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How Data is Searched to Find What You Own

by rjmintz on March 13, 2013

Before the Internet, separate bits and pieces of information about your life were scattered in dusty file drawers and county records around the country. Your birth certificate, driving records, insurance file, marriage licenses, and loan applications were maintained or stored in written files, record books, or sometimes the computer at the office where the records were kept. Information could not be accessed from outside the office where the records were stored. 

An investigator attempting to assemble information about your life had to travel from one county courthouse to another, stand in line, search through library archives and public records, and hope to come up with some useful information. The process of gathering personal information was a laborious and expensive job.

But all of that has changed. An investigator can now sit in the comfort of his or her office with a computer, a wifi connection, and a cup of coffee in one hand, and in minutes, access everything he or she wants to know about you.

Anyone wishing to put together a complete picture of your assets will first locate and value any property that you own. Until recently, a comprehensive and accurate search such as this was difficult or impossible. Now, almost every county has computerized its records, and the information has been linked to a national database. Instead of visiting every county recorder or trying to guess where property is located, with a single query, a computer search retrieves all of the real estate records in your name—compiled from every state and county in the country. The report identifies the cost of the property, the loan balance, and the type of property. There are at least hundreds of Web sites offering these search services. The information is produced in minutes, and the cost is nominal.

The number of companies specializing in providing this information has proliferated as Internet technology makes these searches faster and more efficient. For less than $1,000, a fairly complete search will be performed—including real estate holdings, bank and brokerage accounts, and safe deposit boxes. A number of the firms advertising on the Web declare, “No find. No fee.” If they fail to locate accounts in the search, for whatever reason, they do not charge for the service. At these prices it is also clear that there is not a significant amount of time or labor involved in developing the reports. It is not necessary to bribe bank officials or employees or to send operatives on covert missions to steal protected bank files. An experienced investigator can gather the requested information with a computer and a telephone within a few minutes or hours.

A wealthy client, Allen, invested $10,000 in a software development business owned by a college acquaintance, Mark. Allen received 2 percent of the stock in the company, put away the certificates, and didn’t think about it again for several years until one day he was served with a lawsuit. The suit alleged that the company had breached a contract to develop a particular program for a customer. The failure to deliver the program on time had cost the customer millions of dollars; it was now suing for $25 million. Allen was named as a defendant, together with the company which was primarily a service business with no substantial assets. It was clear that the real target in the case was Allen and not the company. Allen had $3 million in stocks and bonds in several brokerage accounts, and this was the prize the plaintiff was after.

The case was disturbing. From a legal standpoint, Allen, as a minority shareholder—not even an officer or director—had no liability for any obligations of the company. Even if the damages were caused as alleged, Allen had no input or responsibility for the operations of the business.

The case had been filed solely because the other side had run an asset search on all of the shareholders—looking for a “shakedown” target—and they hit the jackpot when they found Allen’s accounts. The attorney for the other side later admitted to us that if they hadn’t found Allen’s money, they wouldn’t have filed the case. They had nobody else to go after. But now they had a perfect setup. Although Allen had no real liability, what happens in court is often different than what we think should happen.

Excerpted from the book “Asset Protection for Physicians and High-Risk Business Owners

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