Consumer reviews of commercial businesses have become an asset or liability for an enterprise. Websites such as Yelp, TripAdvisor, and even Facebook are sources of content where potential future clients and customers research information prior to deciding to do business with your firm. Attracting new clients is the lifeblood of a company, and positive reviews are crucial to maintaining a healthy bottom line.
There may always be a few clients in any business which cannot be pleased even with the best intentions and efforts of the merchant. These may simply need to be absorbed among the high volume of positive reviews from the vast majority of clients which a well-run and successful business cultivates. As competitors become more desperate that your successful company is retaining all of the customer in a market, they are resorting to posting fake negative reviews against your firm. This damages the extraordinary reputation which you worked hard for, and improperly benefits a company which has not rightfully earned the customers business. It also harms the innocent consumer in that they will be more likely to be exposed to less admirable business practices of the competitor. The consumer is also more likely to pay higher prices to a less efficient company. Fake reviews are real and significant threats to the viability of the business.
When a highly rated company needs to fight back against fake reviews, a skilled professional investigator can assist with discovering the source of the fraudulent activity. An investigation of review fraud can result in the fraudulent posts and reviews being removed, the perpetrator being publicly identified, and even paying restitution. A competitor acting in bad faith will also cease these actions when caught. Fake reviews are a form of fraud against a business, the same is paying with a bad check or embezzlement.
These reviews may be written by employees of a competitor, an owner, or even an individual with a personal grudge against you or your firm. The origin may even be from long in the past. A professional private investigator skilled in discovering review fraud knows the methods to reveal this otherwise hard to prove activity. A licensed private investigator has access to records which are not available to an individual. In addition, there are techniques to obtain information directly from the fraudster through covert direct contact. Experienced investigators know where the hidden records connecting the fake review to a specific person are stored. Even older records have an archived or backup file with the contact information. The extracted records from websites, ISP, cell providers, and app accounts combine to a trail of evidence to the culprit.
A review fraud investigation can identify the name and location of the individual who placed the record online along with corresponding contact information. The exact date and time of the post may be available to tie the location to a specific event. Undoing the fraudulent negative reviews comes next, and there is a fast growing area of legal practice dedicated to obtaining compensation from competitors or clients who fraudulently damage a business. The logic is the same as if the person damaged property.
If a business owner came to their company and discovered the front window broken, they would not hesitate to investigate who caused the damage and make sure the party responsible was punished, and made restitution. Combating review fraud is no different. In fact, the financial damage to a company from fake reviews may be more severe, even if it is spread out over time.
A judgment debtor who comes into a large payment may look for ways to keep this asset from being visible to creditors. Let’s examine three methods, and also how a professional investigator can discover each of them.
1. Cashiers check shuffle. The subject takes the check, which is made out to him, directly to the financial institution from where it is drawn. He instructs the teller to convert it to a cashiers check under the pretense that he wants to verify the validity of the check and available balance. The cashier creates a cashiers check or teller check in the same amount, made out to the subject.
The subject can now use the cashiers check like a virtual savings account. Each time he needs to make a “withdrawal,” he can visit any branch of the bank, and get cash plus a new cashiers check for the remaining balance. If the check is $15,000 he can ask for $500 in cash, and a new $14,500 cashiers check. He can even get multiple cashiers checks made out to new payees in order to send payment to third parties. None of this activity appears on any financial statement, bank account records for the subject, or tax return.
The subject can continue this shuffling of reducing the cashiers checks until the sum is depleted with no paper trail connected to any account or social security number. There is a slight risk of a bank employee submitting a Suspicious Activity Report (SAR) if there are frequent visits to the same branch, and the subject is remembered. However, this record is only submitted to the US Treasury Department and is not discoverable by the private sector.
Uncovering the method: A private investigator should look at the source of funds for all transactions and payments benefiting the subject debtor. Payments for cell phone bills, utilities, and even loan payments should be examined to see what account they come from. Any payments made came from checks broken off from the original cashiers check, they can be traced back to the teller instrument.
“Withdrawals” for spending cash can be discovered through surveillance. The subject will have to physically visit locations of the issuing financial institution to break down the check and get cash. This creates a record at the bank level which can be subpoenaed after the activity is observed. In many cases surveillance is recommended when a subject appears to be using more cash than he should have available. Bank or ATM visits are usually observed which turn into revealing the source of cash.
2. Third party conversion. In this method the subject endorses the check instrument directly to a trusted third party. Since there is no payment from any account held by the debtor, a simple account search by a private investigator would not reveal any transfer. The asset conversion went directly from the payee to the third party, skipping over the debtor. The third party can dole out funds to the debtor on request.
Uncovering the method: It is usually simple to determine the 5 or 6 most trusted colleagues of a subject. Close friends business associates, relatives, and spouses are the most common. A private investigator makes a direct contact with the most probable subjects and directly asks if they have received any payments from the debtor. These parties are usually unsophisticated to fraud and will either reveal the payment (with some excuse for why it was made) or hedge their answer in a way that an investigator will recognize as deceptive. In some cases the third party is not even aware that the payment is improper, and will have been told by the debtor some story as to why it is being made.
In any case it will likely result in the third party wanting to distance them self from the fraud and will prevent any other colleagues from replacing the first “trustee.”
3. Casino Royale. As legalized gambling is more ubiquitous, debtors no longer have to travel to Las Vegas or Atlantic City to access casino financial systems. A third party check made out to the subject may be able to be used to purchase casino chips or to guarantee a marker. Not all casinos do this but there are mechanisms to make this happen. As long as the amount does not exceed $10,000, there is no need for an 8300 form.
The subject an retain the chips and return to the casino to cash in amounts for expenditures as needed.
Uncovering the method: Start with casino loyalty accounts. Even though the subject is concealing assets, it might be tempting to get more comps from their casino card. Trash pulls can help with this method. A recent high dollar transaction can initiate marketing from the casino. After that an investigator can resort to the surveillance method from the Cashiers Check Shuffle.
4. Debt Shadow. We came across this scenario a few years back. A subject had received payment of $8000+ from a client at about the same time he was being divorced. In order to shield the money from the divorce settlement, he created a new out of state corporation and endorsed the check to that corporate bank account. He could have simply withdrawn fund from that account but to further distort his financial picture for the divorce, he obtained a personal loan secured by the funds in the corporate account. This way his personal net worth was reduced by the loan amount, and he did not report the asset on the PFS.
Uncovering the fraud: This one was more complicated than it was sophisticated. A checklist for a private investigator should always include reviewing credit applications for any loans, leases, or lending activity within the past 12 months. The application itself had the “Secured Account” box checked off on the form. Even if that was not the case, an inquiry to how the loan was underwritten, and also the source of payments would have discovered the scam.
Conclusion: The movement of money always leaves a permanent record of the activity. It is the role of a private investigator to know how to discover each of the subtle signs of asset motion. In all of these methods, it is also important for the private investigator to be aware of what payments should be expected to the subject. Reviewing a prior history of vendor payments, commissions, contractual due dates, and historical bonus’ will make it obvious when a payment does not show up when it should have, or in the same amount is has previously. A professional private investigator skilled in asset recovery can discover any asset, any time given the proper investigative resources.
Asset Recovery – Top 10 Reasons to Initiate Civil Action Against Fraudsters Before Criminal Prosecutions are Completed
In many instances the civil asset recovery cases we work on have fraud associated with them which is being prosecuted by the public sector. For some victims it is tempting to wait for completion of the criminal case against their creditors in the hopes that the sentence will include restitution. In theory this would meet their need for recovery without the expense of a private civil case and investigation. However, the needs of victims are best met by being specifically represented through a private investigation and receiving professional legal advice.
1. Plea bargain. Criminal cases are most often settled with a plea bargain. In a plea agreement the elements of prison time, sentencing guidelines, and government fines are considered along with any restitution. Due to requirements of the legal system to meet certain guidelines, the government attorneys may need to bargain away restitution first in order to uphold sentencing guidelines.
2. Statute of limitations. A criminal prosecution can take several years, which may extend the tolling of time past the statute of limitations for initiation a civil case for all of the losses.
3. Third party liability. The criminal prosecution only deals with the activities of the subjects charged with crimes. Successful asset recovery in fraud or Ponzi scheme cases extend liability to 3rd party enablers such as financial institutions, sales people, accountants, title agencies, and professional advisers. The activities and assets of these parties are not investigated in a criminal case against the direct defendants. Ponzi schemer Scott Rothstein’s victims sued TD bank for $67 million after in investigation showed that their internal policies allowed the fraud to extend and damage victims. A private investigation and civil lawsuit discovered this new asset source.
4. Spoliation of evidence. In the time it takes to prosecute a criminal case, important evidence which can be valuable to asset recovery can dissolve. Records, documents, witness memory, and even the assets themselves can disappear. Also, during a criminal case third parties are careful not to dispose of or destroy documents. Once the criminal case is over there is no need for these to be retained. Third parties and even the fraudsters themselves are less likely to move assets during a trial since they are under additional scrutiny. Once the trial is completed with a verdict or plea, assets and records are often moved immediately. In one case, a bank executive committed fraud and then filed bankruptcy. It was discovered that he had hidden hundreds of thousands in assets by purchasing antique furniture and decorating homes of himself, friends, and relative with it. The furniture appeared to be normal to the untrained eye and was overlooked as being of value. When the fraudster was released from prison he simply began selling pieces for thousands at a time to support his lifestyle. The scheme was uncovered later but it was after the statute of limitation ran out for victims. The man went back to jail for bankruptcy fraud but most of the asset value was gone by then.
5. Expanded recovery. When a defendant pleads to a lesser charge, it can remove avenues of additional recovery such as treble damages, or multipliers due to victimizing senior citizens. Once a fraudster knows they are already going to prison, they may not fight to reduce their time by a few months or even a year if they can limit the restitution amount. This gives them more capital to access upon completion of their sentence.
6. Scope of investigation. In a criminal prosecution the depth of investigation can be cut off in a plea agreement. If a defendant pleads guilty the entire criminal investigation may never finish. Asset concealment discovered by private investigators may turn out to be an additional crime committed by the fraudsters, which can be an additional prosecution for the government, leading to additional asset recovery.
7. Private investigation. The criminal investigation only focuses on the criminal law violations and activity. It does not specifically look at the financial activity directly, only as it relates to crimes. A professional private investigation has the latitude to look at activity beyond just the criminal to locate assets and other parties with liability. The investigation may also suggest new legal theories of asset discovery for attorneys, such as constructive trusts or fraudulent transfers. Investigations often turn up previous similar crimes perpetrated by the defendants.
8. Plea types. A successful case disposition against the defendant may have no benefit to victims. A guilty plea can be entered under the Alford doctrine (or Kennedy plea). In this scenario the fraudster says the he or she did NOT commit the crime, but acknowledges that the government may be able to prove they did. It is used specifically to avoid civil liability for criminal actions. Even a plea of nolo contendre can be neutral to civil asset recovery. The defendant is not saying that they committed a crime or not, just that they are not fight prosecution. They are free to fight civil recovery at a later date. An Alford or nolo contendre may not always offer estoppel against future civil claims, but it does end the criminal investigation. The disadvantage for victims is that they now have to start over with their asset recovery case, without the benefit of an investigation which has been in process during the criminal trial.
9. Scope of crimes. There are many instances where a private investigation discovers that the scope of crimes is greater than the original indictment. Charges can be upgraded or refiled based on new evidence developed, or when the scale of financial losses is found to be greater. A private investigation of fraud can reveal this since the district attorneys case can be limited by budget, time or other case load. This is common even prior to arrest. We have seen many fraud cases presented to law enforcement where the original arrest was not made due to the perception that the events were a civil matter. Once a private investigation revealed that crimes were committed, and represented to the government the criminal prosecution began.
10. Restitution. An agreement to provide restitution in a plea agreement or even in sentencing from a guilty verdict may not be as valuable to victims as believed. A restitution agreement may cap the amount lower than what could be claimed in a civil case, and it them limits victims from pursuing higher amounts. The prosecution may set the amount based on visible factors such as ability to repay, and perceived losses. A more complete private investigation can reveal that there is more available for recovery than the government discovered in an initial investigation. Criminals are known to manipulate the picture available to criminal prosecutors, who may not have accounting and financial experts as resources.
Bonus #1. Support criminal case. A concurrent civil investigation can suggest discovery in the criminal case. Records, testimony, depositions, and affidavits can be taken in a criminal case and potentially used in the civil asset recovery. The private investigation can uncover details for the criminal case which can be pursued in the criminal trial. Some of this evidence may not be available for discovery unless initially sought during criminal trial. For example, a banker can object to providing an affidavit of activity in a civil case, but may be compelled to do so in a criminal trail against a client.
Bonus #2. Related crimes. Supporting crimes can provide sources of asset recovery for victims. If a fraudster files bankruptcy, any assets hidden from the trustee exposes the claimant to charges of bankruptcy fraud. If this charge is included in a plea agreement, it makes it more difficult to pursue those assets. The same holds true for tax evasion. Rolling these charges into a final plea insulates a defendant against prosecution for prior actions.
The prosecutors office represents the state or federal government, to enforce laws. It does not specifically represent the victims of a crime. While their efforts are responsive to victims, their efforts can be limited due to the priorities of prosecuting and obtaining sentencing percentages. Private investigators and an expert legal team represents the victims directly, protecting their rights and supporting the specific outcome of recovering assets. Many times prosecutors will press harder for deeper convictions when they see victims fighting back.
A restitution ruling is not a new asset for the victim. It is simply another form of a debt owed. As a victim, you already have a debt owed. The government does not represent a better method of recovery. It may be a potential “collection” method only. Asset recovery is separate from collections. Collection efforts are a form of begging a debtor to voluntarily give up some of their money. Fraudulent debtors already have proven that they do not do this.
Asset recovery professionals do not look to beg money from a debtor. They look at the cash as already belonging to their client, the creditors. It is simply just temporarily located in the hands of the debtor. Asset recovery is actively seizing that money back. Asset recovery specialist is a repo man for victims money.
In addition to getting the victims money back, this serves the purpose of taking power from the fraudsters. It removes their ability to fund their criminal defense, and takes away startup capital to start a new scheme later when the dust is settled on their case. Fighting to get all of the assets back may actually prevent future victims of the fraudster.
It is easy to think of just writing off the losses and not fighting back. The fraudster is counting on that to keep their criminal punishment to a minimum, and retaining as much cash as they can. The third parties who enabled the fraud are counting on the losing parties to be victims again, so that they can live to scam again.
In fact, fraudsters survive because they count on victims to be passive and not take the extra effort of initial due diligence and investment monitoring. Waiving the asset recovery investigation is just the extension of this philosophy which empowers the fraudster, and lets their third party colleagues get off Scott free.
Some investors in the infamous Bernie Madoff case elected to allow the bankruptcy case to complete before going after third parties. In one instance there was a $2 million claim against a “feeder fund” financial institution which was dismissed with prejudice because it had gone beyond the allowable time for arbitration through FINRA.
It is prudent to be cautious with future expenditures on fraud claims. However, remember that investigators and attorneys are not equal to the people who took your money. The are licensed, dedicated advocates who work for you, not just money shufflers make money from nothing. Investigative expense may be tax deductible and victims may be able to claim investigative expenses as additional damages from the fraud.
Individuals considering performing their own investigation should always make themselves aware of the various laws which cover activities related to their case. Professional licensed private investigators who perform these activities are attentive to laws, regulations, and statutes surrounding their duties to ensure that the clients liability is protected.
A few areas where individuals get into trouble when attempting to perform investigations are as follows:
1. Pretexting – Using a false pretense to get information may be allowed in some instances, but there are restrictions on the use of certain information with severe penalties for violators. Federal law prohibits obtaining personal information using pretexting, with penalties including felony prosecution.
2. Trespassing – Entering private property without permission can be illegal in many cases. Even if the trespass was not on the subjects property, evidence such as video can be excluded if it can be proven that the photographer was on some other private property without permission when filming.
3. Two party recording notice – Audio recording of voice may require the consent of all parties to the conversation. Various states may have statutory provisions that recordings have one party notice, and others necessitate all parties agreeing to being recorded.
4. Image recording – Photo or video recording may be allowed, but there are restrictions on recording where the person has an expectation of privacy. For example, it may be illegal to photograph a person in their bathroom even if the window is open. In addition, using magnification or enhancement of images can be illegal if the persons location is remote and they believed that their distance prevented viewing with the naked eye.
5. Audio enhancement – Audio can be monitored without recording, but there may be limitations on enhancing the sound using a parabolic dish or laser mike. Listening to sounds not audible to the human ear without assistance might be illegal.
6. Stalking – It is very easy for “surveillance” to turn into stalking especially when performed by a non-licensed person. The typical scenario is when a spouse follows their partner to gather information or an employer observes a worker. The subject can sue or even prosecute for harassment or stalking. If the pursuit is without a legitimate purpose or for intimidation the liability can be extreme. A person can also get into trouble if they break any other laws while doing surveillance. A person can even document their own speeding or running a red light if not careful.
7. GPS tracking – Individuals can get into big trouble monitoring of a persons movements using GPS. It used to be legal if the person placing the GPS had ownership or legal interest in the vehicle, but recent cases have shown that an amateur investigator can still run into trouble if the driver of the car does not have knowledge of being tracked.
8. Computer hacking or monitoring – Placing a keylogger or activity monitor on a PC or smartphone has to follow strict guidelines. If the activity being recorded includes sensitive or personal information such as emails or form submissions, the observer can be liable.
9. Reveal investigation – Licensed investigators cannot legally reveal the information in their cases except to their client. An unlicensed individual does not have this protection, so that all of their activities and information gathered is open for discovery.
10. Firearms – Since investigative activities can place a subject in more dangerous scenarios, many licensed investigators carry firearms while on duty. This requires a license in addition to the investigator license, and even beyond the standard CCW or civilian pistol permit issued by some states. A private individual performing unlicensed activities has to choose between being unarmed while performing potentially dangerous activities, or illegally carrying a weapon. A civilian CCW license is likely going to be deemed invalid if the person was doing any type of investigative activities.
There are hundreds of laws which need to be taken into account. Local ordinances and state statutes are specific to the geographic area. Fedeal laws such as the Fair Credit Reporting Act (FCRA) covers many types of uses of personal information. The Drivers Privacy Protection Act (DPPA) protects the use of information such as license info, license plates, driving records, and VIN numbers. The Graham Leach Bliley Act (GLB) prohibits many types of pretexting and use of personal info.
Knowledge of these laws is important to keep any activities from becoming a lawsuit or even criminal arrest. In the best case scenario any information gathered would not be able to be used in any court setting, and the credibility of the do-it-yourself investigator would be harmed.
There are some areas where a person can do their own investigations such as looking up information online, researching Facebook activity, or making a few phone calls. In any case, be sure to keep good records and notes of dates, times, and details. Any other documentation of the activities is recommended.
The well being of minor children is difficult to manage when the other parent is estranged or contentiously divorced. Controlling dangerous access and harmful influence to minor children. Issues to consider for a child’s well being run a large range from being properly seat belted when driving, to correct nutrition, to being exposed to inappropriate behavior such as narcotics use, excessive drinking, and sexual activity. The concerned parent cannot be present for each visitation or custodial time period. Parental care and attention during visitation is critical to a healthy development of the child. Recognizing any deficiency as soon as possible can reduce these effects.
Monitoring of the contact with the questionable parent can have excellent results. We have seen examples of a parent shirking their allowed visitation to gamble at casinos, visit prostitutes, or attend trivial functions. We have also seen parents with their children present engage in activities such as nude intimacy with their new partner, using drugs, and driving under the influence. We once observed a parent traveling at over 100 MPH with both of his children in the back seat of the vehicle. Having documentation of these events was the first step in eliminating their influence on the children.
Documentation of these activities can allow for the concerned parent to obtain a more restrictive visitation, or even terminate visitation. The court ordered agreement granting custodial or visitation rights for the questionable parent will have other directives in the language. There may be requirements to foster a particular religious faith, or to not speak disparagingly about the other parent in the presence of the child.
A professional investigation starts with an analysis of the original custodial agreement to determine what the underlying rules were intended.
Observation documents safe driving, demeanor towards children, and whether children are left in the care of others during the visitation. Are there any unsafe conditions at the locations the child is being kept? The investigation pursues the background of the parents associates. Do any roommates have criminal backgrounds? Is the questionable parent involved with any relationship, business, or friendship with subjects of a dubious nature.
- Aggressive attitude towards child
- Insulting or berating child
- Corporal punishment
- Taking child to inappropriate locations
- Exposing child to danger or excessive risk
- Allowing involvement with bad influences, friends
- Improper care of child’s needs
- Insufficient supervision of child
- Breaking requirements of custodial agreement
- Documenting whereabouts during visitation
- Identifying activities of questionable parent during non-custodial time
- Verifying income and business activities
- Investigating criminal records of associates, and even the subject
- Testing for the presence of narcotics
- Incorrect medication of the child
In some cases where visitation has gone awry, the non-custodial parent has taken the child and not returned. Careful case management is crucial in these scenarios. Immediate locating of the subject is urgent, but without making the person aware they have been found. Identifying the current location and daily habits of the subject provides intelligence to be used in creating a plan to recover the child. If the plan requires the involvement of law enforcement the timing must be precise. In many jurisdictions it is difficult to obtain police assistance unless a specific time and place can be provided. If the subject is a no-show the police may not be able to remain on-scene, and future requests might not be taken as serious. Central management of intel when a child is parental abducted or missing is critical to locating and recovering the child safely.
Good documentation of activities and treatment of the child is also valuable for court actions. Judges are hesitant to make significant changes to visitation or custody agreements without verifiable and serious evidence that the well being of a child is in jeopardy. For good or bad, the courts are skeptical of claims made by a parent that the other one is doing bad things. Presenting clear and irrefutable documentation makes it easier for a judge to see the harm being done to a child by the other parent.
The harm to a child need not come in the form of serious physical injury. Of course, prevention of these risks is important. However, exposure to toxic psychological environments or non-supportive households can have just as much negative influence on a child’s life.
Documenting custodial issues should be taken seriously. Although it sounds self serving for an investigator to say so, it is clearly better for a parent not to try and do this on their own. Following and observing a subject can turn into a criminal stalking charge if not handled correctly. Also, evidence obtained may not be as usable in a court setting (if at all) if it is created by the opposing parent. In most states, activities involving determining the habits, movements, whereabouts, or activities of any other person are referred to as “licensed activities.” This means that anyone performing these, or determining the character and reputation of another requires a professional license for investigations. Doing this without a license can subject the person to prosecution at worst, or discrediting the results at best. Following another person or doing surveillance can also place an untrained individual at risk due to being distracted while driving, or being in a dangerous environment.
A professional investigator experienced in domestic and family cases understands the unique nature of protecting the best interests of a child, and works with the parent to provide high standards of results to support their needs.
Government records are now a vulnerability for consumers personal data. State records are under seige from hackers. Budget constraints have led to more outsourcing to cloud providers or other service providers of the state agency’s email, data storage, and disaster recovery services, for instance. But CISOs are lukewarm about their trust in the third-party provider’s security: Only 4 percent are very confident, with 74 percent “somewhat confident” and 18 percent “not very confident.” A recent data breach in South Carolina exposed over 3 million social security numbers to hackers. Anyone who has ever filed a South Carolina tax return since 1998 may be affected.
Once a breach of identity or personal information occurs, it is important to take action quickly. Upon notifying banks of possible account vulnerability, and credit card issuers of fraud, the next step is to discover the source of the release. In the event of bank account fraud, we are more frequently discovering that regular payees of checks are using account and routing numbers from received checks to create dummy checks or to initiate wire transfers. If a fraud occurs an investigation and forensics can determine which payee pilfered the information and stole the funds. These frauds can be partially prevented by setting up ACH block on accounts, or using a zero balance transfer account as a firewall.
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REPORTING AND PRODUCTION METHODS
• Records Intake & Review
• Data Research
• Extraction Algorithm
• Financial Records
• Witness Interviews
• Subject Observation
• Activity Monitoring
• Message Forensics
• Data Mining Program
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• ESI Processing
• Electronic Preservation
• Structured Data Breakdown
• Voice and Image Files
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• Family and Associates
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