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Synthesizing Your Judgment Debtor’s Financial DNA

By Joe Dickerson, CFE, CFI

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.

This is just the tip of the iceberg, so be sure to join us next month, when we take a trip down south for some Texas style judgment justice by following the leads from the credit and debit DNA!

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 overpayment. 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.

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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.”

“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.”

“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.”

” 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.”

“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 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.”

“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.”

“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.”