The age of Uniform Commercial Code Financial Statement (they expire after five years in 48 states) would determine extent of possible equity in equipment and fixtures, which may pertain to an individual and/or his business. In case of a manufacturing facility, with depreciation schedules as they are, clearly a 4 ½-yearold UCC-1 on a piece of equipment that was purchased new at time UCC was filed would still retain equity, and thus constitute discovery of a “hidden” asset which may be liquidated.

There is also a little known side of UCC spectrum that is often ignored by examiners. This is searching for “Secured Party” status on a UCC-1. Clearly, this would be where subject is, in fact, Creditor on a UCC-1, with implications of discovery of this type of hidden asset quite obvious. Many states do not provide “Secured Party” status indexing, and thus, while it is not available in most states, it can be expected within certain state jurisdictions where asset search will be based.

Sole Proprietorship Entities

A search should be conducted of Fictitious Business Name and/or Assumed Name Index of applicable county or parish level of jurisdiction to determine if subject’s name appears as a Registrant, or Declarant of a Fictitious Business Name or Assumed Name Registration. The discovery of these items usually constitutes discovery of additional bank account search possibilities, as well as entities and/or enterprises that may be unknown to institution or client.

Other Assets In many instances, an individual could hold offshore assets in form of trusts, partnerships, and so forth. A thorough search of applicable public records within jurisdictions germane to activities of subject can often reveal information, which might lead to discovery of these offshore assets. This particular type of asset search is highly sophisticated, and should be left specifically to agencies that have demonstrated high levels of competence in international asset research. The trustworthiness of agency should be scrutinized before entering into a contract.

LIABILITIES

Litigation

A search should be conducted of applicable jurisdiction to determine extent of possible litigation involving subject from both current and prior perspectives. A standard expectation for research should be primarily an index review of cases, which are outstanding, and if required, an analysis to determine extent of “pending” lawsuits, which, as of date of report, remain unresolved. The search should be conducted on a ten-year basis, with pending actions focused within a five-year window.

Federal, State, and Local Tax Liens

A search of applicable jurisdictions should be made in Recorder’s Office to determine extent of federal, state and/or local tax liens that might impact net equity position of subject. The existence of, for example, a $150,000 federal tax lien could wipe out all equity positions enjoyed by assets discovered throughout course of research. Thus, discovery of this liability is critically important in assessment of subject’s net worth and ability to pay.

Bankruptcies

A search should be conducted through applicable jurisdictions germane to residences and/or activities of subject of U.S. District Bankruptcy Court records for a ten-year period. The purpose of this research is to determine if subject has established a pattern of filing bankruptcy, and/or possibly (in event a bankruptcy is discovered) to scrutinize assets and/or creditor’s list to determine if there was fraudulent misrepresentation of assets and/or liabilities at outset of credit relationship with institution.

Judgments

Searches for Abstracts of Judgments, or Judgments, are usually conducted in applicable jurisdiction’s Recorder’s Grantee/Grantor Indices. The searches should reflect primary judgments that were filed in applicable jurisdiction by court, and can be included in research for pending and/or previous lawsuits at court jurisdiction level. The Abstract of Judgment concept is that a particular judgment is “extracted” from court records, and “abstracted” to county jurisdiction, in order to encumber items of personal and/or real property which are identified, and are targeted for attachment and liquidation to pay off claim. Plaintiff actions can be considered potential assets, and should not be overlooked.

Miscellaneous Liabilities

Additional searches should be conducted on a wide-area basis, both at state level (Secretary of State) and county or parish jurisdictional level, to determine if additional liabilities exist from standpoint of judgments, tax liens, or county-based UCC Financing Statements. These identify specific types of assets such as crops, timber, and inventory. They are not usually found at state level UCC search, and most agencies do not provide them unless requested to do so. This search is more specifically covered in following Intelligence section.

Intelligence

In any good asset search, fraud examiner should develop intelligence throughout course of research that would refer to information as specified above concerning additional names on real estate ownership, transferee names, and so forth. Additional modules of research that should be conducted include criminal histories on individuals targeted within asset search, as well as a search for evidence of known connections with other business enterprises and/or individuals with whom regular associations are engaged.

There are multiple methods of access to this type of information, not least of which would constitute a surveillance (highly unusual in an asset search) which would identify comings and goings of subjects at hand, and would assist in identification of “intelligence” type of data. Additional information is developed with respect to assets, in order to assist in determination of market value so that a net equity figure can be derived for one asset, or a group of assets, from all levels.

To delve into methods of this type of discovery would be to get into mind of fraud examiner working case, and shall not be addressed in this article, but should be included in an overview process in Intelligence Section of any asset search report.

Some other instances where information would be helpful include areas where other tangible net worth is discovered, such as intelligence provided by developed sources close to subject regarding stamp collections, gold coin collections, cash under a mattress, and so forth. This information is highly inconsistent within context of a normal asset search, and, while hoped for, should not be expected as a matter of doing business with a particular fraud examiner. Go to www.apscreen.com for remainder of this article.

That person defaulted, and they should have a good explanation as to why. Judge this explanation on merits of individual situation, not argument that a certain class of people may be disadvantaged. If they borrow, they should pay it back; if they can’t, there’s usually a good (or bad) reason why.

As far as driving histories go, even if person will not be driving a company vehicle, you till need to know manner in which they drive and manner in which they resolve issues that may arise while they are driving. These are nuts and bolts responsibility attitude indicators here – nothing fancy, but good common sense, and very important if you want to make a good hiring decision.

You must know full extend of subject’s criminal history. This can only be done jurisdictionally, and you must see all levels, not just felonies. The courts today are downgrading many felonies in order to stop logjam occurring everywhere in higher courts, so if you don’t research at lower levels you may miss some eye-openers.

Don’t forget that people commit federal crimes, which do not appear in local or state court indices. They have to be researched at U.S. District Court level. Most screening companies don’t do this, and if they do, it’s usually through databases of microfilm. Beware! You need a company that checks all levels, or search is no good.

Many times our company has been hired after an “$8.25 criminal check” failed and someone was subsequently murdered, raped, maimed or defrauded. In these instances, we sometimes not only perform employment screening from then on, but also testify as an expert witness against firm who did faulty job of screening. Beware of companies that offer a newspaper or police blotter clipping service in form of “nationwide” criminal checks. These firms do not cover all areas of U.S., just major metropolitan areas. Most important is fact that root company is many times resold through distributors who might not fully convey that search, while touted as “nationwide,” is actually limited to these more populated areas.

Database Services

Let’s also take a moment to further address growing industry called “database.” It is very important to understand some basic things about database services that they will never tell you. Databases, no matter how good, are only as good as search logic used to retrieve data that’s put in. That’s rub. What you are really buying when you buy a database service is how much database company invested into its search logic.

And this is usually an area where these companies are tempted to scrimp, because good search logic is very expensive. You simply can’t use off-the-shelf software to retrieve this type of publicly compiled repository information. It simply comes in too many forms, and search logic must be able to delineate between different languages that are bridged into database company’s archival system, because all jurisdictions maintain different hardware, software and archival philosophy. It’s a wonder sometimes anything comes back, given diversity of data that goes in front end.

Any computer expert will tell you that no matter how much money you put into best of best, you can never expect 100% storage of information. These are things called “data drops” where bytes mysteriously disappear into thin air. There are also viruses, different from kind you may be aware of which can reside undetected in mainframes for years and which eat data to survive. All in all, computers are still not fool-proof enough to be relied upon, especially where such an important decision is concerned. At this point, you’re probably wondering how to handle getting employment screening into mainstream of hiring process without exposing company to possible litigation for privacy and discrimination issues, not to mention how to use what you have been taught that you need to get to evaluate a candidate’s worthiness.

You’ve probably also wondered how to maintain records, as well as how to qualify firm you are considering to do your screening. Read Factual Employment Screening – Part Two, An Employment Screening Outline, a roadmap that will help you handle both of these critical issues.