Why do individuals go to such great lengths to hide their assets?
The reasons are endless—defendants in divorce proceedings may try to hide their wealth to avoid losing part of it to their former spouse. Funds embezzled by nefarious corporate officers can be recovered by “following the money.” Even corporations may engage in asset searches as a form of due diligence, to make sure potential business partners are as wealthy as they claim.
In a number of cases, a plaintiff may have won a monetary settlement for their client, but the defendant is not forthcoming with payment. Plaintiffs who receive civil judgments entered in their favor can get a court order to garnish the defendant’s wages, place a lien on the defendant’s property, or seize the defendant’s bank accounts and assets. However, these options all require the same thing: the plaintiff must identify the defendant’s current employer, assets, or bank accounts. This is by no means an easy task.
Comprehensive Asset Searches
A good asset search needs to identify and uncover all possible methods of wealth concealment. This requires comprehensive searches of property records, mortgages, financial filings, employers, bank accounts, and even transfers between family members and friends (in the lead up to a civil judgment, defendants may transfer money and property to trusted friends and family). Some high net worth individuals can even require forensic accounting work and a team of international investigators to unravel a global web of shell companies.
Open Source Databases
Commercial databases can yield information pertaining to an individual’s ownership of property, vehicles, boats, and even corporations. Additionally, county tax records can contain extensive records of property ownership and land values. However, the traditional approach to asset searches risks missing vast amounts of wealth subjects are skilled in hiding. In addition to several commercial databases, open source databases can uncover additional holdings that commercial databases miss. For example, an open source database of boat ownership, maintained by a local yacht club, may disclose the defendant’s maritime assets. Leaks of financial data, such as the Panama and Paradise Papers, have also uncovered vast networks of offshore accounts and shell companies—popular techniques for high net-worth individuals to hide assets.
Social Media Investigations
In one case we worked on, an individual we were investigating told our client they had little to no assets remaining after litigation. Initial research revealed the subject had taken great pains to hide their property holdings through a Limited Liability Company (LLC), which are notorious in the asset search world for their anonymity. Some states (such as New Mexico) waive traditional corporate reporting requirements of officers and ownership in order to establish a truly anonymous entity within which to hide assets. Therefore, investigators looking into the ownership and asset holdings of LLCs can face problems conventional research methods cannot solve. However, one avenue of research often overlooked is social media. Our investigative team, utilizing the intelligence communities’ best practices , discovered a social media profile for the subject, which featured a photo of an expensive new car they claimed to own.
The Extra Mile
When it comes to conducting asset searches, the more comprehensive the search the better. Solely focusing on database searches and “check the box” approaches paints an inaccurate picture of a subject’s asset holdings. Going the extra mile by pairing commercial databases with open source and social media research can provide a proverbial, and literal, wealth of information.
Ryan Lefler-Moore is a Senior Associate at Prescient. He holds degrees in International Relations, Economics, and Political Science.