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Financial Forensic Report 6.1.2021

PRIMARY AND SECONDARY ASSET PROTECTION TOOLS

By: Joe H. Dickerson, CFE, CFI

This week we are going to look at what we at Financial Forensic Services have found to be the four (4) primary ways debtors attempt to protect their assets from judgment creditors. We will then look at the twenty three (23) secondary (other) places or ways we have these judgment debtors also use in their efforts to hide their assets.

For many years corporations were the principal way to protect assets. Next week we will look at the various techniques judgment creditors use to recover assets being held in corporate entities.

Limited partnerships and limited liability companies are favored by many people now with the LLC becoming the preference for many, especially for small and mid-size businesses and some larger entities. If used correctly, it offers many benefits for legitimate investors.

Trusts are frequently used to protect the wealth of individuals and families for the future benefit of heirs and charities. There are two basic forms of trust: revocable or irrevocable. The revocable trust offers no asset protection. Assets held in irrevocable trusts can be reached if it can be proven if those assets were conveyed into the fraudulently irrevocable trust to “hinder, delay, or defraud creditors.” That subject will be addressed again, in detail, in the future issues of this weekly report.

The Secondary Asset Protection Tools are not used as frequently or as obviously as the four primary ones above and are less often pursued for recovery and many are never thought of or considered. This list is not intended to be all inclusive, but it does reflect places and ways where Financial Forensic Services has found hidden assets.

These valuable assets are difficult to find and prove their ownership due to the fact that their is no public records such as: title records, secretary of state files, clerk and recorder records, assessor records, DMV files, etc. that can be researched for documents to prove ownership.

If you believe your judgment debtor is fairly wealthy and probably owns some of this kind of personal property, and if your research has shown that your debtor owns a home, you should determine if the home is financed. If so, we all know monthly payments on a financed home consist of four (4) things: (PITI) principal, interest, taxes, and insurance. Taxes and insurance are escrowed and paid by the lender so the collateral is protected and not lost in case the taxes are not paid or the insurance is not paid and lost in case of a fire. If the lender is paying the insurance premium, then the lender knows the name of the insurance company, the address of the insurance company, and the policy number. Knowing that, you then subpoena the lender and get the name and address of the insurance company and the policy number. With that information, you now subpoena the insurance company for a copy of the policy with all schedules and attachments thereto. Here you get a list of the jewelry, art, furs and other valuable assets – a list you probably cannot get anywhere else and the list that no other judgment creditor has access to! These last two subpoenas and the next one should be obtained by ex parte if possible.

Now take the list of assets you obtained from the insurance company and request that the court issue a writ of execution (or the equivalent) for the recovery of the listed assets as well as all other non-exempt assets including, but not limited to, all electronic communication devices, such as cell phones, computers, iPads, fax machines, copying machines/printers, and the authority to conduct a forensic analysis thereof. Note: I have never been turned down (denied) by the court for this request!

My second favorite place to recover assets is from the debtor’s attorney by serving a writ of garnishment. Remember, the retainer does not belong to the attorney until earned. I recovered $5,000.00 every Monday morning for three (3) weeks. The fourth week the attorney decided he should take his retainer from someone other than his client. We both laughed, shook hands and went on with our case. We ultimately made a 100% recovery. Apply this type of “out-of-the-box” thinking to each step of your judgment enforcement cases and both you and your client will do well.

NEXT WEEK: Piercing the Corporate Veil 
(Piercing the asset protection vehicles)

If you have questions or comments please direct them to:
joe@financialforensicservices.com

If you would like to submit an article for publication (500-750 words) you may also submit it to the above email address.

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Diagnostic & Prescriptive Judgment Enforcement
By: Joe H. Dickerson, CFE

$24.95 + FREE S&H

Please place your book orders by calling
303.974.5610
during normal business hours Mon-Fri 9am-5pm MT.
or email joe@financialforensicservices.comand make an appointment
for a FREE initial review of your judgment. Thank you!

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Testimonial

“Joe spends the time to understand the problem from the client’s perspective and from the legal perspective. He is intelligent, tenacious, willing to work as hard as it takes, thorough, well-informed, and just awfully good at what he does.”

Thomas E. Root, 
Attorney

2014-11-11T18:20:05+00:00

Thomas E. Root, 
Attorney

“Joe spends the time to understand the problem from the client’s perspective and from the legal perspective. He is intelligent, tenacious, willing to work as hard as it takes, thorough, well-informed, and just awfully good at what he does.”

“They went overboard in providing excellent service. I was very pleased with what they provided for me as their end product. Financial Forensic Services really understands how a case needs to be put together in order to be presented to a jury. Their PowerPoint presentation tied everything together. It was thorough, it was concise, and it got the job done.”

Jim Thomas
, Prosecuting Attorney

2014-11-11T18:21:32+00:00

Jim Thomas
, Prosecuting Attorney

“They went overboard in providing excellent service. I was very pleased with what they provided for me as their end product. Financial Forensic Services really understands how a case needs to be put together in order to be presented to a jury. Their PowerPoint presentation tied everything together. It was thorough, it was concise, and it got the job done.”

“Joe Dickerson is the industry standard. You can measure the rest by what he does, and I say that without equivocation. Joe has incredible insight into the dark world of fraud. He understands the devious ways in which people perpetrate white-collar crime.”

Jan Schlichtman
, Attorney at Law

2014-11-11T18:20:55+00:00

Jan Schlichtman
, Attorney at Law

“Joe Dickerson is the industry standard. You can measure the rest by what he does, and I say that without equivocation. Joe has incredible insight into the dark world of fraud. He understands the devious ways in which people perpetrate white-collar crime.”

“Financial Forensic Services did an excellent job in the way they executed my case. They were very straightforward. They stated what they could do for us and they did it. And, from a personal standpoint, they are excellent. Both my wife and I felt very comfortable working with them.”

Michael Whalen, 
Businessman

2014-11-11T18:21:13+00:00

Michael Whalen, 
Businessman

“Financial Forensic Services did an excellent job in the way they executed my case. They were very straightforward. They stated what they could do for us and they did it. And, from a personal standpoint, they are excellent. Both my wife and I felt very comfortable working with them.”

“Joe is the most competent investigator I’ve ever found. He has rare ability to find hidden assets. Others claim it, Joe has it. He understands the Rules of Evidence, he knows how to talk to people to develop a fact pattern, and he has a sixth sense for fraud. Joe has unquestioned integrity and delivers value for his services.”

Andrew Quiat
, Attorney

2014-11-11T18:12:51+00:00

Andrew Quiat
, Attorney

“Joe is the most competent investigator I’ve ever found. He has rare ability to find hidden assets. Others claim it, Joe has it. He understands the Rules of Evidence, he knows how to talk to people to develop a fact pattern, and he has a sixth sense for fraud. Joe has unquestioned integrity and delivers value for his services.”

“As an environmental law firm, we use Joe Dickerson to locate prior business owners and do corporate genealogies. He is persistent, that’s the key to a good investigator, and he has a knack for understanding how people move money and do business. That tells him what rocks to look under. Joe is vastly superior to other investigators in two ways: he lets you know what’s going on and he’s honest with you, because he tells you if there’s really anything there worth pursuing. He is unusually thorough and creative finding people. Joe has earned his fee every time.” “If the information is to be found, then I believe that they will find it. Their service enabled me to do a much better job for my client.”

Tim Gabelhouse
, Attorney at Law

2014-11-11T18:20:41+00:00

Tim Gabelhouse
, Attorney at Law

“As an environmental law firm, we use Joe Dickerson to locate prior business owners and do corporate genealogies. He is persistent, that’s the key to a good investigator, and he has a knack for understanding how people move money and do business. That tells him what rocks to look under. Joe is vastly superior to other investigators in two ways: he lets you know what’s going on and he’s honest with you, because he tells you if there’s really anything there worth pursuing. He is unusually thorough and creative finding people. Joe has earned his fee every time.” “If the information is to be found, then I believe that they will find it. Their service enabled me to do a much better job for my client.”

” I was prepared to dismiss a federal case involving millions of dollars against a local individual who claimed to have no substantial assets. After your staff hit the records and delved into the transactions behind the transactions, you discovered the individual to actually be worth a few million dollars. We continued the case to conclusion. We were also very happy with the financial background examinations you conducted of the former directors of two failed national banks. The heart of any civil case is whether there is a pot at the end of the lawsuit. You were our lucky leprechaun in finding such pots.”

R. Michael Sentel
, Former Section Chief Legal Division, FDIC

2014-11-11T18:13:08+00:00

R. Michael Sentel
, Former Section Chief Legal Division, FDIC

” I was prepared to dismiss a federal case involving millions of dollars against a local individual who claimed to have no substantial assets. After your staff hit the records and delved into the transactions behind the transactions, you discovered the individual to actually be worth a few million dollars. We continued the case to conclusion. We were also very happy with the financial background examinations you conducted of the former directors of two failed national banks. The heart of any civil case is whether there is a pot at the end of the lawsuit. You were our lucky leprechaun in finding such pots.”

“When I was general counsel for First Interstate Bank, I used Joe Dickerson for locating assets, investigating behavior and asset discovery. He did excellent work and always got the information I needed without compromising the bank in any way. He’s more thorough and kept in better touch with me than other investigators. I’d give him a grade of 96 or 97 out of 100.”

Frank Brainerd, Retired
Banker/Attorney

2014-11-11T18:20:20+00:00

Frank Brainerd, Retired
Banker/Attorney

“When I was general counsel for First Interstate Bank, I used Joe Dickerson for locating assets, investigating behavior and asset discovery. He did excellent work and always got the information I needed without compromising the bank in any way. He’s more thorough and kept in better touch with me than other investigators. I’d give him a grade of 96 or 97 out of 100.”