There are many reasons your company might seek to recover assets from another organization or an individual. In a lawsuit involving fraud, employment matters, personal injury, or fiduciary responsibility, for example, if the case results in a successful judgement then the process moves to the asset recovery phase.
However, it can be extremely difficult to find sufficient assets to collect on a judgement. In fact, it’s estimated that up to 80 percent of all judgements are never collected on, in part because it has become increasingly easy for businesses and individuals to hide their assets. There is a treasure trove of websites and books that will happily outline how to hide what you own, along with asset protection companies that make a living helping companies and individuals erase their digital footprint and essentially become invisible.
As the following real-world examples illustrate, a rigorous investigation can make all the difference—finding hidden assets and enabling you to recover them successfully to collect on a judgement.
Case #1: A Lifestyle That Doesn’t Add Up
Sometimes, asset recovery investigation subjects give themselves away by living a lifestyle that doesn’t match their income.
In this case, it turned out that a finance executive was secretly embezzling from his employer, using a separate fictitious business and fictitious invoices to siphon off millions of dollars. Because the company lacked proper checks and balances, the fraudulent activity went undetected for years.
It wasn’t until the company was preparing for a buyout, which resulted in a rigorous due diligence process, that the embezzlement was discovered. Though the finance executive had since died, the investigation still dug into his background and uncovered the fact that his lifestyle far exceeded what his salary could have supported. He owned multiple luxury homes, had bought his parents a house and an expensive RV, and took several lavish vacations every year.
This discrepancy prompted investigators to search the subject’s car, where they found a check written to a dummy company. Equipped with information that pointed to possible fraud, they conducted a detailed search of his office and found a mountain of additional evidence of embezzlement. Though the subject was no longer alive, the company had the information needed to recover assets from the executive’s beneficiaries to compensate for the company funds that had been stolen.
Case #2: Social Media and MLS Listings Tell the Story
Two siblings had inherited a total of $6 million from their parents’ estate. Soon after, the sister conspired with an unscrupulous doctor to have her brother deemed a danger to himself and successfully petitioned the courts to have him committed to a mental institution. After a series of appeals, the brother was finally released years later, only to discover that most of the money he had inherited was gone. This fact prompted allegations that his sister had stolen the funds while he was incapacitated.
Hoping to settle the matter without filing a lawsuit, the victim hired an investigative firm to research his sister’s financial activities and assets. Here’s what they discovered:
- She was in the process of selling a home listed on the market for $3 million. The home had been purchased for $1.5 million in cash shortly after her brother was institutionalized.
- The MLS listing for the home included photos of an open three-bay garage, showing multiple luxury vehicles and several watercraft.
- The vehicle photos were clear enough to get a license plate number for each, prompting research that revealed all the vehicles had been purchased in the previous three years and were registered to a business in the sister’s name (a common method for hiding personal assets).
- The subject’s social media accounts included photos of her and her husband frequently visiting the same extravagant waterfront home. Investigators dug further and learned that the couple had purchased the home for $1.5 million in cash just two years before and were now earning rental income from it.
The victim’s attorney presented this information as evidence that the subject had likely stolen most of her brother’s inheritance and used the funds to enhance her lifestyle beyond what her own share would have supported. The investigation results provided the leverage needed to force a settlement to the victim’s satisfaction.
Case #3: The Trail of the PPP Loans
During the height of the COVID-19 pandemic, many businesses relied on Paycheck Protection Program (PPP) loans from the US government to provide the financial security they needed to retain their employees and stay operational. In one case, these PPP loans provided a trail that demonstrated an investigation subject had the financial resources to pay his outstanding debts.
The subject was in debt to a company to the tune of six figures, and the two parties were negotiating a settlement. At one point he offered to pay a few thousand dollars, claiming that was all the money he had. Rather than accept the offer, the company hired an investigative firm to determine whether the subject was being honest about his financial situation.
The investigator discovered two PPP loans in the subject’s name for two different businesses, one of which was a niche nonprofit organization. Though the business was registered as a nonprofit that typically operates in a specific building, the registered address matched the subject’s home address, suggesting that the business wasn’t actually operating as a nonprofit. By scouring numerous records, the investigator found that the alleged nonprofit was actually quite profitable, generating enough income for the subject to pay cash for an almost one-million-dollar home and multiple luxury sports cars. Had the client not hired a firm to conduct a detailed background investigation on the debtor, they would have accepted a low settlement instead of leveraging the available assets to recover the full six-figure debt.
Pro Tip: Don’t just garnish a bank account; issue a subpoena for the last 24 months of incoming and outgoing debits and credits. Pay attention to even amounts ($5,000, $10,000, etc.). This could lead to additional sources of income or other bank accounts the debtor moved their money into.
How a Skilled Investigator Can Help Recover Assets
As these cases illustrate, when your organization is seeking to recover assets to collect on a judgment, it’s wise not to take the facts of the matter at face value. Even if a debtor claims or seems to have little or no personal assets, it may just be that they’ve been successful at hiding them.
That’s where a skilled investigator comes in.
The investigative team at Subrosa leverages its experience, research strategies, and insights to learn whether there is more to an asset recovery case than meets the eye—scrutinizing numerous data sources (online and in person), conducting surveillance, identifying family members and associates the subject could have transferred assets to, studying their social media and published media reports, and reviewing divorce and bankruptcy records, among many other activities. Throughout the investigation, they connect the dots between seemingly disparate information and follow every lead to identify any assets in the subject’s name or the name of a business owned by the subject.
Many investigative agencies can conduct an asset investigation, but what differentiates Subrosa is our advising attorneys on what to do with the information found in an investigative report. Each case is unique, and a debtor’s assets are different in each case. The investigators at Subrosa are skilled at using the information gleaned in an asset investigation to help attorneys put enough pressure on a debtor to make them want to settle at any cost. Our goal is to help you recover 100% of your client’s judgment!
If you’ve obtained a judgment on a debtor who doesn’t seem to have enough personal assets to collect on, it’s always prudent to dig deeper. Schedule a call with Subrosa to learn how we can help.
