All posts by Joe Dickerson

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.

MISTAKE #4: NOT UNDERSTANDING THE COURT DOES NOT MAKE THE JUDGMENT DEBTOR PAY THE JUDGMENT


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.


MISTAKE #3: EXPECTING TO FIND THE POT OF GOLD AT THE END OF THE RAINBOW

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.

MISTAKE #2: EXPECTING THE JUDGMENT DEBTOR TO ACTUALLY APPEAR FOR THE DEPOSITION, TELL THE TRUTH, AND PRODUCE THE SUBPOENAED DOCUMENTS

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.

MISTAKE #1: CONDUCTING A DEBTOR’S EXAM (DEPOSITION) OF THE JUDGMENT DEBTOR AS SOON AS THE JUDGMENT IS AWARDED.

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!

Fraud du Jour

Franky O., another businessman, and three attorneys were indicted by a Federal Grand Jury in Philadelphia for racketeering, fraud, and theft as part of a “massive health care fraud scheme” that cost 560 small businesses more than $5.7 million, according to J. W. De La Rosa, who was Inspector General of the U. S. Department of Labor.

Some of the victims were unable to then get health insurance because of “pre-existing conditions” or serious illnesses contracted while the scam was in progress.

All five defendants were reportedly associated with several related but now defunct firms once based in Denver, Colorado, including Cabot Day Insurance Co., Morgan-Puttmann Insurers Ltd., and Equity Med-Kare Plan Trust, authorities said.

None of the firms were licensed to sell insurance, according to the grand jury, yet managed to conduct business in 14 states. To avoid a lengthy prison sentence, Franky O. reportedly turned state’s evidence and began working undercover for the U.S. Organized Crime Task Force while continuing to also commit massive civil fraud.

On two separate occasions over the next few years, I was retained by judgment creditors to help recover their significant losses. With the help of an outstanding and extremely aggressive Denver civil attorney, we were able to recover 100% for both judgment creditors.


I was then contacted by another client who said he had lost $200,000 to Franky O. in another fraud. This client was uncertain if he should pursue criminal or civil remedies. With the client’s permission, I called the civil attorney I previously worked successfully with on two Franky O. cases recovering 100%. We invited Franky to join us for Saturday brunch at a local country club. Over brunch, I explained my new client’s situation to Franky. After reflecting on our previous success and the possibility of facing up to triple damages on a judgment up to $600,000, plus legal fees, costs, and interest, Franky thought it best for him to just settle with our client out of court for $250,000 cash. Which our client was happy to accept.

After reaching our mutually agreeable civil settlement agreement, the attorney and I asked Franky why he chose this line of work considering the fact that he obviously was well-educated and very bright.

Franky shook his head, grinned from ear to ear and asked for my yellow pad and pen so he could “explain the economies to us.” He drew the following inverted pyramid and explained:

The Fraud and Debt Recovery Edge: Tracing Assets Anywhere Using Intermediary Bank Discovery

During the last few years, a new, powerful tool has emerged to “trace” U.S. dollar wire transfers made from any person or entity in the world to any person or entity in the world.

We call the technique “Intermediary Bank Discovery” and it is particularly useful in domestic and international debt enforcement and fraud cases.

With certain exceptions that are not generally relevant, all U.S. Dollar wire transfers, made from any bank account in the world, sent to any bank account in the world, are “cleared” or “processed” by so-called intermediary banks in New York.

The trail need not end when funds are removed from the United States. Intermediary Bank Discovery is a lawful way around the red-tape associated with foreign discovery and investigation, not to mention foreign bank secrecy statutes.

Intermediary Bank Discovery effectively allows a creditor, trustee or other litigant to recreate the (USD) transactional and financial history of any person or entity in the world. The results are easy to use and navigate, and the records are often supplied in native electronic format (read: searchable).

When Intermediary Bank Discovery is properly executed: all of the target’s worldwide bank accounts that engaged in USD transactions are revealed, along with all of the “references” associated with all wire transfers, which references can often be revealing (or incriminating).

Moreover, all of the target’s counterparties and their (worldwide) bank accounts will be revealed (i.e., entities or persons sending to the target or receiving from the target USD wire transfers). This allows a creditor or trustee to fashion a “worldwide” potential garnishee list.

For good cause and upon proper application to a court, where necessaries, when suspicious transfers are noted—for example, because the counterparties are in fact insider persons or entities to whom assets of the target have been preferentially or fraudulently transferred—it is possible to “follow the money” to its final destination or hard asset.

Because of the records’ obvious relevance to most debt enforcement, claim security, judgment or arbitration award enforcement, receivership, insolvencies and bankruptcies, and fraud litigation, intermediary bank discovery is available for use in any such proceeding, regardless of whether the proceeding is based in the United States or abroad.

As a pioneer of Intermediary Bank Discovery in the civil context, by us Intermediary Bank Discovery requests have been successfully made pursuant to subpoena and/or court order on dozens of occasions in the past four years.

Given the wealth of experience in executing the process and navigating banking legal departments, we have never failed to obtain Intermediary Bank Discovery requests we deemed appropriate and lawful. Moreover, the United States Supreme Court has recently issued a decision implicitly approving the theoretical underpinnings of Intermediary Bank Discovery. See Republic of Argentina v. NML Capital, Ltd., 134 S.Ct. 2250 (2014).

In NML, the Supreme Court analyzed a more simplistic, single-bank wire transfer record request. The plaintiff expressly sought information relevant to the foreign debtor’s foreign assets. The Supreme Court, nevertheless, rejected sovereign debtor’s objection to the discovery. See also, http:// swissprivatewealth. ch/ us-supreme-court-gives-green-light- intermediary -bank-discovery/.

The most significant uses for Intermediary Bank Discovery Include:

  • A Lawful Way Around Foreign Bank Secrecy Laws.
    • Discover every one of a target’s bank accounts that originates or receives U.S. dollar wire transfers, worldwide.
  • “Trace” Money from Transferee to Transferee.
    • The technique allows for multiple rounds and follow-up, so it is possible to “follow” the money.
    • Cost- and time-effective method for piecing together financial history
  • Identify fraudulent and preferential transfers in the context of international insolvency.
  • Develop evidence of commingling, under capitalization and fraud to pierce the corporate veil.

Recent Intermediary Bank Discovery Success Stories Include:

  • Reveal worldwide counterparty and bank account list of Chinese major; discover intra-corporate or related-party transfers and secret shell entities to pierce the corporate veil of obtain mid-8-figure settlement on 8-figure claim.
  • Reveal worldwide counterparty and bank account list of Chinese major, contributing to 8-figure settlement.
  • Reveal counterparties and business contacts list/seize receivables and establish jurisdictional predicates.
  • Dispute allegations/catch lies (many still do not realize these records can be obtained).
  • Complete recovery against Venezuelan entity on mid-7-figure claim.
  • Reveal and trace approximately $75 million in fraudulent transfers from defunct British Virgin Islands entities through numerous shell entities into hard assets seized by creditors—obtain confidential recovery.
  • Obtain directed verdict after demonstrating sworn denials of United States contacts to be materially false.
  • Reveal “perpetual insolvency” asset shifting schemes in complex, offshore shipping group structure, including $1B in suspect transfers, sufficient to obtain global freezing injunction.
  • Trace $600M in assets hidden through 40+ shell entities in high profile divorce.
  • Reveal alleged Greek bankruptcy fraud: receivables in excess of $200M were wrongfully diverted through offshore vehicles, and trace funds through to hard assets seized by creditors—trial on allegations upcoming.

Swiss Transparency Coming Your Way

New legislation is making Switzerland an open book. With the implementation of FATCA (Foreign Account Tax Compliance Act), information on funds held all over the world by all those liable to pay taxes in the United States is being made accessible to the Federal Government. Switzerland has long been every Bond villain’s favorite place to store cash, but the notorious tax haven for elite earners is changing the game by enlisting as one of the first countries to comply with FATCA regulations.

The fine print is, of course, extensive. Swiss banks are bound by a “model 2” agreement, which bypasses the Swiss government. Institutions report directly to the Feds regarding American citizens, US based companies, as well as green card holders with bank accounts in Switzerland. FATCA is especially crucial in the Swiss banking industry since the notoriously private accounts hold a significant portion of global transnational funds. While it will be no small feat for Swiss banking institutions to identify and locate all of those affected by FATCA, customer compliance is required before data is transferred.

Refusal is not a get out of jail free card. Even if clients refuse data transfer, institutions are still required to disclose to the IRS the total valuation and number of undeclared assets. After filing a “request for administrative assistance,” Washington receives the details of the accounts and assets held in Switzerland. As Patrick Dorner, director of the Swiss Association of Asset Managers says that refusal “is admitting that he is not at rights with the American tax system.” Non-compliant banks and clients are subject to heavy sanctions, with a starting penalty of 30% withholding on interest, and dividend payments.

Going forward, all trust companies, wealth management firms, insurers, and industries must register with the IRS and begin to report on their American clientele. So far, over 4,000 Swiss companies have been listed and are well on their way to registering. With the backing of FINMA, Switzerland’s market monitor, FATCA took effect on June 30th, 2014 and will continue to assist institutions in working with the US to ensure the “fatcats” are paying their due.

Synthesizing Your Judgment Debtor’s Financial DNA: Part Two

When you’re synthesizing your debtor’s financial DNA, the proof is in the paper. Be sure the subpoena to the bank or mortgage company also requires a copy of all payment instruments including checks, wire transfers, cashier’s checks, etc. for at least the last 12 payments. The source of these payments may lead you to trusts, business entities, or offshore accounts you did not previously know about. Your debtor may be paying his mortgage with funds from one of his corporations and this evidence can help you pierce the corporate veil as this usage could extend deeper into his personal life. You may also find payments drawn on banks in small towns in another state. Such accounts have led me to a ranch in Texas with a herd of valuable registered cattle along with oil and gas production on the property.

The debtor had claimed the 100% Texas homestead exemption on the ranch but we were able to prove his Colorado homestead ($65,000.00) exemption was valid. He had claimed the homestead in Colorado, he was paying Colorado state income taxes, was registered to vote in Colorado, had a Colorado driver’s license (but no DL in Texas) and his son was attending the University of Colorado with residence tuition. We took the 1,200 acre Texas ranch, the oil and gas production, and the cattle as well. Since we had subpoenaed the bank in possession of the Colorado mortgage for his loan application and support documents, including three years of tax returns and financial statements, inconsistencies began to appear.

One year, the debtor had paid excessive taxes. We subpoenaed the work papers from his CPA, and our Director of Forensic Accounting audited the questionable tax returns along with interviewing the CPA. It turned out that our judgment debtor was anticipating our client’s judgment against him so he overpaid his federal income taxes by about $200,000 with the intent of settling the judgment for a few cents on the dollar after convincing our client that he couldn’t pay. He planned to fill an amended return and get a refund for over payment. With a court order, our client became the beneficiary of the refund instead.

The three years of financial statements informed us that our judgment debtor had acquired a $275,000 condo for cash in 2006 as well as an oceanfront home on five acres in the Turks & Caicos Islands in 2008 for $1.2 million. Rather than fight for the properties in a well-known tax haven, we requested cash payment of $500,000. This was a win/ win for everyone involved, and there was practically no related cost for the work.

From the original bank account, we subpoenaed the signature cards and all credit and debit instruments for two years. This wealth of information included everything from authorization documents to voice recordings for all inbound and outgoing wire transfers. The subpoena also covered all direction and authorization relative to any and all sweep direction, credits, and debits including transactions and the full name, address, and account number of every account receiving debits from the account.

Million dollar debit transactions in Texas required we move our action further south. Investigation of an account held in our debtor’s name revealed still more subpoenaed documents which led us to recover $85,000 from the debtor’s checking account and a $1.1 million 1,200-acre ranch. Copies of a $325,000 wire transfer from the original account payable to Ft. Lauderdale Rolls Royce and an account in Ft. Lauderdale, FL. After registering the judgment with the US District Court in Miami, we learned that the dealership had sold a Rolls Royce to Florida Enterprises, operated by J. Debtor, Jr. We were able to show the court that the vehicle was purchased by J. Debtor Sr. who signed all the purchase documents personally and then titled and registered the vehicle fraudulently to his son. We were able to return the car, and the $300,000 refund went to our client.

From the debtor’s personal credit report, we found a very active American Express card. We subpoenaed the records for the card for the past two years, and again we found more spending in another state. Charges to Caesars Palace Hotel & Casino in Las Vegas led us to register our client’s judgment in Reno, NV. More investigation uncovered a $250,000 credit on deposit with the casino which we garnished. Subpoenaing all charges to the debtor’s room revealed numerous toll calls to a phone back in Florida. The mystery phone belonged to Jane Doe (later determined to be Mr. Debtor’s girlfriend), and further research reflected that she resided in a $385,000 condo with no encumbrances owned by our debtor. We obtained a Turnover Order, took ownership of the condo and sold it for a net recovery of $360,000 for our client.

Even more activity was later revealed, and it was all due to the information found within that very first bank account! Our very strategic debtor had done his best to hide as much as he could, but spending leaves a bloody trail that forensic analysts can piece together based on that financial DNA. Never underestimate a paper trail, even if the bank looks empty!

Synthesizing Your Judgment Debtor’s Financial DNA: Part Two

When you’re synthesizing your debtor’s financial DNA, the proof is in the paper. Be sure the subpoena to the bank or mortgage company also requires a copy of all payment instruments including checks, wire transfers, cashier’s checks, etc. for at least the last 12 payments. The source of these payments may lead you to trusts, business entities, or offshore accounts you did not previously know about. Your debtor may be paying his mortgage with funds from one of his corporations and this evidence can help you pierce the corporate veil as this usage could extend deeper into his personal life. You may also find payments drawn on banks in small towns in another state. Such accounts have led me to a ranch in Texas with a herd of valuable registered cattle along with oil and gas production on the property.

The debtor had claimed the 100% Texas homestead exemption on the ranch but we were able to prove his Colorado homestead ($65,000.00) exemption was valid. He had claimed the homestead in Colorado, he was paying Colorado state income taxes, was registered to vote in Colorado, had a Colorado driver’s license (but no DL in Texas) and his son was attending the University of Colorado with residence tuition. We took the 1,200 acre Texas ranch, the oil and gas production, and the cattle as well. Since we had subpoenaed the bank in possession of the Colorado mortgage for his loan application and support documents, including three years of tax returns and financial statements, inconsistencies began to appear.

One year, the debtor had paid excessive taxes. We subpoenaed the work papers from his CPA, and our Director of Forensic Accounting audited the questionable tax returns along with interviewing the CPA. It turned out that our judgment debtor was anticipating our client’s judgment against him so he overpaid his federal income taxes by about $200,000 with the intent of settling the judgment for a few cents on the dollar after convincing our client that he couldn’t pay. He planned to fill an amended return and get a refund for over payment. With a court order, our client became the beneficiary of the refund instead.

The three years of financial statements informed us that our judgment debtor had acquired a $275,000 condo for cash in 2006 as well as an oceanfront home on five acres in the Turks & Caicos Islands in 2008 for $1.2 million. Rather than fight for the properties in a well-known tax haven, we requested cash payment of $500,000. This was a win/ win for everyone involved, and there was practically no related cost for the work.

From the original bank account, we subpoenaed the signature cards and all credit and debit instruments for two years. This wealth of information included everything from authorization documents to voice recordings for all inbound and outgoing wire transfers. The subpoena also covered all direction and authorization relative to any and all sweep direction, credits, and debits including transactions and the full name, address, and account number of every account receiving debits from the account.

Million dollar debit transactions in Texas required we move our action further south. Investigation of an account held in our debtor’s name revealed still more subpoenaed documents which led us to recover $85,000 from the debtor’s checking account and a $1.1 million 1,200-acre ranch. Copies of a $325,000 wire transfer from the original account payable to Ft. Lauderdale Rolls Royce and an account in Ft. Lauderdale, FL. After registering the judgment with the US District Court in Miami, we learned that the dealership had sold a Rolls Royce to Florida Enterprises, operated by J. Debtor, Jr. We were able to show the court that the vehicle was purchased by J. Debtor Sr. who signed all the purchase documents personally and then titled and registered the vehicle fraudulently to his son. We were able to return the car, and the $300,000 refund went to our client.

From the debtor’s personal credit report, we found a very active American Express card. We subpoenaed the records for the card for the past two years, and again we found more spending in another state. Charges to Caesars Palace Hotel & Casino in Las Vegas led us to register our client’s judgment in Reno, NV. More investigation uncovered a $250,000 credit on deposit with the casino which we garnished. Subpoenaing all charges to the debtor’s room revealed numerous toll calls to a phone back in Florida. The mystery phone belonged to Jane Doe (later determined to be Mr. Debtor’s girlfriend), and further research reflected that she resided in a $385,000 condo with no encumbrances owned by our debtor. We obtained a Turnover Order, took ownership of the condo and sold it for a net recovery of $360,000 for our client.

Even more activity was later revealed, and it was all due to the information found within that very first bank account! Our very strategic debtor had done his best to hide as much as he could, but spending leaves a bloody trail that forensic analysts can piece together based on that financial DNA. Never underestimate a paper trail, even if the bank looks empty!

Synthesizing Your Judgment Debtor’s Financial DNA: Part One

Garnishing your judgment debtor’s bank account should not be your principal reason for finding it. I personally consider it gravy when we find an account with money to garnish. While the funds are important, they aren’t the most important reason for finding it.

A good forensic research firm will treat that bank account like the bloody fingerprint it is. Just like a CSI team, we’re looking for the DNA to solve the case, and a bank account is just that. Hidden within are the clues that can lead hard working, inquisitive experts to the otherwise elusive details. Some cases have a plethora of clues, others have fewer, but they are always there, whether we can see them or not—just waiting to show us the hidden path to solving the crime and collecting on your judgment.

Always remember, you have the power of the court behind you to effectuate the discovery needed to locate and recover the assets you need to satisfy your client’s judgment. If the judgment debtor does not have the assets to satisfy the judgment, substantially or entirely, the sooner you learn that, the sooner you can get your clients out of the chase and back to their lives. In most states, the judgment is good for 7 to 20 years and can be renewed prior to expiring. In this sense, time may actually benefit your client as the debtor accumulates assets.

Based on my 50 years of experience, you WILL NOT find your debtors assets via deposition or interrogatories. The first thing most attorneys want to do is a debtor’s exam as allowed by law. That is often followed by interrogatories of the debtor. I have attended hundreds of depositions and have never seen a debtor appear for the deposition with all the subpoenaed documents or tell the truth when questioned about their assets.

Not only is this nonproductive, but usually it’s counterproductive because you merely tell the debtors what you already know through questioning. This gives debtors ample time to really hide assets, costing the client even more money and time to continue the chase. Even subpoenas to the debtor for bank records, tax returns, financial statements, phone bills, and credit card records generally fail to deliver truthful or complete information. To get complete accurate bank records, you must get them directly from the vendor source, not
your debtor!

Let’s look at the DNA of bank accounts to see how it can lead you to the documents that will reveal the various sources and assets to satisfy a judgment. To get started—you or someone on your judgment enforcement team has located one or more of your judgment debtor’s bank accounts. You will go through the following process with each account.

First of all, serve the bank with a garnishment for the funds from any and all the debtor’s accounts simultaneously. Serve each bank with a subpoena for copies of all safe deposit box documents; including signature card(s); box entry records; applications; all loan applications and support documents including tax returns; financial statements; copies of corporate resolutions and all other business records on file; all trust documents; all correspondence and notes in loan files relating to the judgment debtor or any business entity related in any way to the debtor; copy of all payment instruments relating to every payment made to the bank by or on behalf of the judgment debtor, directly or indirectly, or any entity related to him or her in any way.

The first subpoena to the bank should also require the production of every bank statement for each account upon which the debtor is a signatory along within, at least, the last 24 months of credits and debits [front and back] for each account. That subpoena should include all authorization documents including who is authorized to send wire transfers plus all actual authorizations for outgoing wires including both paper and voice recordings.

If the bank or a mortgage company is financing the judgment debtor’s home, subpoena the lender for the name and address of the insurance company, and the policy number, for which they are escrowing and paying the premium. Then subpoena the insurance company for a copy of the policy including a copy of all scheduled personal property which can include; artwork, jewelry, furs, antiques, collectibles, guns, silver, and all kinds of valuable personal property. You will not find these valuable assets in public record anywhere. With this evidence, sometimes even in the debtor’s own handwriting, I have never seen a court deny a Writ of Execution or a Turnover order—no one is going to pay a premium on a Rolex they do not own.