Investigation and Security Blog

Challenges for an Investigator in Finding Hidden Financial Assets

top-10-hidden-a_53046936 Hidden Financial Asset Challenges

Hidden Assets are often an issue in litigation proceedings especially involving The Bankruptcy process as intended to allow debtors to reorganize and to establish a plan to repay creditors, or enable an orderly liquidation of the debtor's property. Often, debtors are tempted to hide or not disclose assets in order to avoid losing the asset to creditors. Effective searches for these assets require background investigations on the subject's ties to other people and businesses.

Uncovering Hidden Asset Top 10 Hiding Places

10 - Mechanic's liens to pay down asset - Reviewing the Uniform Commercial Code (UCC) filing payment history may reveal abnormally large payments. If permissible under the Fair Credit Reporting Act, checking the subject's credit history may uncover these transactions.

9 - Using defunct corporations as hiding places - Old business names requires checking for existing ownership of assets like boats, vehicles, and property. Just because a business entity is inactive does not mean it can't be used to conceal assets. State Corporations permissions can be found online.

8 - Limited partnerships, stockbroker accounts, offshore/foreign accounts and even overpayments to the IRS may include these complex camouflage methods. Limited Partnerships can be used in the names of relatives or business associates. These can be found with the statements from other accounts as you try to piece it together or following the money. Sometimes you need to go through trash or interview people, other times social media or phone accounts and emails will lead the way. Doing phone or computer forensics to see who they associate with or even looking at call records. The overpayment to the IRS is the hardest to find because the IRS doesn't make it available. If a tax return is provided then maybe you could compare payments versus what is owed.

7- Shell Corporations and businesses true ownership - Obtaining a full litigation history on the target and checking civil lawsuit databases may assist in navigating through this maze. Working with your client's attorney and a Certified Public Accountant is always a must because identifying the subject's own accountant will provide additional help to your legal team. These CPA and stockbroker professionals can be deposed for detailed information.

6- Life insurance policies, annuities, prepaid cards or home mortgage paydowns - All are mundane places to hide money and easy to find, however, if the bankruptcy trustee appointed finds any of the hidden assets by way of reviewing your debts, public record searches, online asset searches, payroll slips showing deposits into unlisted bank or retirement accounts, or bank records and tax returns, then the bank trustee will file a lawsuit denying your discharge from the bankruptcy proceedings.

5- Purchases of cashier's checks, and traveler's checks - Will require a subpoena of the target's bank account to produce copies of checks for large amounts paid in cash to the bank. Then they need to cross-check against the teller's work for that day which will reveal any money orders, savings bonds, cashier's check and/or traveler's checks issued. In addition, a subject's payroll stubs can reveal the details of how much and how often these transactions take place.

4- Money orders of large commercial retail stores - Will need surveillance of the target involved at the locations. This is an excellent way to hide money and it is very portable.

3- Savings bonds - Can be subpoenaed on the bank of record for the money orders or on the postal money orders which can be time consuming but necessary. Purchases of savings bonds will probably take place at the subject's local bank.

2- Collectibles and safe deposit boxes - It will be traceable in a court order very easily because the institution must reveal and make it available. Be careful that it is not listed in either a relative or business associates name because most are listed in the company name or your name. (SEE #1 BELOW) Collectibles can be revealed either through social media because target's bragging and/or ebay for examples.

1- Subjects placing assets in a nephew, cousin or associate name - The investigator must then acquire a proper subpoena for all records. Be on guard for policies taken out in relatives' names. 

Mergers and Acquisitions (M&A) Due Diligence

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