All posts by Joe Dickerson


Where can you hide and grow substantial assets with very little, if any, chance they will be detected?

Typically, investigators and attorneys are going to search for corporations, LLCs, and partnerships associated with their judgment debtors. When found, these entities are then searched for bank accounts, other assets, and real estate. There’s really nothing new or exciting about this age-old standard operating procedure. Every rookie investigator or first-year associate attorney knows how to use this process to trace and recover assets. In fact, failing to do so may well be malpractice.

Few, if any, investigators or attorneys are going to even search for assets in the name of a corporation that has not been “active” or in “good standing” for 3, 5, 10, or 15 years. Such searches are seen as a waste of time and resources. No person in good mind would put assets in an entity with no asset protection. Actually, assets have been hidden in these noncompliant entities for years because—nobody looks there, except a few of us out-of-the-box thinkers, a.k.a. “rebels.”

In the last ten years, we have recovered from a few hundred thousand dollars up to over $2.5 million, from such non-compliant entities. In the latter case, one of my favorites, we recovered from a Wyoming noncompliant LLC that had a noncompliant Wyoming corporation as its managing member. We recovered a “homesteaded” ranch, along with cattle, oil and gas royalties, rental property, and cash in the bank. We were not chastised for coloring outside the lines. Never assume that the bad guys are playing by the rules—they often are not, and it’s your job to recover their ill-gotten gains.


Most consumers have no idea what the Mortgage Electronic Registration System (MERS) is, but it is estimated that one out of every two loans in the United States are “owned” by it. And it has also become a tool used by debtors to hide their assets. If you have debtors that invest in mortgages, you need to know about MERS.

MERS is a legitimate private US corporation that solved one very expensive problem: how large amounts of mortgages can be bought and sold by investors without generating the fees charged by counties to record the change of ownership. A large group of loans could incur thousands, if not hundreds of thousands, of dollars in recording fees, every time an investment in a loan pool is made. MERS neatly solved this by simply operating an electronic registry. Transfer your loan into it, and MERS is now the nominee owner. You’re free to buy, sell and transfer your loan to other investors within the registry, without having to record the change of ownership with the local County Recorder. The Federal Government has backed the system as a way to create a liquid market for investors.

However, some state County Recorders have started to fight back. They are claiming MERS is nothing more than a work-around to avoid the proper paying of recording fees that are used to support the records office.

We have also seen cases where debtors use MERS to hide their assets by making sure their ownership is not publicly recorded, and they have then failed to disclose their ownership of these assets. The good news is that once we have identified debtors that are involved with MERS, we now have a decided advantage for uncovering current ownership and proving fraudulent transfers: the MERS system itself!

It is important to know that each loan transferred into the MERS system is assigned a Mortgage Identification Number (MIN), and will have this number for the life of the loan, no matter who the current owner is. Once we build the master list of loans owned (past or present) by the debtor, we follow the ownership transfers by date to develop the status of an investment pool. Post-judgment transfers can also lead to other entities that are sheltering the ownership of the assets for the debtor that we may have not known existed.

So be aware that MERS is an effective tool that a debtor can use to hide assets, and that it is an even better tool to use for recovery.


Mr. J. is an entrepreneur in the United States. His ‘chief fundraiser’ for investments in the U.S. is a Columbia businessman who, according to informed sources, is under international investigation for narcotics trafficking and money laundering.

Mr. J. is friends with a U.S. citizen who owns an offshore insurance company. Mr. J. purchases insurance using money placed with his U.S. company for investments by his “chief fundraiser.” The premium is $1 million. The premium is treated as a business expense, thus a tax deduction.

The money laundering, loan stacking, and tax fraud is now underway – it works as it follows:

Mr. J. now borrows $700,000 from the insurance company – loans are not taxable income. He then pays another insurance premium of $700,000 and borrows another $490,000 from the offshore insurance company. He then pays a $490,000 premium and borrows $343,000.

The sham transaction, without a valid business purpose, represents a tax saving for Mr. J. of nearly $800,000, depending on his total effective tax rate. Thus, Mr. J. keeps in pocket a total of more than $1.1 million – $343,000 from the last loan plus at least $800,000 in immediate savings from the more than $2 million in deductions in exchange for a total outlay of $657,000 to the “insurance company.” The insurance company could show the loans as account receivables, an asset, on its books so it could remain adequately capitalized for the offshore insurance regulators.

Mr. J. may decide to retain the proceeds rather than pay a return to the Colombia investor. The investor could be told by the “chief fundraiser” that their money was lost in investments that went bad in the U.S. If the investment funds were the proceeds from low-level narcotics trafficking, to whom are they going to complain?

Note: the loan stacking and tax scenario were taken from a filing in a civil case that has been ongoing for at least four years.

7 Critical Mistakes Judgment Creditors Make Attempting to Collect Their Judgment – Mistake #7

There are seven critical mistakes judgment creditors make when attempting  to collect their judgment. We’ll be discussing each mistake in detail … and how to correct it. Last week, we covered mistake #6: Failure to Ascertain the Psychographics of the Judgment Debtor. Now, let’s identify the problem we are dealing with this week.


Since this month we are addressing the 7th of the Seven Critical Mistakes Judgment Creditors Make Attempting to Collect Their Judgments, let’s start by reviewing the first six we have discussed in some detail over the last six months.

  1. Not Understanding that the Court Does Not Make the Judgment Debtor Pay the Judgment
  2. Conducting a Debtor’s Exam (Deposition) of the Judgment Debtor as Soon as the Judgment is Entered
  3. Expecting the Judgment Debtor to Actually Appear for the Deposition, Tell the Truth and Produce the Subpoenaed Documents
  4. Expecting to Find the Pot of Gold at the End of the Rainbow
  5. Attempting to Collect from a Judgment Debtor that has No Assets
  6. Failure to Ascertain the Psychographics of the Judgment Debtor

Having the appropriate members on the Judgment Enforcement Team is, without a doubt, the most important thing a judgment creditor must address aside from actually obtaining the judgment.

Addressing the first six mistakes are important and should receive appropriate attention, but that is of no consideration if the appropriate members of the Judgment Enforcement Team are not on board.

There are many excellent litigation attorneys who can take the facts of your situation and present them to the trier of facts, be it a court or a jury, and if the law supports your position, win an appropriate judgment for you. This does not mean those attorneys automatically have the necessary skill set and experience to collect the judgment for you. This does not imply they are not excellent attorneys, but enforcing a significant judgment does requires a unique skill set — usually an experienced specialist/expert in commercial collection.

You must take great care to ensure you have the right team of experts. If you needed a brain surgeon, you would not hire a proctologist. They are both experts, but only one has the special skills needed to successfully perform the brain surgery. Likewise, there are many collection attorneys who perform consumer collection work dealing with credit card collection, hot checks, medical bills, car loans, small claim judgments, etc., but not commercial collections recovering hundreds of thousands or millions of dollars locally, nationally, and globally. Be sure you retain the appropriate collection attorney for your needs. This will be a significant key to successful resolution of your case.

Additionally, there are many private investigators who advertise they do complete “asset checks” for judgment enforcement for a flat fee of $500. They are general practitioners who also work divorce cases, personal injury investigations, missing person cases, criminal defense cases, etc. You probably want to engage the services of a financial forensic expert who understands judgment enforcement laws and knows how to obtain bank information and other necessary information legally, so it is admissible and does not violate privacy laws. Expert work done by this professional can save you both time and substantial legal fees while obtaining evidence for your attorney that makes the difference and prevents you from spending significant money only to be part of the 80 percent that never collects their judgment. This will help ensure you are in the 20 percent recovering the losses the court awarded to you. Other experts frequently needed as members of your Judgment Enforcement Team often include forensic accountants, forensic evaluation experts and forensic computer experts. Be certain you have the right team or you will never be in the successful 20 percent that collect their court awarded money judgment.

Let’s review a list of the professionals you may well need as a part of your Judgment Enforcement Team:

  • Team manager/coordinator
  • Seasoned commercial collection attorney
  • Financial Forensic Research Professional
  • Data analyst
  • Locksmith to help with access/ securing home, office, files, safes, safe deposit boxes, warehouse/storage facilities, vehicle(s), plane(s), etc. that you and/or the sheriff may be authorized by the court to enter and/or take possession of that asset
  • Licensed, bonded movers/ storage facility
  • Bond company
  • Receiver
  • Appraiser/valuation experts
  • Court approved auctioneer
  • A document examiner (handwriting expert)
  • Forensic accountant
  • Computer (digital) forensic expert
  • Securities/finance/banking expert
  • Bankruptcy attorney (familiar with Sections 523 and 727 of the U.S. Bankruptcy Code)

You will seldom need all these experts on any one case, but you must be aware of them and the value they add to your recovery when needed. This is not intended to be an all-inclusive list of every expert you could ever need, but rather a list of many of the most common experts often comprising the most successful team. Hopefully, this list will bring to mind experts, who, when needed, are appropriate and necessary to best serve your clients.

We at Financial Forensic Services are always available to help you find the experts you need to ensure success in all your judgment enforcement cases.

7 Critical Mistakes Judgment Creditors Make Attempting to Collect Their Judgment – Mistake #6

There are seven critical mistakes judgment creditors make when attempting to collect their judgment. We’ll be discussing each mistake in detail… and how to correct it. Last week, we covered mistake #5: Wasting Significant Money Attempting to Collect from a Judgement Debtor Who “Has No Assets.” Now, let’s identify the problem we are dealing with this week.


Your chances of successfully enforcing your judgment are significantly enhanced when you understand the psychographics of the judgment debtor. You must know what makes him tick to understand how to attack him.

Sun Tzu says in “The Art of War,” “Take from a man that which he cherishes and he will conform to your desires.” This is one of my favorite quotes from “The Art of War.” There is much wisdom in that book that applies directly, in my opinion, to the practice of judgment enforcement. I have relied on the wisdom of Sun Tzu for years in representing our clients in our financial forensic research and consulting practice.

Financial Forensic Services typically gathers as much research and conducts as many interviews with people who know the debtor(s) as possible to understand how they think and what they like and dislike. For example, while interviewing the former wife, former personal assistant, and former business partner of one of our judgment debtors, we learned he was passionate about big game hunting in Alaska.

Our attorney obtained a Writ of Execution from the court, and we accompanied the Sheriff’s deputies to the debtor’s home to execute that Writ. The first assets we took were the standing polar bear and the mounted moose. As we started to take several high power hunting rifles, the debtor became obviously distraught and demanded we stop the seizure of his assets and allow him to settle the judgment. Within 48 hours, he paid the entire high, six-figure judgment in cash and was able to preserve his trophies, expensive guns, and other assets.

In another case, our client had been pursuing their judgment debtor for over four years, attempting to collect a multimillion-dollar judgment. They had been through two major law firms and three private investigators, had zero recovery, no leads, and nothing but cancelled checks to their law firms to show for their unsuccessful efforts.

From our client, we learned the debtor’s pride and joy was his restored vintage Mercedes Benz. We reviewed his cancelled checks we had subpoenaed from the past 24-months. We found a check signed by his new wife from their joint account for over $150,000 to pay for the sailboat she had gave him on his birthday. As the debtor and I stood on the front porch of his country club mansion, watching the award-winning restored Mercedes and his new sailboat being towed away to be auctioned off by the Sheriff, he turned to me with tears in his eyes and asked, “What is it going to take to get you off my butt?” I explained to him that he could just consider me to be his new business partner. I told him I wished him no ill will, but from every success in the world he had from that point forward, I would be taking part of every dollar he earned to satisfy my client’s judgment against him. I told him if he thought he would not enjoy having me as a partner, I would go away, but first I needed 100% of the balance of the judgment plus interest and cost.

He immediately agreed to pay the total judgment and cost, and my client agreed to waive the interest. Our client was paid in full that week.

If you take time to learn the PSYCHOGRAPHICS of the Judgment Debtor, you can move in the right directions quickly and enjoy a greater recovery.

“Take from a man that which he cherishes and he will conform to your desires.”

7 Critical Mistakes Judgment Creditors Make Attempting to Collect Their Judgment – Mistake #5

There are seven critical mistakes judgment creditors make when attempting to collect their judgment. We’ll be discussing each mistake in detail… and how to correct it. Last week, we covered mistake #4: Not Understanding That the Court Does Not Make The Judgement Debtor Pay The Judgement. Now, let’s identify the problem we are dealing with this week.


Even if all the facts are on your side, regardless of how much you may have been embezzled out of or how much you may have been awarded in the contract dispute, it is usually of little consequence if you win a significant judgment if your debtor truly has no assets and no prospects of having significant assets in the future.

Prior to filing a complaint, an astute plaintiff and her attorney will obtain a financial forensic viability report to determine if the target has sufficient assets that can be reached to satisfy the claim, should a judgment be entered. Should it be determined that your target actually has no assets, you can save yourself untold heartache, time and money chasing a debtor that has no money to satisfy your judgment. You need NOT be in the 80% who never collect their judgment. If adequate assets are located, the plaintiff can proceed comfortably knowing that there appears to be sufficient assets to justify the litigation. Should these assets dissipate prior to recovery, you often have a good basis to initiate a fraudulent transfer investigation.

An investment in the financial forensic viability research and report, and consulting with experienced experts is always wise. When you obtain your judgment, you have a great start for the more in-depth financial forensic research to locate and document assets to execute upon toward the satisfaction of your judgment. Knowing what types of assets are available for recovery helps in deciding which post judgment commercial collection attorney you need to retain. The assets located in the preliminary research may be anywhere in the world so you may need help in Hong Kong, Saudi Arabia, The Isle of Mann, the Virgin Islands, or Texas and Florida. You must have the right forensic research and enforcement team with the right contacts, skills and experience to be successful. You may need experience with oil and gas cases, commercial real estate, or securities. From the preliminary financial forensic report, you will be able to assemble the right team of experts to get the job done properly and as efficiently as possible.

You must recognize that the truly sophisticated debtor is well-positioned to appear to have no assets. They may have entities domiciled in Nevada, Wyoming and in offshore asset protection havens. These entities will be controlled by nominee officers, directors, and/or trustees of irrevocable offshore asset protection trusts. Getting past these professional gatekeepers is not a task to be taken lightly, but it can be done.

Your professional asset recovery and competitive intelligence team are equipped to locate, document, and work in tandem with a carefully selected, highly skilled and specialized attorneys to recover these deeply buried assets. Investing money to locate assets for recovery is NOT THE MISTAKE. THE REAL MISTAKE IS NOT ENSURING YOU ARE INVESTING WITH THE TRULY SEASONED EXPERTS WHO HAVE A TRACK RECORD OF LOCATING AND RECOVERING THE ASSET THAT EVERYONE KNOWS THE DEBTOR “DOES NOT HAVE.”

You don’t go to your family doctor for heart bypass surgery—you get the best heart specialist money can buy. Use the same good judgment when your financial life is at stake—do your due diligence and engage only the best team of experts you can find to recover your money.

7 Critical Mistakes Judgment Creditors Make Attempting to Collect Their Judgment – Mistake #4

There are seven critical mistakes judgment creditors make when attempting to collect their judgment. Over the next several weeks, we’ll be discussing each mistake in detail… and how to correct it. Last week, we covered mistake #3: Expecting the Judgment Debtor to Actually Appear for the Deposition, Tell the Truth, and Produce the Subpoenaed Documents. Now, let’s identify the problem we are dealing with this week.


Judgment creditors are often surprised when the check for the $3 million they were awarded by the court DOES NOT come in the mail within two or three weeks after the case is heard. When they call their lawyer to find out what could have happened to the money that was awarded, they are shocked to learn that only half the job has been done. They now have to find where the debtor has stashed the money, or non-exempt assets that can be taken through the legal system to satisfy the judgment—that is if the debtor still has it and if it can be found. This involves more time and money to make it happen.

Most plaintiffs naturally think that if they win their case they automatically get whatever is awarded to them. It is amazing how often attorneys apparently fail to explain to their client that the court or the jury’s job is to apply the law to the facts as presented. If they find the facts support your claim, you win the judgment but it’s then up to you to find and extract the assets to satisfy your judgment. As we say at Financial Forensic Services, “Winning the judgment is NOT Justice—Collecting the judgment IS Justice!”

The bad news is that you may well have a long road ahead of you to locate and recover the assets to satisfy your judgment. Many attorneys do NOT have the training, experience or ability to collect your judgment. In a recent survey by Financial Forensic Services, LLC, of the top 50 law schools, it was found that there are no courses covering judgment enforcement as a part of the curriculum for graduation. Only one law school mentioned talking about judgment enforcement one day during their creditors rights course. It’s no wonder that 80% of the civil judgments awarded by courts in the United States are never collected!

The route taken by most successful judgment enforcement attorneys seems to be study through continuing education courses and working with mentors.

You must have a team of highly skilled financial forensic experts and proven, experienced commercial collection experts to efficiently recover your money. The good news is THIS CAN BE DONE and the court will OFTEN AWARD you the cost of collection!

7 Critical Mistakes Judgment Creditors Make Attempting to Collect Their Judgment – Mistake #3

There are seven critical mistakes judgment creditors make when attempting to collect their judgment. Over the next several weeks, we’ll be discussing each mistake in detail… and how to correct it. Last week, we covered mistake #2: Expecting the judgment debtor to actually appear for the deposition, tell the truth, and produce the subpoenaed documents. Now, let’s identify the problem we are dealing with this week.


Judgment Creditors often expect they (or their professionals) will find that big bank account. Garnish the bank and you magically have recovered all the money to satisfy the entire amount of their judgment.
 Finding the judgment debtor’s bank account(s) is a necessary and very important part of the process, but it is just the first step in a journey to satisfy your judgment. The money you recover by garnishing the account may be a rather insignificant amount or a substantial amount and either way, it’s a good start—but far from the end result.

Here’s how it works:

When you serve the bank with the garnishment, you should also serve a subpoena for copies of all credits and debits (front and back of the debits).  The credits may come from other assets of the debtor such as transfers from savings accounts, distributions from trusts for which they are the beneficiary, rental payments from real estate holdings, or they may be payments from oil and gas investments or income from securities your debtor owns. You really do not want the periodic income; you want to take the entire corpus of the asset. As for the debits, you want to see where the checks are deposited. They may lead to other bank accounts or brokerage accounts of your debtor; payments on the mortgage on rental property your debtor owns; purchase of assets that can be recovered; fraudulent transfers that lead to recoveries; revocable trust—the assets of which may be taken; etc.

You should also get all incoming wire transfers. You will be able to identify the source, which may be additional accounts (domestic and/or offshore) belonging to your debtor that you can trace to find assets that have gone through it. You will get the wiring instructions and copies of all outgoing wires that may lead to other sources of recovery, domestic or offshore.

In addition to the loan application you have subpoenaed from the bank (or Mortgage Company) you will also subpoena copies of all tax returns provided, personal and business. From these tax returns you will learn of income- producing real estate which you may be able to take as well as K-1’s that indicate income from partnerships or LLCs that your debtor has ownership in, etc. If you determine it to be a single member LLC, you can take the entire LLC, since courts have held that single member LLCs have no asset protection.

These debtors’ financial statements and tax returns can actually provide you with the DNA of the debtors’ financial life—your road map to unwinding his financial world and recovering the assets to satisfy your judgment.

So finding the debtors’ bank account is very important, but it is usually only the first step of what may be a challenging but profitable journey to the satisfaction of your judgment.

7 Critical Mistakes Judgment Creditors Make Attempting to Collect Their Judgment – Mistake #2

There are seven critical mistakes judgment creditors make when attempting to collect their judgment. Last week, we covered mistake #1, “Conducting a Debtor’s Exam (Deposition) of the Judgment Debtor as Soon as the Judgment’s Awarded”. Now, let’s identify the problem we are dealing with this week. Read our next blog for Mistake #3 of 7.


There is a significant money judgment in place that needs to be enforced (collected). The standard operating procedure by most creditors’ attorneys is to issue a subpoena duces tecum for the judgment debtor to appear before a court reporter, bring all the subpoenaed documents and records, and to truthfully answer all questions concerning the type, location and value of all assets and liabilities. This process is designed to aid the judgment creditor in recovering his losses.

Having attended hundreds of depositions over the past 50 years, I have never—not one time—seen a judgment debtor fully comply with the subpoena. Once the deposition finally happens (usually after the debtor’s attorney has sought multiple postponements due to “health emergencies”), many (if not all) of the key documents that have been subpoenaed are not produced. Frequent excuses include:

  • I didn’t understand you wanted ALL my various bank accounts.
  • I didn’t know you wanted records prior to this year.
  • I don’t have a current financial statement.
  • My accountant has not completed my tax returns for last year.
  • I couldn’t find a copy of my homeowner’s insurance policy with the schedules of my personal property.
  • I have changed phone companies and didn’t keep my old phone records.
  • My other attorney has the only copy of my Will/Trust and he is out of state in a long trial.
  • I don’t remember the address of that little ranch we bought in Texas.
  • I’ll have to ask my wife if we still own that stock. She told me years ago she planned to sell it.
  • We have now identified the second problem. It is going to be very difficult, if not impossible, to get the truthful information we are legally entitled to from the judgment debtor.

We have now identified the second problem. It is going to be very difficult, if not impossible, to get truthful information we are legally entitled to from the judgment debtor.

In order to counteract this problem, you must get the answers to your questions from independent sources long before you try to depose the debtor. Subpoena the records directly from the third parties, NOT from the debtor. Get bank records (i.e. loan applications with support documents such as tax returns and financial statements) as well as at least 24 months of credits and debits for each account via subpoena to the debtors bank(s), plus copies of the last 6 to 12 payment instruments from which you may find additional bank accounts.

The debtor’s bank or mortgage company can provide the name, address and policy number of the debtors’ homeowners insurance company. A proper subpoena will have a copy of the policy with the scheduled valuable personal property such as artwork, jewelry, furs, antiques, guns, collector items, etc.

Only depose your debtor after you have documented the answers to most of the questions. During the depositions, allow the debtor to commit as much perjury as possible before refreshing his memory several times with the documents you’ve obtained. Once you have the debtors’ undivided attention, you can ask the questions you do not have the answers to and probably get truthful answers.

Never expect the judgment debtor to be truthful unless forced to do so by the evidence you produce (and the threat of perjury). You should have sufficient evidence for the court to award you the assets you have documented, with or without the debtor’s cooperation. You will be more successful when you do your homework without depending on cooperation from the debtor. This is not a quick or easy process. It takes a commitment from the client and diligent work by the entire judgment enforcement team.

7 Critical Mistakes Judgment Creditors Make Attempting to Collect Their Judgment – Mistake #1

There are seven critical mistakes judgment creditors make when attempting to collect their judgment. Over the next 7 weeks, we’ll be discussing each mistake in detail . . . and how to correct it. Read our next blog for Mistake #2 of 7.


It is common practice, as soon as possible after the judgment is entered, for the judgment creditors to issue a Subpoena Duces Tecum to the judgment debtor to appear for a sworn debtor’s exam before a court reporter and to produce specific documents. The documents subpoenaed for production often include bank records, real estate records, corporate records including articles of incorporation with corporate amendments, annual reports, corporate resolutions, minute books, stock certificates, the stock ledger book, and all documents relating to LLCs, partnerships, trusts and other business entities. Other subpoenaed records typically include titles to vehicles, boats, planes, etc., plus any other records relative to the ownership, encumbrances, and transfers of assets.

The deposition is intended to allow the judgment creditor to discover information that will aid with the enforcement of the judgment.

The intended consequence of the early deposition typically just allows the judgment debtors and their attorney to find out what you know and where you are headed with your enforcement efforts, just by the very nature of your questions. This allows them more time to further hide their assets. Seldom, if ever, is any useful information provided.

Our experience indicates the better approach is to follow the money via deep forensic research, organized simultaneous execution of numerous discovery subpoenas, followed by in-depth analysis of the production documents, additional detailed subpoenas for specific documents based on the knowledge gained thus far. To the extent possible, simultaneous service of writs of execution, turnover orders, garnishments, charging orders, and other appropriate legal process should be executed on assets of the judgment debtor. Repeat as needed.

When all known non-exempt assets have been extracted from the judgment debtor, and if they have not already sought to settle the judgment, then serve them with an all-inclusive deposition Subpoena Duces Tecum. At the deposition, review all production including tax returns and financial statements in great detail on the record with the debtor.

Allow the debtor to commit as much perjury as he chooses to do without reacting or seeking a more truthful answer. At the conclusion of this exercise, confirm with the debtor that his statement under oath was that he had no “bank accounts.” Then, refresh his memory by producing bank records you previously obtained via subpoena and get his confirmation that this is (or was) his bank account. Repeat as necessary with each untruthful statement using the discovery you previously obtained.

I have found, on numerous occasions, that using this process to refresh the debtor’s memory three or four times often leads to a complete, or at least satisfactory, settlement.

Try it—it works!