As Part One suggested, to properly identify a non-corporate subject, fraud examiners in non-law enforcement environments should take following steps:

Obtain credit reports form three major credit bureaus, per FCRA requirements

Obtain social security traces form three major credit bureaus.

Obtain address update/credit report header information from three major credit bureaus.

Match information obtained through independent sources to information presented by subject of asset search.

Part One also provided suggestions for determining assets, including real property ownership, vehicular searches, vessel ownership, aircraft ownership, and banking information. Following is additional financial and business information that should be gathered, as well as liability-related data that impacts subject’s net worth in a recovery action.

Financial Information

Credit reports should be obtained from all major credit bureaus in order to completely determine subject’s credit worthiness or credit status. The Federal Home Loan Mortgage Association (“Fannie-Mae”) determined several years ago that a minimum of three national credit bureau repositories should be accessed to develop credit information prior to qualification for a mortgage loan. While this is standard, many companies do not provide this information in pursuit of asset search, and limit their request to only one major credit bureau. Some difficulty also exists with respect to investigative community’s lack of access to major credit bureaus, and many credit reports procured for investigative purposes are, in fact, procured through third- and fourth-party blind sources.

Credit bureau-based research agencies are usually your best source for credit and financial information, as well as banking data, since their primary focus is in credit community and understanding limitations of credit system, as well as knowledge of “better” access to credit bureaus. This assures their continued success in operating their business.

Credit reports are important not only from standpoint of providing identification information, additional addresses unknown to client, and/or additional name variations in form of aliases and/or akas, but they also provide an almost up-to-the-minute window of credit activity pertaining to subject. This gives an impression of subject’s credit worthiness with respect to paying off obligations subject is currently faced with, not to mention, in many cases, his or her current whereabouts.

If an overwhelmingly favorable credit report is generated on individual, chances are strong that subject may be hiding assets, and a more aggressive collection and/or litigious pursuit is justified. If individual’s credit is in a “pre-bankruptcy” mode, chances are strong that lack of discovery of available assets, which would affect decision whether to charge-off or litigate matter, is more easily palatable by analyst.

Credit histories also contain adverse public records that may not have been developed throughout course of search, since primary search parameters are on an exact name basis, and usually a specific jurisdiction basis only. The benefit of credit reporting agencies is that they procure information from large repositories, which contain information from jurisdictions that may not necessarily be germane to original asset search request.

Corporate Affiliations

A determination of an individual’s Officer/Director and/or Registered Agent status within a corporation is important to determine whether or not that individual may own stock in that enterprise, which can also be determined somewhat by a search of applicable public records within certain state jurisdictions. Some states do not provide public access to information with respect to stock ownership in corporations, yet many states do provide information with respect to Officer/Director and/or Registered Agent status of an individual.

These searches are conducted at Secretary of State level, and if information is developed, certain other information with respect to corporate enterprise may be provided. This includes status of corporation (i.e., good standing, suspended, or forfeited), filing date and filing numbers of corporate enterprise, and subject’s affiliation with enterprise.

Many states require a secondary search level to be undertaken, which is procurement of a “Statement of Officers/Directors” (ET SEQ.). There are database repositories, which provide President and/or Registered Agent information. However, most searches that develop Officers and Directors must be conducted by hand at applicable state jurisdiction. Security & Exchange Commission files provide information on individuals who own more than 10% of a publicly held or publicly traded corporate entity. This search is conducted by database through a few private companies, and searches are, by and large, undependable. The searches conducted directly through SEC, which are extremely time-consuming, are only valid searches to rely upon within this instance, and for all intents and purposes, inside information with respect to this file indicates that it is roughly 80% accurate and complete.

Partnerships

Searches for partnerships, be they limited partnerships, general partnerships, or specific partnerships, are conducted at state and local jurisdictional levels, depending upon state. In California, for example, searches at California Secretary of State’s Office identify “LP-1” Statements, which are filed by general partner of limited partnership, and identify not only a name reservation, but also name of general partner of business. This one-page form is not a full-blown search with respect to partnerships that could pertain to an individual. The search conducted at county or parish jurisdictional level would identify all general partnerships, which would be required to be recorded and limited partnerships which own real estate.

Uniform Commercial Code Filings

In 1979, our company set out to learn how to not only provide best possible background checks, but also to determine just where “factual employment screening” would fall in scheme of things. To understand why “screening” is where it is today, one needs a little history of subject.

In beginning, screening usually started with security department. These were typically highly qualified, deeply motivated, wholly energetic, recently retired law enforcement professionals who were completely inundated. After being given entire responsibility for safety and security of company, its executives and their families, they were given task of qualifying those who would pass through gates each day as employees. Since these individuals were for most part “old boys,” they sometimes used, in today’s politically correct terminology, “improper” methods of “checking out” applicants.

This responsibility typically stayed in security department until about late 1970s, when what are now called human resources departments saw need to get in loop for what was to become “employment screening.” Needless to say, those “improper” methods referred to have all but disappeared in smart companies. However, due to lack of knowledge of some human resource personnel when it comes to things like criminal records, credit reports, and driving histories, some have fallen prey to those who would sell them “employment screening” at touch of a button. As you will see later, this can pose a big problem.

Why do you need to know this simplified history? Simple – not all companies evolve equally, and in order to understand whether or not you are going to get your pilot program of employment screening to fly, you need to know where exposure for negligent hiring will rest in scheme of things. Talk about inner conflict – try to become thoroughly knowledgeable in either security or human resources area, let alone both! These are two disciplines, which may rarely see eye to eye on anything.

But you are going to have to know both equally well if you re charged with spearheading drive to get your company’s management to commit to a competent policy of factually screening employment candidates, regardless of your position. In this era of “political correctness” we are often reminded that, more often than not, something cannot be “right” or “wrong” because of judgmental connotations those words convey. Employment screening is not immune to this distinction, but as well all know, facts are facts, and vent best con artist can’t dispute them. This is why you must be thorough in conducting a background check.

This article will not address drug testing, psychological testing referencing, or verification work, as these areas do not yet have as many legal implications surrounding them, and most employers have their own methods which are about as unique as fingerprints. However, following recommendations are suggested for a comprehensive screening program.

Three “Must Knows”

You must know person’s true identity by obtaining positive candidate identification. Major recent studies have shown that as much as 20% to 30% of population maintains undisclosed aliases or AKAs. This is critical, since checking a wrong name for criminal convictions will yield a “no record” response almost every time. There are many ways that an identity can be verified and cross-checked without breaking law. These are usually proprietary to vendor, but can include social security number traces, driver’s license number checks, address-telephone verifications, and a myriad of other attainable bits of research.