Asset and Bank Searches: Liquid, Tangible and Intangible Asset Investigations

What can be searched and when?

As a licensed private investigation firm, we are regularly asked by our clients to conduct asset investigations on a particular subject, whether an individual or a business entity. These requests are usually in one of two categories: a request by an attorney to investigate the assets of a party against which they are considering filing suit, or a request by an individual or attorney to identify the assets of a party against which they hold a court-issued judgment. We handle these two scenarios differently.

Our access to personal financial data is restricted by a number of Federal and state laws, linking back in many cases to the Fair Credit Reporting Act of 1970, but with several more modern additions, such as the Driver Privacy Protection Act (itself an amendment to the Violent Crime Control and Law Enforcement Act of 1994), and in particular Title V of the Gramm-Leach-Bliley Financial Modernization Act (GLBA) of 1999 (PDF here).

When we engage in a search of personal data through a professionally restricted data source, we as investigators must adhere to the provisions of these laws and, in the case of the GLBA, certify not only that our use of the data is permissible under law, but that we act to maintain the security of the protected data by guarding against its dissemination to a third party unless the receiving party is also permitted to a GLBA exception — that is, unless our client’s use falls under what have been defined as permissible uses, or exceptions to the GLBA’s requirement to guard against disclosure of nonpublic personal information. Broadly, these exceptions include disclosures at the direction of (or with the consent of) the consumer, disclosures necessary for maintenance of consumer financial accounts, certain disclosures necessary to facilitate a proposed sale, merger or similar business transaction, and disclosures to “persons holding a legal or beneficial interest relating to the consumer.” Similar restrictions apply for searches of assets of organizations or businesses.

The net result is that liquid assets cannot be searched without a judgment, as in the first scenario above, where we are asked to identify assets of a party who may be named as a defendant in a civil action. Without a judgment in place, detailed bank account and asset account records are off-limits (particularly identifying details like account numbers). However, some information can be shared in a consultative capacity to help an attorney identify banks or accounts to pursue further through subpoena.

These restrictions don’t apply to the other types of asset investigations we can conduct to identify physical (including intangible) assets. These physical asset investigations can be focused on a range of asset types, including real property, motor vehicles, pleasure craft, aircraft and similar possessions. It is also possible to identify intangible assets which may have monetary value if liquidated, such as trademarks, patents and Internet domain names. Our asset searches also typically develop information on the subject’s employment, professional licenses and business registrations, and commonly return additional useful background information on the subject such as bankruptcies, prior judgments and liens. An investigation of this type can be freely conducted and results shared because the information is based on public records.

Asset investigations may be used both to identify assets for liquidation to satisfy a judgment or, in many cases, to identify assets which an individual has fraudulently attempted to conceal. For example, an individual planning to file bankruptcy may wish to protect certain personal assets from the bankruptcy trustee (for example, by selling property to a relative a year or more in advance of their filing). Or, in the case of family law, a “deadbeat” spouse seeking to avoid payment of child support may use a similar fraudulent transfer of property. (These types of attempts to conceal assets are discussed in this Association of Certified Fraud Examiners article in greater detail.)

A corollary to this discussion of bank searching and credit searching is access to credit reports, which is generally controlled under the terms of the Fair Credit Reporting Act and subsequent amendments. We can obtain this type of information about a debtor when seeking to satisfy a judgment; without a judgment, this information can only be retrieved with the explicit consent of the subject. It’s important to not confuse a “credit report” with a “credit header”, which contains personal identifying information such as name, date of birth and social security number, but not credit history. We may have access to credit header information, but only as part of a broader investigation for which we have established a permissible use.

At the end of the day, we operate within the bounds of applicable state and federal information privacy laws for two very good reasons. Firstly, we would jeopardize our Private Investigator’s license if we did not. But secondly, and importantly, our work product – written reports and/or testimony to support the information we retrieve and the processes we use to retrieve it – needs to be developed by the rules if it is to be admissible in a court of law, which is the standard of care we set for all our investigations.