Asset and Encumbrance

InvestigationsBy

Jim Cronin, MPA, CFE Seattle Insurance and Legal Investigations

Presented to:Whatcom County Bar Association

CLE

November 17, 2016

My Background• 20 Years USAF Police 1969-1990• Masters Degree – Public Administration• Certified Fraud Examiner since 1992• Insurance Fraud Investigator (SIU) 11 years• Licensed as an PI Since 2000• Completed 3100 (Non-Military) Investigative

Assignments • 210 Asset & Encumbrance Investigations• Licensed as an armed investigator -2016

Why Is Experience Important? • Steep Learning Curve• No school teaches how to do Asset & Encumbrance

Investigations• I’m not just:

• Providing Service• Selling Information• BUYING LIABILITY!

Questions To Ask Your Investigator• Get a copy of their C.V.• Get a copy of their Professional Liability Insurance

Certificate• How many Asset/Encumbrance Investigations have

you done?• Do you have a sample report I can see?

Go to my website!

Tons of Freebies!

Freebies • Sample Asset/Encumbrance Report• Worksheets/Forms• Flow Chart • Article “How Much Is An Asset

Investigation?”• Call Me! Consultations are always free.

Objective• Help you better represent your clients’

interests.• Help you avoid common mistakes.• I want you to walk out of this room saying

to your self that “I learned something that I can actually use to do a better job.”

• I also want to learn from YOU! • Feedback is important!

Attendee Assessment• What do YOU want to get out of this presentation?

• Do you use VENDORS or do yours IN-HOUSE?

• What PROBLEMS have you encountered?

TerminologyCommon Term:• “Asset Check”

Correct Term:• “Asset and Encumbrance Investigation”

Timing• When should you conduct an Asset Investigation?

Timing - Continued

Make Determination Of Feasibility Of Recovery

• Conditions can and will change…• For the BETTER or • For the WORSE!

How This Presentation is Arranged

•Broad Overview of Steps•Closer View of Steps•Detailed View of Steps

Broad Overview of Steps

• Determine the PURPOSE of your investigation.• Determine the SCOPE of your investigation.• IDENTIFY the DEBTOR(S)• ADDRESS HISTORY of DEBTOR(S)• Find the ASSETS• REALITY CHECK TIME• Find the ENCUMBRANCES• Make a DETERMINATION

Logic Path

Determine The Scope & PurposeOf Your Investigation

Logic Path• What do I know about this matter?• What do I suspect?• What issues am I trying to resolve?• What information would help me resolve those issues?

• Where can I get that information?

Closer View of Steps •Identify the Debtor

–Individual?–Current Identity?–Previous Names–Nicknames–Trade Names

Identify the DebtorCont’d

• Aliases• Compound Names –

• Hispanics Do Not Hyphenate Their Names!

• Hyphenated Names • “Name Salad”

Search Tips:• Syntax varies widely!• Search until you get a result!• Use Truncation • “No record found” is a result• If you see it, print it!• Keep track of search terms used

•Matrix

Search Matrix Example

Identify the Debtor Continued

•Marital Community?–Joint and Several Liability? –This doubles the scope!

•Sole Proprietorship?•Corporation(s)

–Subsidiary Corporations?

What kind of Debtor are youdealing with?

OR

Types of Debtors

Develop an Address History• Importance of Addresses:

•Records are filed by counties!•Some cities are in multiple counties!•You need to know where to look!

Search For Assets• Definition of an Asset:

•Something of value that a debtor owns that could be attached/seized to satisfy a debt.

Examples of Assets• Employment• Real Property• Bank Accounts• Businesses

• Business Personal Property

• Accounts Receivable• Vehicles/Vessels• Pending civil suit

settlements

• Insurance/Bonding• Aircraft• Inheritances• Intellectual Property• Personal Property

• Jewelry• Guns• Various Collectibles

• UCC – Secured Party

Bank Searches• Beware! Pretexting is a Felony!• Get Copy of their Professional Liability Insurance Certificate!

• Only do business with firms you trust.

Reality Check Time• If there are no assets, encumbrances are a moot point.

Search For Encumbrances• Definition of Encumbrance:

•Impediment on property that lowers its value or makes it more difficult to gain title to.

Examples of Encumbrances• Deeds of Trust

(Mortgages)• Bankruptcies

• Double-edged sword• Child Support

Obligations

• Tax Liens•Federal•State/County

• Judgments• Unpaid Court

Fines

Determine the Net Attachable Equity

• This is the most commonly overlooked issue!

• Current Market Value • MINUS Value of Superior Encumbrances

• = Net Attachable Equity

Make Determination of Feasibility of Recovery

• Likelihood that Debtor will attempt to Abscond/Conceal/Transfer/Destroy Assets

• Cost of pursuit of assets versus value available

• Number of other entities with Superior Claims also seeking to recover from Debtor

• Timing of recovery efforts•Late to the Party??

• Homestead Exemption - $125,000

RCW 6.13.030 Homestead exemption limited

• A homestead may consist of lands, as described in RCW 6.13.010, regardless of area, but the homestead exemption amount shall not exceed the lesser of (1) the total net value of the lands, manufactured homes, mobile home, improvements, and other personal property, as described in RCW 6.13.010, or (2) the sum of one hundred twenty-five thousand dollars in the case of lands, manufactured homes, mobile home, and improvements, or the sum of fifteen thousand dollars in the case of other personal property described in RCW 6.13.010, except where the homestead is subject to execution, attachment, or seizure by or under any legal process whatever to satisfy a judgment in favor of any state for failure to pay that state's income tax on benefits received while a resident of the state of Washington from a pension or other retirement plan, in which event there shall be no dollar limit on the value of the exemption.

Detailed Steps in Searching For Assets

• Fully Identify the Debtor• Start with Source Documents

– Police Report etc• Use Subject ID Form• JIS

– Full Legal Name– Date of Birth– Physical Description– Address on file with Courts

Detailed Steps in Searching for Assets

Fully Identify the Debtor (Continued)TLO, IRB, Tracers etc:

Premier investigative databases.

Surnameof record

First Name of record

Middle Name/Initial

Suffix Social SecurityNumber Associated

with this Name

Date of Birth/Age

Notes

Detailed Steps in Searching For Assets

Address City, State, Zip Code

County Dates Reported

Notes

• Develop an Address History•TLO + Accurint•+ Other Sources

Where to Search by Asset Type

• REAL PROPERTY:•TLO/IRB/Accurint•Recorder’s Offices•Assessor’s Offices•Washington State Digital Archives

Vehicles & VesselsIVIPS

• IVIPS Will Shut Down on December 9, 2016• DOL is modernizing our outdated vehicle and vessels computer systems, including

IVIPS. The IVIPS system will no longer be available as of December 9, 2016 at 5 p.m. The IVIPS system will change to E-Services Contracted Plate Search (CPS), and registered users can access the new system on December 12, 2016.

• In anticipation of this change, we strongly encourage you to create a new business License eXpress account. You may register for a new account as early as November 7, 2016, before the system goes live on December 12, 2016.

• If you are a main account administrator, you will receive additional information through email, which contains a PIN number you’ll use to register for your new account. Once you establish your account, you will need to create new accounts for your authorized sub-account users.

• If you are currently an authorized sub-account user, the main account administrator at your organization will establish your account for you once he or she has enrolled through early registration.

• Support will be available! Contact the Drives Support Command Center after November 7, 2016: 360-664-9650 or DRIVEShelp@dol.wa.gov

IVIPS Caveat!• RCW 46.12.635• Disclosure of names and addresses of individual

vehicle owners.• (Effective January 1, 2014.)

 •  (4)(a) Whenever the disclosing entity grants a request for information under this section by an attorney or private

investigator, the disclosing entity shall provide notice to the vehicle owner, to whom the information applies, that the request has been granted. The notice must only include: (i) That the disclosing entity has disclosed the vehicle owner's name and address pursuant to a request made under this section; (ii) the date that the disclosure was made; and (iii) that the vehicle owner has five days from receipt of the notice to contact the disclosing entity to determine the occupation of the requesting party.

•      (b) Except as provided in (c) of this subsection, the only information about the requesting party that the disclosing entity may disclose in response to a request made by a vehicle owner under (a) of this subsection is whether the requesting party was an attorney or private investigator. The request by the vehicle owner must be submitted to the disclosing entity within five days of receipt of the original notice.

•      (c) In the case of a vehicle owner who submits to the disclosing entity a copy of a valid court order restricting another person from contacting the vehicle owner or his or her family or household member, the disclosing entity shall provide the vehicle owner with the name and address of the requesting party.

WA Vehicles & Vessels - IVIPS• Attention to detail is critical!• Log EVERY search. Don’t Double- Click• Check my website for Excel Spreadsheet• Accounts are Subject to Audit!• Understand Syntax: LAST,FIRST• Can search by:

• Name• Plate – no spaces!• VIN/HIN

WA Vehicles & Vessels - IVIPS•Vehicle Title Histories

• Email to vdisclose@dol.wa.gov• Include IVIPS account number• VIN of vehicle• Certified/Non Certified• Log Into Your IVIPS Log! • Results in 1 hour or less• Cost effective

Where to Search by Asset Type

• Businesses:• WA Department of Licensing• WA Department of Revenue• WA Secretary of State• TLO/IRB/Accurint Comprehensive Reports

UBI BusinessName

TradeName(s)

Bus.Type

DateOpened

(Descending)

Date Closed

GoverningPersons

Address RegisteredAgent

Notes

Where to Search by Asset Type

•Sources of Employment Info:• Accurint – People at Work• TLO – Comprehensive Report• Professional Licensing – WA Department of

Licensing• Bankruptcy Filings• News Articles – NewsLibrary• LinkedIn & Facebook• Telephone Numbers – Investigative Databases

Where to Search by Asset Type

•Pending Civil Suit Settlements•WA Administrator of Courts•SCOMIS/Odyssey•Newspapers•Internet

Where to Search by Asset Type

• Insurance/Bonding•WA Labor & Industries - Contractors•WA Department of Licensing•Washington Bar Association – Attorneys

•Collision Reports

Collision Reports• Washington collision reports are public record, and

can be ordered online! • Check JIS for citations:

• Order collision report online:

Where to Search For Encumbrances

•TLO/Accurint/IRB:•Bankruptcies•Tax Liens•Judgments•Notices of Default

Searching the Recorder and Assessor’s Offices

• Files are intertwined• Assessor:

• By address• By parcel number**• By name (at Assessor’s Office)

• Recorder:• By name• By parcel number**

Searching the Recorder’s Office

• Online•Recorder’s Site•Statewide Digital Archives

• At Recorder’s Office• King County : King County Archives

Searching the Recorder’s Office

• Limitations:• Images of all documents are not available online.

•e.g.: Deeds of Trust in King County•TLO “Locate/Asset Report” has mortgage-deed of trust info.

King County Archives1215 East Fir Street, Seattle

Searching the Recorder’s Office

•Recorded Documents:•Deeds of Trust•Tax Liens•Liens on Property•Lis Pendens

Searching the Recorder’s Office

•Tip: Be sure to search by•Party name AND•Parcel Number!

Searching the Recorder’s Office

• Some types of documents relevant to asset investigations:•Deeds of Trust•Reconveyances**

–Check for Related Documents!

Types of Documents At the Recorder’s Office

• Liens• Excise Tax Affidavits• Marriage Certificates• Lis Pendens• Warranty Deeds

Searching the Recorder’s Office

• Many types of documents are recorded!• The Recorder does not verify

documents’ authenticity!• Not everything that is recorded is real!• Pay attention to “When recorded, return

this document to _____”

Searching Federal Courts• PACER:

•Bankruptcy Filings–Hyperlinked to actual

documents/schedules–Archived within several years

–Federal Archives – Sand Point - Seattle•Federal Civil, Criminal and Appellate cases also

Searching Washington Courts• Start with AOC Site:

Searching Washington Courts (Cont’d)

• Odyssey – New Online Court System• King and Pierce County Will Not

Participate

Searching Washington Courts (Cont’d)

• Asotin• Columbia• Franklin• Garfield

• Lewis• Snohomish• Thurston• Whitman• Yakima

Counties Currently Online With Odyssey:

Searching Washington Courts• SCOMIS:

•County by County–Civil - Case Type 2–Criminal – Case Type 1–Juvenile – Case Type 8–Domestic – Case Type 3–Probate – Case Type 4

•CourtTrax, CourtLink & Others…

Searching Washington Courts• JIS

•Non-Civil Cases Statewide–Full Name, DOB, Physical Description,

Address

•Small Claims Cases

Searching Washington Courts• JIS – Continued • Non-Civil Case Types Include:

• Traffic Infractions• Misdemeanors• Gross Misdemeanors• Felonies• Anti-Harassment Orders• Domestic Abuse Cases• Dissolution of Marriage Cases

Searching Washington Courts• ACORDS – Appellate • This is a separate system, but is accessible with JIS-

Link logon credentials. •Court of Appeals•State Supreme Court

Asset & Encumbrance-RelatedWashington Court Records

• Garnishments• Judgments• Child Support Obligations• Unpaid Court Fines• Civil Cases Pending Awards• Probate

UCC Searches• A UCC-1 financing statement (an

abbreviation for Uniform Commercial Code-1) is a legal form that a creditor files to give notice that it has or may have an interest in the personal property of a debtor (a person who owes a debt to the creditor as typically specified in the agreement creating the debt).

UCC Searches

WA UCC Filings• Secured Party

• Difficult to get details by Secured Party• Debtor Party• Collateral• Effective Date• Lapse Date

https://fortress.wa.gov/dol/ucc/

Other Searches• News:

• NewsLibrary.com– Nationwide– Full Text– Boolean Operators/ Advanced Search Options– National/Regional/Local News– 5000+ sources

• Social Media• Google Searches

Asset Defense Strategies• Real property owned in name of trusts• Bleeding off equity (second mortgages)• Fake bankruptcies• Real property/vehicles leased versus owned• Real property listed in wife’s maiden name • Real property listed in other relative’s name

Asset & Encumbrance Investigation

Process Flow Chart

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Questions??