If you’re a private investigator or someone who would hire a private investigator, whether as an individual or an attorney, you need to know about this story.
In this article, we’ll discuss three examples of where engagement with an unethical private investigator can cause huge liabilities and can even lead to criminal charges if not done carefully.
Example #1
The first lawsuit was about a personal injury case where a person was injured in a car accident and this injured person was suing for compensation. Well, the defendant (the person being sued), hired a private investigator to perform surveillance on the injured person to make sure they were really injured.
Although it’s not necessary in every case, surveillance is a common activity performed by private investigators, so that’s not the problem. Here’s the problem: While surveilling the subject, the investigator parked on a dirt road a ways away from what they thought was the entire property. Turns out, that dirt road went directly through the subject’s property. And not only was it part of the subject’s property but there was an easement for neighbors to use the property as well to access their properties. So unbeknownst to the investigator since they failed to conduct a title search, they were performing surveillance while on the subject’s private property.
In addition to surveilling the private property of the subject, this investigator used magnification on their camera to zoom in on the property. Turns out, if you’re a private investigator and know the laws, that’s very illegal. It’s improper to trespass first of all, but also to magnify the results.
So, what happened? The defendant in the case found out that the investigator was trespassing so they sued because they said they were severely harmed by these actions. They sued not only the private investigative firm but also the lawyers and five investigators individually. They’re suing for $13 billion due to trespassing and invasion of privacy claims. Will they win $13 billion? Who knows, that’s a lot of money. Either way, it’s very clear-cut that they did something that was improper.
What’s the takeaway from this? If you’re hiring a private investigator, you need to make sure that the actions they’re taking are legal. For example, if you’re pulling records on an individual, it has to be done legally. There’s a federal law called the Gramm-Leach-Bliley Act that prohibits pre-texting. Pre-texting is a misrepresentation to obtain private information. If you’re looking for bank records for Joe Schmoe, you can’t call up the bank pretending to be Joe Schmoe if you’re not this person. You can’t falsify records to get cell phone information or send fake checks to get bank account numbers. Essentially, you have to accurately and transparently represent your intentions to obtain private information.
Make sure that any investigative form that you work with has the experience and knowledge in the area you’re hiring them for. At our firm, we don’t do surveillance, we only do asset searches and fraud investigations, things that are in our practice area. Part of the reason we don’t do surveillance is exactly that, it’s not our expertise. Surveillance requires a certain amount of working knowledge of state and federal privacy laws. In some states, you can use devices that enhance video and audio. You can zoom in as much as you want or use parabolic microphones to hear better. In other states, there are rules about curtilage, sometimes you can pull trash from outside as long as it’s in a bin. Knowing these laws is crucial because everyone involved in the investigation is at risk.
As investigators, we get asked frequently by clients if we can find information in a certain way but what they’re asking is actually illegal. They might not know it’s illegal and they’re not trying to break the law in most cases, but what they’re asking for is illegal and we do not partake in illegal requests.
Example #2
Back in the early 2000s, we had a case where a client was involved in a lawsuit and a countersuit, meaning both parties were suing each other. As part of our investigation services, we always do counterintelligence for our clients. We tell them that it’s likely the other party is doing exactly what you’re doing and to be aware of anything suspicious in the coming timeline. In more than half of cases, the private investigator is going to do something wrong. Many private investigators don’t have the resources of a larger enterprise and may not be as sophisticated or have as much experience.
So what did the investigator do? This investigator wanted to find out how much money our client had in the bank. How did they do it? They did not go through the right channels for a GLB-compliant bank account search. They created a fake company, wrote a fake check, and put a few hundred dollars into a bank account; they sent that fake check to our client with the fake name USA Rebate Company with a letter saying, “Congratulations! Thanks for buying your products through USA Manufacturing Services, here’s your rebate check”, and the check was only $15-$20. The investigator was hoping that our client would sign the check and deposit it into their account so they could see the back of the check, get the account numbers, and find the bank account balance.
This is illegal and is another form of pretexing. So our client receives this in the mail and it raises a red flag and they reach out to us. We asked them to bring in the check and did some research on it, only to find that it connects to a PO box that was traced back to a private investigative agency. We did some research on the private investigator and found that they had done work for the counterparty’s law firm. So we put two and two together and because of this, our client brought this information to their attorney who was able to get the proper subpoenas and depositions to prove that this was in fact a fake check and illegal pretexting.
Example #3
In the late 90s, there was a major tech company that realized someone on their board of directors was revealing information to the media from the boardroom. They knew that the only way this information could get out is if it were from someone on the inside.
The executives at this company hired a private investigator to get phone records from all of their board members so they can scroll through to see who is calling the media. And they did exactly that, illegally of course. Sure enough, they found that one of the board members was calling up reports. So they approached the board member about it, but the company didn’t know that what they were doing was illegal. Unfortunately for this company, the board member knew it was. The board member filed a complaint and resulted in millions of dollars in fines and criminal consequences for some of the executives involved as well as the investigator.
So if you’re hiring a private investigator, make sure that they’re familiar with your type of case and that you’re vetting them properly. Just because you have an investigator do something for you, doesn’t mean you’re off the hook from liability if it’s done improperly.
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