ADVANCED DYNAMIC SOURCES: CASH MANAGEMENT a.k.a. TREASURY MANAGEMENT SERVICES

FOLLOWING THE MONEY AND RECOVERY VIA BANK DISCOVERY

By: Joe H. Dickerson, CFE

I want to share with you three little-known advanced and dynamic sources that forensic experts can use to locate hidden assets, often anywhere in the world. The first is what’s called a “Treasury Management Report,” which the banks may create for their customers who have multiple accounts. If someone is doing business mostly with one bank and has multiple accounts- personal accounts, family business accounts, trust accounts, corporate accounts, LLC accounts, money market accounts- all of those different accounts (any accounts that the debtor signs on) can be combined into a monthly Treasury Management Report. This report has a massive amount of information and it identifies every banking relationship that the debtor has with that banking organization.

You can get this report by subpoena, just like you can get their monthly checking account information with subpoena. It’s not well known that these are available, but it’s a fabulous tool for doing financial forensic work and locating assets that are often missed by the average judgment enforcement process.

SUBPOENA TREASURY MANAGEMENT INFORMATION

Commercial banks and other financial institutions that focus on the needs of medium to large commercial customers may offer treasury management services. Treasury management products and services are also referred to as “Cash Management Services.” Treasury management and cash management have the same meaning and are used interchangeably throughout the financial industry.

For years, financial institutions had internal specialized software used to track an enterprise’s overall deposit relationships in an attempt to determine profitability or value- in other words, to analyze it. Initially, this specialized software was dedicated to analyzing account services charges of a depository relationship, as well as lending fees for a lending relationship. This specialized software was typically internally-generated proprietary software developed by that financial institution, as this specialized software had to interface with their deposit, lending, and many other systems.

Several years ago, treasury management services were offered exclusively at larger financial institutions and regional money center banks. Over time, however, access to industry-standard banking software has allowed smaller financial institutions to offer treasury management services on a limited scale.

Treasury management, also known as cash management, products, allow an enterprise to manage its liquidity and maximize its use of investable funds using specialized bank software. Treasury management products include real-time bank account data and information, electronic- and paper-based fraud systems, collection software, disbursement software, concentration software (nationally and internationally), investment/foreign exchange software, and funding with capital markets and equities.

Customer reporting from a treasury management system results in a completely separate set of documents than the traditional “bank statement” from a depository account or loan account. It is important to recognize that there is another completely separate set of signature cards (called the Treasury Management Agreement). There is another completely separate set of analysis statements, not only for each account, but for an enterprise’s overall relationship, called a Grouped or Consolidated Analysis Statement.

For forensic researchers, getting these treasury management statements reveals all the business or commercial accounts the client has with the financial institution. And in some cases, financial institutions even include personal accounts on the grouped analysis statement, showing every single account for the enterprise and the owners of the enterprise.

In addition, the analysis statements show all the treasury management services for that client. Things such as the overnight investment sweep or Eurodollar sweep account, electronic origination ACH (Automated Clearing House) for concentration/ wire originations by telephone, or by computer using a token.