Asset Searching for Recovery Actions – The Decision Maker’s Critical Tool Part 1

As certified fraud examiners (CFE), we all know the nuts 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 asset research for over 14 years for such demanding institutions as FDIC, FSLIC, and RTC, as well as major hotels and casinos in the gaming industry, property management firms, and many of the nation’s larger law firms, one thing that has emerged is a distinct lack of information – not about the type of items searched, but the depth and quality of other searches. In cutting to the chase, the following is the result of the compilation of asset search guidelines, and should serve to assist in setting at least a baseline standard for developing a viable domestic asset search strategy.

Subject Identification

Prior to beginning the acquisition of information on any subject of an asset search, the subject should be properly identified. Studies have shown that as much as 30% of the American population uses undisclosed aliases and/or “akas” to conduct and transact various levels of personal and professional business. This statistic does not take into account the existence of corporate, DBA and/or partnership entity names, which are created to transact the various forms of business on behalf of the principals of said entity. To properly identify a non-corporate subject, the following minimum recommendations are made for non-law enforcement environments: Obtain credit reports from the three major credit bureaus, per Fair Credit Reporting Act (FCRA) requirements.

However, make 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 asset searches as recovery medium, and the basic assumption is that the asset 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 where consent has been given somewhere in the stream of the creditor/debtor relationship. In the case of a receivership institution
(i.e., where a director is being scrutinized for alleged conversion of assets), consent may also 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 where a criminal investigation is under way, and where the conversion of assets is factually alleged as the result of a forensic audit or proven 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 available 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 when accessing them:

* Obtain social security traces from the three major credit bureaus.

* Obtain address update/credit report header information from the three major credit bureaus.

* Obtain voter registration information for the applicable jurisdiction germane to the primary, or most recent, residence of the subject. Some states have compiled voter data through private repositories, which should be checked for movement.

Match the information obtained through the independent sources to the information presented by the candidate in the form of the credit application with
the institution, and/or the information developed independently by the institution in the initial credit qualification process.

Many other methods of identification exist, but the above represents the very 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 asset searcher in determining whether to advise the client to proceed with asset discovery in additional areas unknown to the client at the time the asset search was requested.

Address verifications are usually difficult without a physical inspection 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 usually presented in an asset search, and in most cases is very reliable.

To discover the current telephone number of the subject, methods available to the fraud examiner include nationwide telephone directories, criss-cross directories, directory assistance contact, and attempts at contact existing telephone numbers known by the client. There are other methods of telephone number development available. However, these methods should not be utilized by a CFE in order to avoid tainting the legality of the pursuit, in the even that litigation is ultimate undertaken.

Assets Determination

Assets determination usually 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 identifying and analyzing real property assets. There are multiple forms of asset determination, which are described as follows: Real

Property Ownership: A search should be conducted of the applicable county jurisdiction. The exception is in California where a statewide assessor’s index is available, usually through the “lien date” of the prior year. This repository is made available 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 known property (address) crosses-verifies to the suspect owner.

A search of the applicable jurisdiction’s Recorder’s Grantee/Grantor index (or general index as it may also be known) is then undertaken to determine if the property is still vested to the subject, and if any open Deeds of Trust and other liens exist which identify liabilities against the property. The search in the recorder’s venue should also identify (in jurisdictions where this is possible) the
Documentary Transfer Tax Stamp amount, which should be divided by the applicable factor.

This yields a sales price for the property, which should then be scrutinized by contacting a local realtor to verify the current market value. This “thumbnail” market value determination would then be subtracted 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 updating the assessor’s rolls through the recorder’s offices to determine if the subject’s name has come into title to additional parcels of property, subsequent to the “lien date” of the assessor’s records, which is in many jurisdictions up to sixty to ninety days old.

The searches in the recorder’s offices should also identify recent transfers of ownership of an individual’s real property, wherein the ownership may have been transferred to a family member, closely held corporation, or other 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 asset searches are usually requested on specific names of individuals, and it is an industry standard of practice to conduct the research on the specific subject name. Competent investigative agencies contact the client in some way to disclose additional names discovered during the searches.

Searches should also include information developed on real property assets jointly held in the name of the husband and wife. This information is usually indexed by virtue of the husband’s name, or the first name that appears on the conveying deed.

It is important to understand that an asset search does not automatically search property held in the name of a wife unless the asset search is specifically ordered on the wife’s name. If so, the wife’s name would then be included as a primary search name (parameter), and assets held in the wife’s name would then be covered. Quite simply, an asset search on a husband should usually also reveal information on spousal assets held jointly, but not necessarily include assets held by the wife individually or as sole owner, or under different 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 owned 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 vehicular ownership rests with a county or parish jurisdiction. Where states will not provide this information, the applicable jurisdiction or jurisdictions should be researched to determine if vehicles are owned by the name given as primary search parameter. It is also important to understand that most assets search requests are not only based upon single name searches, but usually single jurisdiction searches as well.

Some examiners may feel justified 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 asset to the subject. Many times vehicular, vessel, and aircraft assets are not identified through standard search parameters, but are identified if the subject may have the asset registered in a different jurisdiction; if the asset may be registered under different name; or if the subject may be a guarantor on the loan.

Vessel Ownership: There are three possible forms of accessing vessel ownership information. The first 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 asset search to be conducted, one or all of these methods should be utilized.

Aircraft Ownership: Other than by “intelligence” information which may have been submitted to the institution at the outset of the credit qualification process, the only method of developing aircraft 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 aircraft registered in his or her name within 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 makes this service available. The service is resold through other database repositories, yet it is advised that the “root” repository be utilized in order to minimize data transfer/loss from vendor 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, other 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 asset search, in that the ability to successfully identify banks rests heavily with the fraud examiner’s prowess in this arena.

The standard guidelines for bank account searches are “exact name basis only” searches, with less emphasis placed on jurisdictional lines, since most bank account searches are developed via intelligence leads. In many instances, an asset search will refer “no record found” to a banking institution under an exact subject name.

The subject’s name may appear as a signatory on an alternate account, possibly under the name of a disclosed or undisclosed entity, or as a signatory on an account held under the name of another. Bank accounts will not usually be disclosed in this fashion. Unauthorized information pertaining to a no searched consumer could compromise that person’s privacy under federal privacy laws, the FCRA and the CCPA, as well as many other statutes.

It is safe to say that most agencies are quick to obtain at least some banking information. This should rest with the successful Write of Execution language, constructed by counsel as served upon the institution’s regional administrative and/or corporate offices (for examples send a request to [email protected]).

In Part 2 of this article, we’ll look at other financial and business information that should be gathered during an asset search, liability-related data which impacts the subject’s net worth as well as other information.

How to Develop the Winning Mindset of a Successful Home Business Leader

Some say leaders are born, but I know from personal experience with members of home business teams that leaders can be developed.

Ask any military person with experience and you’ll find there is extensive, ongoing leadership training through systematic programs. We’ve all heard of “Boot Camp”. Where the raw recruit gets a first taste of the discipline needed to become a successful soldier, sailor or airman.

There’s a parallel process that needs to take place for the first-time business owner. There are foundational basic skills needed for entrepreneurial success. And the person making a transition from being an employee may not – YET – have these skills.

At first you may feel disoriented or out of your depth when thrown in at the deep end as many business programs do. But after a period of adjustment and training, attention to detail, following direction and focused effort the fog begins to lift and clarity emerges!

In the military you’re not just left to sink or swim. There’s a hierarchy of support and personnel in the organization to help you get in shape for your role.

In a good home business you should expect a similar hierarchy of support from the company, your direct sponsor and other leaders in your organization. For example, my new team member gets direct “fast start” introductory training at the equivalent of our “boot camp”.

With weekly basic, intermediary and advanced level training you can progress and learn the business at your own pace. Just as with any “intake” of new recruits there’s a wide variety of skill levels and application apparent. it does not take long to identify the rising stars from the average Joe or Jane.

So how do you separate yourself from the pack and develop as a leader?

1. Focus – follow the plan laid down by those with a track record of success. Don’t reinvent the wheel and don’t get distracted.

2. Consistency – do something every day to move your business forward. Develop momentum.

3. Understand the “winners edge”. It does not take much to do more than most people do. Make the extra effort.

4. Never quit. Keep at your business despite setbacks. Don’t give up on your dreams and goals.

5. Invest in yourself. Take the time to develop your business and financial skills. Hold on to a positive mental attitude of success.

6. Set yourself measurable stretch goals. An initial goal to earn 2 times your current job salary is a good starting point.

7. Associate with other leaders in your organization, model their success.

Perfecting the Art of Closing

In sales, this process is referred to as “closing.” Since “closing skills” derive themselves directly from the sales industry, I’m going to discuss them within a sales context, but bear in mind that these skills are universal in their application and value.

It is typical for a novice persuader to encounter resistance. There are as many different reasons for resistance as there are personalities, so the trick lies in knowing which closing skill to use for which person. A crucial closing concept to learn as soon as possible is that you should actually employ closing strategies throughout your entire presentation. Most people think of the close as the final wrap-up. While this is the sales point where the deal is formally and openly acknowledged as “let’s do it” or “thanks, but no thanks,” the masterful persuader builds the close in stages throughout the entire sales process. The last phase of the selling exchange is only the culminating step of several deliberate but less evident steps that have taken place beforehand. It is crucial, not only for your own good but also for your prospects’ good, to help them through this process. Incrementally moving them closer and closer to agreement is much more effective than springing it on them at the end. There is nothing worse than seeing a shocked prospect with her/his mouth wide open following the close. Waiting to lunge with your close until the very end of your sales presentation could be compared to plunging unprepared into the deep end of the pool versus wading comfortably from the shallow end to the deep end only as you feel well prepared, well informed and well instructed to do so.

The incremental close helps avoid the old hard-close approach of the past. Remember the hard close? Old tactics used such strategies as bullying, pressuring or forcing your prospect into a decision. We’ve all experienced the hard close at one time or another. Unfortunately, some “persuaders” still employ the hard-close strategy, but when they do, they’re really not persuading at all. Even if a prospect succumbs to one of these sales tactics, it is likely with resentment, buyer’s remorse and discontinued business in the future. What’s more, you can rest assured that unbeknownst to the offending salesperson, a prospect who is bullied into a sale will deter all her/his friends and family from patronizing the business where s/he endured such treatment.

Since studies show that how you open a sale is more important than how you close it, think of starting your close earlier on in the persuasive process. Let’s call this “collecting yeses.” We’ll discuss this concept more in-depth later on, but for the time being, what it basically means is that you concern yourself with drawing in your prospects early on. That is, you warm them up in stages until the ultimate conclusion is obvious to them and they decide for themselves exactly what you were hoping they’d decide in the first place.

Because you’re going to focus on closing as a process that begins early on in your presentation, it is important to consider the messages you are broadcasting right from the beginning. Superficial or not, people are going to draw conclusions from their earliest interactions with you, and those first impressions tend to be the longest lasting, too. It is said that the first and most lasting impression is made in about the first four minutes of a first encounter. Hence, be sure those first four minutes are positive ones because the cement dries fast! It is extremely difficult to overcome a bad first impression. Even if you try to make up for it later on, that first impression will linger. The most obvious advice is to be sure you look professional and well groomed in any persuasive situation. In other words, dress appropriately for the setting. Next, exude confidence that is not arrogant but rather is upbeat, positive and encouraging. This positivity in your demeanor will allow your prospects, who hardly know you, to take comfort in your ability to educate them about the product or service they are investigating. Direct eye contact and a sincere smile accompanied by a firm handshake and addressing your prospects by name always help.

I have identified what I call the “Three Rs” for solid closing. After the first impression, your next focus is to effectively weave your close throughout the entire presentation. That is, the three Rs are at work throughout your presentation, aiding your prospect in becoming more and more inclined to buy. These three Rs are reason, resources and representative. Let’s look at the first R. “Reason” must be viewed from two different angles–first, from your prospect’s and then from your own. Early on in the persuasive setting, seek to understand exactly what your prospects’ needs are. That is, determine what their reason is for coming to you or listening to you in the first place. Then, you have to give them the reason to buy. Essentially, their problem and your solution match. Do not fall into the trap that many rookie salesmen do of spouting off a laundry list of features, benefits or all the reasons why you think they should buy. This sales strategy is useless because your prospects have come to you with their own reasons for buying already in mind. If you talk too much about what you think the reasons are to buy, you’re going to talk your bewildered prospects right out of the sale. When the sales representative talks too much, s/he sucks the emotion right out of the sale. It is draining and frustrating for prospects to hear a salesperson’s incessant babble about all of a product’s bells and whistles when they just want their own key questions answered.

There is a great story that illustrates the importance of your reason to buy ringing true with your prospects’ reasons to buy. A gentleman by the name of Airman Jones was assigned to the induction center, where he advised new recruits about their governmental benefits, especially their GI insurance. It wasn’t long before Captain Smith noticed that Airman Jones had an extremely high success rate, selling insurance to nearly 100 percent of the recruits he advised. Rather than asking him about his successful track record, the Captain stood at the back of the room during one of Jones’s presentations and listened to Jones’s sales pitch. As he presented, Jones explained the basics of GI insurance to the new recruits and then said, “If you are killed in a battle and have GI insurance, the government has to pay $200,000 to your beneficiaries. But if you don’t have GI insurance and get killed on the battlefield, the government only has to pay a maximum of $6,000. Now,” he concluded, “which group do you think they are going to send into battle first?” The resounding secret to his sales success was that Airman Jones gave the new recruits a compelling reason to buy.

The second R of solid closing is “resources.” Resources cover all those things that factor in to whether or not your product is appropriate for your prospect. Resources would include time availability, financial backing, support from family, physical ability, etc. For example, investing vast amounts of time and energy into selling annual ski passes to nursing home residents would not really be giving wise consideration to such prospects’ resources.

The third R of solid closing is the “representative.” This is where you, as a person, factor into the selling equation. How readily can your prospect feel a strong rapport with you? Is there an instinctive sense of trust? Does your style rub this person the wrong way? Whether you realize it or not, you are a part of the selling package. There have been many times when a prospect walked away from a sale, not because of the product–in fact, the product might have been just what s/he was looking for–but because of the rep s/he had to deal with. Be sure you conduct yourself in such a way that your prospect can like you. People buy from people they like. They don’t buy from people they don’t like. It’s that simple.