Conducting a hidden asset search is a means of locating and seizing assets that have been undisclosed, have eluded previous searches, or have otherwise been purposefully hidden. A debtor’s ability to hide assets can prevent you from collecting on a judgment through reduced cash flow. Hidden assets can also complicate the process of locating non-cash assets, legally seizing and selling assets, and even serve as a barrier between collecting a judgment and receiving payment.
What is an asset search?
An asset search is an investigation and a report of various types of records to determine a person’s or organization’s assets, including bank accounts, automobiles, property, businesses, art, life insurance policies, trademarks, antiques, and patents. All asset searches aim to uncover hidden assets. Most debtors don’t accidentally hide their assets.
Private investigators who specialize in asset searches often work for lawyers and law firms and conduct painstaking research on large monetary transfers, then analyze their findings to provide accurate and reliable information to the attorneys that retain them. Their expertise often earns them the opportunity to serve as expert witnesses in court.
When conducting a hidden asset search, private investigators will search through multiple data sources in order to verify the information. If an asset is poised to be hidden, connections can be made to the debtor. Asset searches will most commonly find assets in the following classes:
Hidden bank accounts
Bank accounts are one of the most common types of hidden assets. Bank statements can uncover where a debtor has wealth and can lead to other hidden forms of assets such as brokerage or investment accounts.
Unscrupulous debtors can create fake invoices and send them to a company that does not exist. They use this method so the money will go directly into their bank account. This is often done with corporations, firms, and other business entities that frequently pay third-party suppliers or contractors.
Real estate & property
A dishonest debtor may attempt to evade debts by transferring ownership of a property to family members or friends. Reviewing documents recorded in the county records office and sales of property within recent years can determine who owns a particular piece of real estate, with the addition of searching online tax records in many states.
By paying the IRS before one’s taxes are overdue, the debtor gives the IRS control of those funds. Once the IRS has control of the funds, they can’t be seized or garnished.
Vehicles and vessels
Because vehicles and vessels are frequently moved, and because they can be difficult to locate, debtors frequently try to conceal those assets by transferring title to relatives or friends, filing false liens against the vessel or vehicle, or creating fraudulent ownership documents.
Business and corporate interests
When a debtor places assets into a corporation, the assets may be difficult to tie to the debtor. However, corporate records are not secret, so they can be accessed by the public through each state’s Secretary of State database. If you believe that a debtor is hiding assets in a company, it is important to investigate the company’s ownership thoroughly.
When conducting a hidden asset search, you may discover many different assets. Some assets are easily traced, such as purchases made through trading accounts or cash. Others are more difficult to trace and require more time and research effort. It is important that you develop a method of tracking your debtor’s financial movements before filing a lawsuit. A good way to do this is to begin your investigation prior to the legal action. This will help you find any potential hidden assets before your debtor has the chance to conceal them. Once discovered, an asset cannot remain hidden for long.