Joe Dickerson article feature in The Denver Business Journal
‘Financial detective’ on the lookout for hidden assets
by Amy Bryer
Joe Dickerson is a detective of sorts. He’s not a gun-toting detective who gets into fistfights and always gets the villain and the girl. He’s a financial detective who can find where people hide money, assets and anything else of value.
Against someone who committed fraud or another white-collar crime. Frequently the convicted person hid assets to avoid paying the victim, and it’s Dickerson’s job to find the money. Dickerson goes beyond just a subpoena of a bank records. Assets can be hidden in shell corporations, homes, boats, cars, planes, stocks, even construction equipment. Often, the assets are concealed under the names of family members or colleagues and sometimes those people aren’t even aware their names are being used.
In one case, Dickerson found a check written to an out-of-state power company that turned up thousands of acres of farm and ranch land owned by the convicted person, but not listed under his name. The search doesn’t stop with the subpoena of financial records. Even analyzing a phone bill can reveal calls to a bank in the Bahamas, he said. Dickerson will even interview ex-spouses and former secretaries to find leads to assets that are hard to locate on paper. According to a study by Dickerson Financial, less than 3 percent of restitution orders in criminal cases are fully recovered. Dickerson is trying to change those odds. “Getting the verdict is only half the battle,” he said.
The majority of criminal cases are turned into civil cases that allows the victim to use subpoena power to obtain the personal financial information on the convicted criminal. In white-collar crime, the victim is torn by competing interests, Denver Chief Deputy District Attorney Bill Lucero said. “The victim would like to see the person punished and put in jail, but what they need more than anything else is to get their money back,” Lucero said. “If youcan’t prove they have the ability to pay, you can’t squeeze blood out of a turnip.”
The DA’s office often cuts deals for probation just so the victim will recover his or her cash. Lucero describes Dickerson as a junk-yard dog who sniffs out people’s money.
A district attorney is not allowed to counsel victims in recovering cash, but Dickerson is not hamstrung by the same rules, Lucero said. “He can use techniques that are not allowed by us — they’re not illegal, just not allowed,” he said. “Government has to play by a different set of rules.”
Lucero worked with Dickerson during the savings and loan crisis of the 1980s and the early 1990s when several land developers swindled banks out of millions of dollars with phony letters of credit. At the time, Lucero was employed by the U.S. District Attorney’s Office. Dickerson located assets for the head of a now-defunct real estate company who declared bankruptcy during the savings-and-loan debacle of the ’80s. The financial detective uncovered the assets 10 years after the deals were done, Lucero said. “All I know is I’d hate to have [Dickerson] on my tail,” Lucero said.
Dickerson, who started his career in the 1960s as a detective for the Houston Police Department, helped a bank in Fort Collins recover $1.3 million in bad bank loans in the same case. After 14 months, Dickerson found 71 different corporate entities where the money was hidden, said Larry E. Scott, a retired banker. Dickerson also located money and assets in a house in Scottsdale, Ariz., a $250,000 mutual fund in Kansas City and other property held in a trust that no one recognized as his own. Although Scott said he never thought his bank would see the money again, Dickerson managed to find it all. The justice system believes justice is served when the verdict comes in and convicts the wrong-doers, but Dickerson disagrees with that philosophy.”Justice is served when the victim gets their money back into their bank account and they are made to feel whole again,” he said.
Joe Dickerson article feature in The Journal of New England Technology
Due diligence an important step to take prior to investing
By Tony Monterastelli
Many techies love to invest their money in other tech companies. But whether you’re putting up seed money for a startup, or buying the stock of a public company, look out for more than just the market risk. Look for signs of fraud. Here are some tips for making proper due diligence a regular part of your investment decisions, according to Joe Dickerson, a private financial investigator based in Lakewood. Many of his customers are investors who hire him to check out companies and businesses before they invest.
… Closely examine the structure, even the location, of the company. For example, think twice before investing in a limited liability company and limited liability partnership, Dickerson said. An LLC or an LLP make it easy for the owners to hide financial and business shenanigans, he said. “There are still a lot of legitimate LLCs and LLPs,” Dickerson said. “But it raises a red flag.”
… Location matters, too. Caution lights illuminate when Dickerson sees that a company is incorporated in California or Florida, especially when its offices are in Orange County, Calif., or Boca Raton, Fla. With many wealthy retirees, those areas tend to attract more than their share of scam artists, he said.
… Read the company’s reports. Public companies must file regular quarterly and annual reports with the Securities and Exchange Commission if they have more than 500 shareholders and at least $10 million in assets. All companies that list their securities on the Nasdaq Stock Market or the New York Stock Exchange file reports with the SEC, and anybody can get those reports for free from the SEC’s EDGAR database (located at www.sec.gov). However, the reports never will give you the whole story, Dickerson said. For example, a company will report that it has been sued for patent infringement, but it won’t say whether the suit involves a crucial technology, he said. “It’s going to get couched in minimal terms,” Dickerson said. “But you’re going to have enough information that you’ll be able to make additional inquiries.”
… Beware of penny stock companies. These companies generally have shares priced under $5, have few assets and usually are just in the idea stage, with few, if any, customers and little revenue. In the tech realm, many such companies trade on the National Association of Securities Dealers Over The Counter Bulletin Board (OTC BB), a quotation service that never should be confused with the Nasdaq stock exchange. Penny stocks can tempt tech-savvy investors. Usually, the concept sounds exciting, and at such low prices, they offer the chance to amass a large ownership position, along with the feeling of getting into an investment at the ground level.
But sometimes the people who run these companies engage in “pump and dump” schemes, which are among the 10 most frequent forms of stock fraud listed by the North American Securities Administrators Association (NASAA), a group of state securities officials. Such schemes often involve the use of paid stock promoters who tout the company’s stock in the media and on Internet message boards. Beware of companies that issue press releases that hype the potential of their technology, often saying that it will “revolutionize” their industry, especially when the company has no customers and little, if any, revenue. Stock promoters should clearly disclose whether the company has paid them to tout the firm. The NASD can give a partial disciplinary history on the broker or firm that’s touting the stock through its toll-free disclosure hotline, 800-289-9999, or its Web site at www.nasdr.com.
… Beware of timely or trendy ideas. In the mid-1990s, some investors fell for bogus “wireless cable” investments, despite the oxymoron, because those words sounded like a hot new technology, Dickerson said. While most techies know enough not to fall for such a fabrication, it’s good to look twice at investments in hot technologies. According to the NASD, scams have arisen recently regarding companies – or supposed companies – that make defense, anti-terrorism or biological detection products. Often the company claims that is has technologies or services that will help the war against terrorism or protect the public from biological threats, such as anthrax.
… Finally, know who you invest with. Know your company executives well, Dickerson said. For example, Dickerson starts by checking a company president’s driving records. “I want to know how many times he’s been arrested for driving under the influence. It tells you something. If you’re going to invest your money with somebody, you don’t want all of it going up his nose,” he said. “If people would look at who they invest with, they would avoid a lot of bad investments.” Above all, Dickerson reminds investors to heed these familiar rules: “There’s no free lunch, and if it seems too good to be true, it probably is.”
Joe Dickerson article featured in ABFJournal
A new article entitled “And Now for Some Good News About Fraudulent Transfers” written by Financial Forensic Services President Joe Dickerson was recently featured in ABFJournal magazine. To read the article in PDF format, please click HERE