Locate Hidden Assets
Asset Search Investigations
The Bank Account.
The financial transaction may relate to a bank, or it could relate to another category of financial institution: a savings and loan association, a brokerage account, a credit union, a pension fund, or any combination of these institutions. Or it could be a pure cash transaction.
At all financial institutions two functions occur: money flows in and money flows out. In a hidden-asset investigation, the money flowing from the account may be the investment in the hidden asset. The money flowing into the account may be even more important.
When an account has been identified as the source (or possible source) of an illicit investment, you must secure that account in its entirety. That account can only be secured by proper legal process to the bank or other institution, or directly to the subject business.
Often it is preferable to secure the financial records directly from the subject business or the suspected front, for a number of reasons. You will be securing the original document, which is, of course, the best evidence. Also, you may obtain the records even faster and you will eliminate the possibility of poor quality documents so often associated with financial institution duplication.
This method is suggested but must be tailored to your investigation. If your effort is overt at this phase of the investigation, the bank or financial institution can be used as a backup source for documents not received from the subject business or suspected front.
Upon receipt of financial records, tracing of investments begins. Assuming that the investigation has revealed an investment of a specific amount from a front’s corporate account, the following should be analyzed at once:
- All opening account deposits should be obtained and examined.
- All major deposits shortly before and shortly after the date of
investment in the illicit enterprise should be obtained.
- All cash deposits during the same period as (2) should be noted.
- Establish a dollar threshold based on the magnitude of the account and
record all deposits greater than that threshold.
- Complete (4) for all withdrawals of funds.
- Pay special attention to even-dollar disbursements.
- Identify and investigate all regular payments for potential leads.
- Note all wire transfers and credit memos for a follow up investigation.
Pursuit of the above items should be the initial steps in the analysis of bank or financial accounts. The purpose is to identify funds of major proportion flowing in and out of the account to the subject of the investigation or his accounts. It may also generate new lead material.
In the analysis of bank accounts, it is crucial that attention be given to detail and items small in size. Although you may want to focus initial investigation on the major items in the account as suggested above, do not overlook the balance of the records. They could be critical.
There are an array of banking records that could prove valuable, including certificates of deposit, credit card advances and currency transaction reports. Loan records deserve special attention.
If a deposit analyzed in the financial records was generated as a result of a loan, it should be pursued diligently. Several questions should be addressed. Who applied for the loan? How were the proceeds deposited to the account of interest to the investigation? And perhaps most important, how was it secured or collateralized?
Answers to these questions regarding the loan could tie your target to the business, especially the security or collateral for the loan.
Along with bank records, consider the banker. The banker could be the liaison between the loan for the investment in the illicit asset and the subject of your investigation. He may also have intimate knowledge of the business and may even be an informal advisor. Include the banker in your investigation as a possible valuable source of “inside” information concerning the ownership and operation of the illicit enterprise.