Marriage is a relationship in which one person is always right, and the other is a husband.
- Speech is silver. Silence is golden.
Lighten Your Load With Laughter
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Monthly Archives: August 2010
How to Protect Your Own Assets
This final chapter (in two parts) in this series of protecting your financial assets will show you how the guy who cheated you out of your money is protecting his assets, which used to be yours. I will show you how to do the same thing to protect your own assets.
- Your assets-”Beyond the blue horizon”?
Two Questions
Every investigation or work of research must be cost efective. If you consider retaining someone to retrieve information (leading to asset recovery), you should ask yourself, What do I have to gain by spending this money, knowing that there cannot be a guarantee of success?
Another question would be, Why is this necessary — why do I have to go through this, in order to receive my just due?
Think ROI
Okay, if the answer to the first question is, “Thousands of dollars, and self satisfaction,” then you need ponder the answer to the second question but a moment: “Because the SOB is hiding or is about to hide his assets, and some of those assets (i.e., that money) used to be mine! Remember those italics, for we shall revisit the concept of timing and timeliness. For the moment, know that if you fail to act promptly to recover your just due, your chances for recovery may plummet to zero, or become so costly as to put the efforts out of reach for you.
As well, here is a pragmatic answer to the second question: The “authorities” are not going to do a thing for you, unless
(1) You are a famous person or
(2) A member of a powerful group or
(3) Can show fraud in the millions. Frankly, the police are way too busy to piddle around with your $50,000 bad debt!
Review
There is a difference betweeen concealing cash assets and protecting general assets. It is important that you understand and accept that dichotomy. Remember that there are two main reasons that people conceal cash assets: to evade tax, and to conceal the source of the cash. Only criminals need to conceal cash. When they do so, they are probably laundering the money. They are careful to leave no trail. Now here is a thought for you: If someone screwed you out of a bundle of money and left town, he or she is in one of two categories. Either originally with good intentions, but now really down and out, on the dole; or the person is a criminal. Retain someone (like us) to conduct a skip trace for you; if the tracer is really good, she can give you a good picture of which one you are up against.
Why You May Need to Protect Your Assets
On the other hand, there are many people who probably need to protect their cash — far from the maddening crowd of local banks and credit unions. If you have honestly amassed a net worth of a million or more, you should consult with a lawyer who is qualified to advise in the matter of asset protection. These assets may be in any form, from yachts and condominiums, to stocks and real property. (Remember when I was telling you how the bad guys hid their assets?)
If your profession exposes you to legal consequences, then in my opinion, you should consult an attorney with all haste. [I am a paralegal, and do not give legal advice.]
Consider the legal exposure in the medical, dental, and clinical psychology sciences, and yes, in the practice of law. While insurance carriers offer some protection in the form of malpractice coverage, there is no guarantee that
(1) The coverage will satisfy the amount of the judgment
(2) You will still be able to afford the premiums after the first insurance payout, and
(3) The carrier will still be there for you when it is time for it to pay.
The only person who will always be there for you is you. It may be true that the meek will inherit the earth, but until they do, it is your responsibility to keep what’s yours, yours.
No matter what your profession or occupation, from shop keeper to heart surgeon, you may at some point be exposed to a law suit for some kind of negligence. The first core element in a suit for negligence is duty of care. You help a person in distress to cross the street, a semi-tractor trailer driver blows his air horn, and the person you are helping craps his pants, or has a heart attack — or both. The person with the crapped-in pants and the whiffy heart sues you. The lawyer charges that you breached your duty of care (the second element of negligence), and as a result, the person you were helping has ruined britches and a heart condition. These are damages that can be quantifiable in dollars — the third main element of negligence.
And now you go, “Wha-a-a-?! That’s crazy!”
Yes, it is. But anyone can find an attorney to take any issue — no matter how frivolous — before the court. You would be required to appear in court to defend yourself. And who knows — you may lose! The plaintiff gets a judgment against you for, say, 2.5 million dollars. You appeal. That will take forever, or longer. Meanwhile, what you don’t know is that the plaintiff attorney had retained us to identify any attachable assets you may have. And of course we found them. They were in deposits in your local friendly branch. And in your stock holdings. And your real property.
UFTA
Another review: If you are informed of a pending suit against you, and you send, convey, carry, or electronically transmit cash to another person (and a foreign bank is a legal person), you may be exposing yourself to criminal prosecution. The Uniform Fraudulent Transfer Act, enacted in all the States, makes it a crime to convey (transfer) assets with intent to deprive past, current, or future creditors of the benefits of those assets. So, as the lawyers would say, the time to protect yourself is now. [I am a paralegal, and do not give legal advice.]
Ask Not For Whom the Bell Tolls
Remember that I alluded earlier to timeliness regarding your efforts to locate and recover your assets. One lady came to us (through her lawyer), because her husband had just presented her with divorce papers. They had been married for some 20-odd years, so she knew that he had over $2.5 mil in holdings. Then the attorney tells us that he has had the case for about 10 months. Crap!
The husband had offered her $25,000 in settlement. The woman was not stupid. She wanted a bit more. Okay, but the trail was stale. Eventually, we picked up the hint of a trail that led to the Bahamas. Our person in the Bahamas researched to the point where he located, if memory serves, about $100 k — out of two and a half million. Thousands of dollars of research later, he picked up trails from the Bahamas to other places…. You know where this is going, don’t you?
If an attorney has completed a protection transaction on behalf of your debtor, you would spend a small fortune locating the money, and another fortune trying to recover it. But hey, guess what: that attorney action could work for you, as well!
Next time: Islands in the sun.
How to Hire the Right People….
… To do all this for you. That is, to conduct research for skip tracing, asset locating, tenant screening, or background checks. Before I go any further, let me tell you about ad gimmicks like “Guaranteed Results”, and “No Find – No Fee”.
- If you don’t know where to look — where do you start?
How Much Is a Guarantee Worth?
Do a reality check before you hire anyone who guarantees results in any matter regarding human behavior. Think. How is that researcher or so-called investigator able to guarantee that he or she will find your Subject? How would a lawyer guarantee to win your case? Or — well, you see what I mean.
And why would anyone want to have worked for free if his search efforts failed? Same as taking your car in for servicing some problem, and see if they don’t charge you for diagnosis, if you don’t get the car repaired.
Researchers, information retrieval specialists, investigators — we all pay search expenses up front while attempting to locate a person or assets. We have labor and overhead to pay. Our time is precious; it is our stock in trade. We work for profit.
Pay the Piper — or No Music
When you deal with a professional service, expect to pay for it. The next time someone makes you an offer of guaranteed results, or no find, no fee, you may want to ask a few questions. Especially in today’s world, where bad guys run up debts, study how to evade skip tracers, and then escape and evade successfully. These are intentional, or hard skips. Oh, and remember the FBI’s Ten Most Wanted? So don’t let anyone tell you she or he can find anyone, anywhere, any time. Beware of operators who say that to you. You may wind up wasting your time or your money — or both. Most of us, when searching for a person, will tell you, first, pay me up front for a skip trace – around 200 dollars. If we cannot find the person within, say three weeks, then we can turn it into an investigation. Again, pay me up front, around $1,500. And be patient; it could take many weeks.
And you companies that ask people to go out and find your boats, trucks, cars and such for you. You expect them to do it at their own expense, call the recovery agents, and then wait while you decide whether, and how much you are going to pay them. If you actually have people working under those circumstances, you ought to thank your lucky stars! I marvel that anyone would even want to work for you.
Scope and Permissible Purpose
The scope is our search plan, our approach to gathering information. In our firm, we first review the paperwork provided by the client. That paperwork (the Request for Information, or RFI) contains all the data necessary to identify the Subject of the search. If the client cannot provide some information, we can adjust search efforts to recover it (and charge more). In this manner, we establish the scope. The scope relates to depth of history, and selection of sources and methods. The RFI also contains a signed statement of the Permissible Purpose for the intended search.
Permissible Purpose is a legal concept, established by Federal law (in the Fair Credit Reporting Act http://www.ftc.gov/os/statutes/031224fcra.pdf and elsewhere). The client is responsible for being familiar with the concept, choosing the appropriate Purpose, and for articulating it in the RFI. For example, we normally do business with law firms and business firms. One usable Permissible Purpose would be “Execute a judgment”; another might be “court order”.
If a consumer were to file, as Permissible Purpose, “I want to find the SOB and have him put in jail!” we would get a kick out of it, but we would not accept the case.
Locating Assets, Legally and Ethically
I once told a friend of mine, who is also an accomplished investigator, that I had experienced a turnaround time (TAT) on an asset locate case, of about three days. She went off at me, saying that this is not possible without pretexting, in violation of Federal law. You know what? She’s right about the law thing. But it so happened that the information retrieval specialists working that particular case in that state, had been working another case in the same state, and just piggy-backed the second one. Ordinarily, using appropriate sources and methods, the TAT — depending upon the state — is seven to ten days. Longer, depending upon the circumstances.
Pretexting in order to collect a debt is a violation of Federal law (Gramm-Leach-Bliley Act 15 USC, Subchapter II, Sec 6821-6827: http://www.ftc.gov/privacy/glbact/glbsub2.htm). Information researchers who work legally do so through contracts with various banking institutions, and are authorized receivers of certain information. The entire process is subject to audit by the Feds.
Now, you will hear people tell you they’ve been pretexting for years. And the point is? Well, some people have been speeding and ignoring red lights for years. And the point is?
Negotiate Services — Not Fees
No self-respecting professional will negotiate fees. Instead, she may suggest going with whatever services your budget will allow. Let’s say you and your attorney decide on a Skip Trace, extensive asset searches, bankruptcies, liens, judgments — the whole works. Okay, that whole works would cost you well over $2,000. Up front. No money no works. You happen to not have two grand to part with right now. No, I will not reduce our fees. Yes, I will suggest you go with, say, just the skip trace, or just a state asset search for now.
Since you asked, I will tell you that negotiating professional fees denigrates the professional service attached to those fees. If my credentials, education, experience, and training are worth $500 an hour as a security risk management consultant (and they are), what message do I convey if I charge you “what you can afford”, around 300 an hour?
Okay, just my opinion. What’s yours?
Shop Around
Examine credentials. Talk with each practitioner, and take notes. Always, always ask for brochures. If they have none, move on. Or if they have one that says nothing other than how great they are, move on. If they are working out of a post office box, move on. And remember, you do not have to pay private investigators’ fees to have online searches performed. People who conduct online searches professionally are technically information brokers. (Okay, we call ourselves Information Retrieval Services because the Department of Labor and IRS are happy with that title.)
Take your notes and brochures to your lawyer, and talk over your requirements with her. And don’t expect a competent professional to bankroll your case. She should ask for the money up front. Be really careful about private investigators who agree to take your case on a contingency fee. In most states, that is illegal. If that PI gets summoned into court, you are toast, T-O-A-S-T!
Compare and contrast. When you hear a fee set for an investigation or online searches, ask what you get for your money, and how long it will take. All this should be in writing, available upon request. Then compare that cost with at least a couple of other firms — along with what they offer for the money they charge. Here’s a recent example of how that should work.
Two weeks ago, an attorney-client asked me to verify official information in a European country, and to just send him a bill. Okay, but I don’t work that way. I made a preliminary inquiry of a trusted, precious source in that country. Within 48 hours, I had an official answer with directions on how to obtain the required information. I told the lawyer about it, at the same time mentioning that his client could follow the instructions himself. If he retained me, I would charge $400. The lawyer told me later he shopped around, and found one other person who said he would do the same thing — for $5,000!
So what do you think — should I raise my fees?