of the state
where they may have a ranch.
12.Federal Civil and Bankruptcy Records: A review of the records will provide
insight into the subject's financial responsibility. If a bankruptcy file is found,
review the actual file as information about credit cards, hobbies that produce
income and all other debts and assets will be listed. A quick phone call can verify
whether the asset still belongs to the subject.
Once the public records listed above are researched, other more specific searches should
be conducted. Several good web sites can be used and are good because they can
conduct state specific or nationwide searches. Some of these include:
1.www.knowx.com: This web site will allow you to search for stocks listed to the

subject, real property, bankruptcies, boats, airplanes, lawsuits, judgments, liens

and much more. Often, you will find information in other areas of the United
States that involve the subject and no other information lead you there. Once you
uncover a new location to search, you can zero in on specific records in that area.
2.www.iqdata.com: On this site, you can check real property, social security
numbers, drivers license, motor vehicles and more.
3.www.dnb.com: Dunn and Bradstreet has financial and biographical information
on companies and their officers.
4.www.pac-info.com: This web site provides access to property appraisal districts
throughout the U.S.
5.www.kelmarpi.com or www.kellyriddle.com: This is my personal web site that
has more than 100 pages of search sites available by topic. Go to the site, click on

record searches and then on "Internet on Demand." Click "yes" to download and
you will have more than 100 pages of searches at your fingertips. If you want to
search to see if a person has a boat, bankruptcy, criminal history, etc, this will
give you a list of sites used to conduct the topic search.
The investigator should recognize that any information obtained through the Internet is
an unverified source. It needs to be confirmed and correlated with other information.
Also, most of the information on the Internet is not designed to be complete and should
therefore be conducted in conjunction with public record sources.
Once these searches are done, you will have a pretty good idea of what you are dealing
with. The next step is to conduct searches outside the U.S. and/or bank searches. These
are very specialized searches and like everything else, can be done legally or illegally.
One legal way to determine a person's bank account is to create an alias name for you
such as XYZ Marketing. Then, open a checking account under that name and send the
person a check for $50 thanking them for trying your product or for entering your
contest. Once cashed, it will go through their bank and back to yours where you can then
look at the back and determine what bank they use and their account number. Foreign
accounts are very difficult and require great contacts to access. These can be very miss
leading as well. For instance, in many off shore areas, a person can become their own
bank simply by posting $20,000 with the government. All kinds of scams and hiding
places can erupt from this.
Hidden asset investigations are very complicated and time consuming. However, they
are not as complex as we are often lead to believe. The searches outlined herein are only
guidelines and many times, the investigator will reveal information through these
searches that require additional searches of action to be taken. Good luck and great
hunting!