Generally, an asset search investigation is requested to determine a subject’s assets- quite often to satisfy the court that there are no other recoverable assets when injuries exceed insurance policy limits, or, unrelatedly, to determine financial stability of a prospective partner or employee, (the latter in a position of fiduciary trust).
A basic checklist for the legal professional is to:
1. Relay the need-to-know reason to your investigative specialist. A business partnership dissolution v. a medmal case requires a very different investigative focus.
2. Obtain as much lead information from your client as possible. The more information the investigative specialist is given, quite often, the more she can return and, in a more cost-effective manner.
3. Recognize that (still in 2020) that locally-maintained governmental records are often more reliable than those compiled into general databases. The first step in recording any asset begins at a local level. Many information companies provide “nationwide” database information. However, the drawbacks to commencing an asset search through a “dumping ground” database basis first, are
a) records update lag time (information can be as old as 18 months+),
b) incorrect data collection errors (many nationwide databases can return results only with exact names – misspellings will often register “no hit” status) and
c) incomplete information.
Another aspect of an asset search is a true analysis of assets acquisition and dissolvement. For e.g., a real estate asset search may return with a negative hit for current property ownership but check the sale dates of the subject’s latest residences. All too often we’ve come across a recent home sale, leaving the subject with a large sum of money, that will not show up in a current real property search. Always pay attention to timelines.
So now you, the attorney, have the subject’s tangible assets information. The subject owns a CPW pied-a-terre, a home in the Kensington section of Great Neck and a boat docked at the Huguenot Marina. The next step, from an investigative standpoint should be to determine if the subject has any liens, judgments, bankruptcies and other pending litigation- if a judgment is entered against the subject, you will want to know if you are Number 1 or the tenth in line to collect. We suggest also conducting a full criminal background check on your subject, especially if fraud or embezzlement is suspected. This may not be your subject’s first illicit activity rodeo. Often, if law enforcement and a DA’s office has been involved, there may be valuable information to gather (such as the subject is currently on parole).
So how far is far enough with an asset search? Assess the potential settlement/judgment. For a large settlement/judgment, request a full background and asset search (certain convictions can prohibit a person from holding officer position in a business); medium settlement/judgment: basic background and asset search and for a small judgment: a basic asset search.
As always, be safe.