After conducting asset research for over 14 years for such demanding institutions as FDIC, FSLIC, and RTC, as well as major hotels and casinos in gaming industry, property management firms, and many of nation’s larger law firms, one thing that has emerged is a distinct lack of information – not about type of items searched, but depth and quality of other searches. In cutting to chase, following is result of compilation of asset search guidelines, and should serve to assist in setting at least a baseline standard for developing a viable domestic asset search strategy.

Subject Identification

Prior to beginning acquisition of information on any subject of an asset search, subject should be properly identified. Studies have shown that as much as 30% of American population uses undisclosed aliases and/or “akas” to conduct and transact various levels of personal and professional business. This statistic does not take into account existence of corporate, DBA and/or partnership entity names, which are created to transact various forms of business on behalf of principals of said entity. To properly identify a non-corporate subject, following minimum recommendations are made for non-law enforcement environments: Obtain credit reports from three major credit bureaus, per Fair Credit Reporting Act (FCRA) requirements.

However, make sure that obtaining reports is in compliance with permissible purposes as defined in Public Law 91- 508, Title VI (FCRA), to avoid tainting your pursuit should matter ever be litigated. Remember, in context of this discussion, we are focused on asset searches as recovery medium, and basic assumption is that asset search has already been determined to be sanctionable. This could be determined, for example, by a loan in default, a judgment that has been rendered, or a court order obtained for release of credit information in cases that are not clearly defined under FCRA.

Remember this simple guideline: credit reports are legal post-judgment, for purposes of collection, and/or where consent has been given somewhere in stream of creditor/debtor relationship. In case of a receivership institution (i.e., where a director is being scrutinized for alleged conversion of assets), consent may also have been given for a credit history during pre-employment evaluation or as a policy-based condition of employment.

This is referred to as “extended consent,” and constitutes valid use, especially in matters where a criminal investigation is under way, and where conversion of assets is factually alleged as result of a forensic audit or proven by admission. Be careful, though, as “extended consent” from employment perspective is still a gray area under law. The following two items are available from credit bureaus and their sub-vendors but have less coverage extended to them under FCRA, yet “FCRA compliance attitude” should be used when accessing them:

•Obtain social security traces from three major credit bureaus. •Obtain address update/credit report header information from three major credit bureaus. •Obtain voter registration information for applicable jurisdiction germane to primary, or most recent, residence of subject. Some states have compiled voter data through private repositories, which should be checked for movement.

Match information obtained through independent sources to information presented by candidate in form of credit application with institution, and/or information developed independently by institution in initial credit qualification process.

Many other methods of identification exist, but above represents very least that should be done. The reason for obtaining information from all three bureaus, instead of only one, is to develop any alias and/or aka data, as well as current addresses (not specified), and/or any additional addresses that may provide venue data. This will assist asset searcher in determining whether to advise client to proceed with asset discovery in additional areas unknown to client at time asset search was requested.

Address verifications are usually difficult without a physical inspection of address in question, including a visual identification of subject entering and/or leaving address. Address information that is cross-referenced and verifiable through major credit bureau repositories is usually presented in an asset search, and in most cases is very reliable.

To discover current telephone number of subject, methods available to fraud examiner include nationwide telephone directories, criss-cross directories, directory assistance contact, and attempts at contact existing telephone numbers known by client. There are other methods of telephone number development available. However, these methods should not be utilized by a CFE in order to avoid tainting legality of pursuit, in even that litigation is ultimate undertaken.

Assets Determination

Assets determination usually constitutes an integration of certain liability data to offset assets “worth” in order to arrive at a net equity position. This is especially true in identifying and analyzing real property assets. There are multiple forms of asset determination, which are described as follows: Real

Property Ownership: A search should be conducted of applicable county jurisdiction. The exception is in California where a statewide assessor’s index is available, usually through “lien date” of prior year. This repository is made available through a private company, and is in no way sanctioned by any public jurisdiction. For traditional searches throughout rest of U.S., per jurisdiction research is conducted at assessor’s office to determine if name exists on assessor’s roll, and/or if known property (address) crosses-verifies to suspect owner.

A search of applicable jurisdiction’s Recorder’s Grantee/Grantor index (or general index as it may also be known) is then undertaken to determine if property is still vested to subject, and if any open Deeds of Trust and other liens exist which identify liabilities against property. The search in recorder’s venue should also identify (in jurisdictions where this is possible) Documentary Transfer Tax Stamp amount, which should be divided by applicable factor.

Policy Development

A policy of Factual Employment Screening; Personality Evaluation/testing; and/or Drug Testing should be developed and embedded into core policy manual rather than exist as a supplement or bulletin policy. This avoids any “after fact” ramifications, should policy be challenged under discriminatory theories.

The policy should have an effective date, and if corporate philosophy is for “purification” of existing staff, then a policy implementation should be evident, along with reasoning for retroactive purification of staff. This is common practice following a recently resolved internal problem, where specific numbers of staff have been terminated for one problem or another. No justification is needed when implementing new programs if purification is in line with philosophy of company.

Policy Guidelines

Consistency is key when establishing new policies, especially when said policies enter into gray and ever-changing areas of human rights and right to privacy. For example, when establishing any screening parameter there must be absolute consistency within each specific employment class in order to avoid obvious Title 7 ramifications. Additionally, inconsistent programs will invalidate any baseline, as companies providing employment, drug, and psychological screening have no industry-based uniformity, and new variables can enter picture which will skew standard.

Date of effective program

Set forth date of management’s decision to implement screening programs and actual date of implementation.

Referral to Employee Classification, and overview of class requirements

These details can be included here, but are best left in general terms to allow for modification at a later date. Each class would have specific screening requirements, which would be determined by management as to job, applicability, exposure, and other employee interface. Sample general class terms include Fiduciary Capacity Employees – Non- Exempt (cash handlers and janitors with key access): Management/Policymaker (those who would set policy and those who have signing authority); Management/Mid-level (those who supervise others); and Sales Force – Outside (those who would be field personnel and those who would use company vehicles).

Formology

Forms and/or procedures applicable to each specific employment class should be developed to ensure processing consistency and provide a competent audit trail for future reference.

Referral of candidate (by name) to firms conducting various levels of screening.

This is very important as baseline for screening rests with vendor since no industry guideline exists. It is also critical in combating allegations of age/policy/screening discrimination. If you are curious about changing a vendor, this should be done with a memorandum of policy modification, rather than a core change, which will survive litigation if effective change is implemented across board for hires subsequent to date of vendor change. Good, Solid Factual Employment Screening is not Ultimate Decision-Maker you are.

Policy decision

This should rest with top corporate management, or at highest divisional levels. It should be included in minutes of board meetings, and disclosed in publicly held (10K/10Q) firms as a negligent hiring mitigator. The policy can be used as a positive offsetter for ongoing litigation disclosure requirement in 10K/10Q.

Vendor Selection

A thorough background check on firm supplying service should include:

.How long in business?

.Type of criminal conviction research (hand vs. database), as well as if and how discoveries are verified against subject identifiers.

.How deep are research and data capabilities?

.National research capability

.Licensure designation (PI, reporting agency, credit bureau, and so forth).

.For older firms like guard service companies, how long since they “got into fad” of employment screening?

.Press noteworthiness .Depth of human resources vs. security experience (both is optimal).

Litigation history (errors/omissions).

Depth of professional liability insurance.

Who runs division?

.Cost/turnaround/reporting method – raw data is instant death; a “compiled report” is best.

.Jurisdictional coverage and researcher consistency – avoid database vendors.

.Analysis of ancillary services (i.e. How can a new private patrol operator or recently retired police officer afford to have thoroughly researched nuances of employment screening laws in all 50 states?)

.How often is program reviewed by counsel?

Screening Program Review