September 06, 2017

Five Questions Litigators Should Ask Before Hiring an Investigator (and Five Tips to Investigate It Yourself)

Philip Segal

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The world is full of private investigators, from the highest-priced white-collar firms staffed by former Central Intelligence Agency officers to boutique outfits run by retired local police.

Still, many lawyers have no idea where to turn if they need fact-finding help. Some have never met an investigator and don’t know where to find one they can trust. Others have used investigators but may have been burned when their fact finders failed to follow instructions.

As in any other profession, there are good investigators and bad, but quality does not always depend on the amount of information an investigator is able to retrieve. Sometimes too much information can come at the expense of ignoring the law and the attorney’s rules of professional ethics. Too little information can also be a problem, leading some investigators to overpromise, while others fail to grasp what kind of information would be most helpful for a complex matter.

The following are five questions to ask any prospective investigator before making a hiring decision.

1. Can you get bank account information?
The answer you should hear is, “Not without a court order.”

One exception could be if the account statements are abandoned on public property and you decide to go through someone’s garbage, but the most common way many investigators get into bank accounts is to pretend to be the account holder. This is illegal under the federal Gramm-Leach-Bliley Act (15 U.S.C. § 6801).

I am sad to report that many lawyers have called our office over the years asking us to get bank account information. While many were genuinely ignorant of the illegality of the action they were requesting, some seemed disappointed and even said that “another investigator” had recently been able to procure this kind of information.

The other investigator may well have come up with some account number. Just remember that a nod and a wink to an investigator who intends to get such information will not insulate the hiring attorney if the illegality is discovered. A lawyer who hires an investigator has an ethical duty to supervise that investigator (see ABA Model Rule 5.3(c)(1)). A mere instruction to follow the rules isn’t enough.

This is not a theoretical discussion: Failure to supervise an investigator who breaks the law or the rules of professional responsibility can result in the exclusion of the evidence gathered (see the recent case involving Uber in the Southern District of New York, which involved an investigator lying about the purpose of his phone calls). Dismissal of the entire action because of an investigator’s misconduct is rare, but it has happened. Sanctions against the attorney are a real risk too.

What you should want to hear from an investigator is that while bank account transactional details and balances are off-limits, we can often guess the banks at which people do business. That doesn’t get you bank balance information, but if you get a court order, at least you know where to serve a subpoena.

2. With Google and all your databases, you can do this all from your office, right?
There are more than 3,000 counties in the United States, and many have put exactly zero records online. How is an investigation in one of those counties supposed to work if you won’t leave the office? How can you expect to read litigation or review deeds and mortgages that reside in a government building hundreds of miles away if you won’t go on site?

The truthful and thorough investigator should probably say, “Most of it will be done with computers and phones, but we will need to send people into the courthouses to pull records.” Even jurisdictions that let you view dockets online will often make you come to the courthouse to view the records. For federal records, PACER has an increasing number online, but anything archived will have to be physically tracked down and copied.

A word about Google: Some of our clients over the years have come to us and said something like, “We did a thorough Google search and found nothing, so you probably won’t see much.” When I talk about Google, I like to ask people to Google themselves and see how much of their own lives pop up. Usually, it’s about 1 percent of what we know about ourselves. Google misses most of the jobs we’ve had, most of the people we know, most of the court cases we’ve been involved in. “If Google knows so little about you,” I ask, “why should it know a lot about this person you’re investigating?”

Remember, Google is there to make money. “Good” search results for Google are often commercially advantageous to Google. If you are looking for witnesses from among the former employees of a small construction company in Indiana, that kind of search won’t light any fires at Google, if such information is on the Internet at all.

Google is indispensable in any investigation. It is just way short of sufficient for any thorough inquiry.

3. What phone calls do you think you would make first?
This is something of a trick question because, in most circumstances, it is better for your investigator to do research before picking up a phone.

You may wish to send an immediate signal to the other side that you are actively investigating them, but otherwise secrecy is often best. Without a subpoena, your investigator may get only one chance to talk to people before the other side finds out and warns them off cooperating. With one shot at an interview, make it count with the best questions you can ask.

For example, assume you are calling your opponent’s embittered former business partner or ex-wife. You may wish to ask that person about your opponent’s newly discovered side business three states away. But unless you have done your research, you won’t know to ask about that business at all.

When we begin an investigation, we like to gather every piece of available information on the public record that relates to the person we are investigating. This includes property records to establish jurisdiction and track assets, litigation, professional licenses, securities records, social media footprints, and, of course, a thorough media search in English and other relevant languages.

Only then can you be fairly certain that you will be asking the most informed questions you can to the best subjects you can find.

The order of the phone calls to interview subjects is worth discussing with your investigator as well. Sometimes when you are willing to run the risk that the investigation will go public, you still want to minimize that risk. So you would start with the phone calls least likely to make their way back to the person being investigated.

Be aware that as with every aspect of any investigation, a too-rigid game plan is deadly. If you make one phone call and get information that greatly changes what you know about Mr. X (such as that he omitted from his résumé work done for a large multinational company just last year), you may need to research more of the public record and develop a new set of people to call.

4. Do you know what the no-contact rule is and how to make sure you don’t violate it?
Plenty of investigators are concerned with getting results at all costs. But if you end up contacting the agent of an opposing party or someone represented by counsel, the evidence may not be usable. Then “results” are just a bunch of useless knowledge for which you’ve paid good money.

We always recommend using an interview template approved by our clients, which asks anyone being interviewed whether they are represented. If they are represented, we terminate the call. We also make sure to inform anyone we interview that we are not looking to get privileged or confidential information. If they then hand such information over, we and our clients can at least argue that we took the proper precautions and avoid sanctions or dismissal.

Make sure to ask your potential investigator what happens under the following fact pattern: At the beginning of a phone interview, a person said he was not represented, but during the course of the conversation, he remembers that he did in fact talk to a lawyer but can’t remember what they talked about. He also remembers that he signed something before he left the company under discussion, but he can’t remember what that document was. He thinks it was a confidentiality agreement. What would the investigator do then?

If the investigator says, “He said at first they didn’t have a lawyer or a confidentiality agreement, so it’s all fair game,” get another investigator.

The investigator you want would tell the interview subject that the investigator needs to stop the interview and talk to his client. The investigator should also say, “Could you find out what you signed and who hired this lawyer? I may be back to you.”

5. When you interview someone, how will you introduce yourself?
It is vitally important that your investigator not lie about who he is or why he is calling (see again the Uber case referred to above).

Many investigators think nothing of pretending to be journalists or government employees. The risk of saying that you are an investigator (and perhaps that you are working for a client who does not wish to be identified) is that fewer people will want to be interviewed than if you lie. No problem. Avoiding sanctions or criminal penalties is worth it every time.

You should ask the investigator what his answer will be if the person he contacts to interview says, “Who are you working for?” The investigator’s only proper response to you should be, “Am I allowed to identify my client or not?”

Some litigators are keen to stay out of the picture before discovery and will want an investigator to say something like, “I can’t tell you who my client is.” Believe it or not, many people will nonetheless begin dishing dirt on former colleagues even with no knowledge of where the information will be headed.

In other cases, the idea that an investigator is nosing around is just the message a lawyer may want to send to induce a quick trip to the bargaining table. Whenever we discuss doing interviews, we always tell our clients to assume that our efforts will get back to the person being discussed. Even interviewing a person’s mortal enemy carries the risk that the investigation will become public. The enemy may not call his hated former partner, but he may mention the investigation to a mutual friend or to someone else who then passes it on.

Any investigator who says he can do interviews without a major risk of the investigation going public should be rejected right away.

Doing It Yourself

Now suppose your client decides that however nice it would be to have an investigator helping out, he just doesn’t have the budget for it. You are now left with millions of Google pages, 3,000 U.S. counties you could check, and the world’s newspapers in archive. You have social media to look over and maybe people to find and interview.

Where in the world do you begin in a search for assets or for a person’s real story complete with former employers and perhaps old associates who would make good witnesses?

1. Confirmation bias is your worst enemy.
You should begin by looking at the public record (point 3 above), but where? It is human nature in facing a large task to try to eliminate some of the many possibilities to simplify things. First-time investigators assume too much too early on.

If your client thinks that Mr. X has never lived or worked outside of California, your client may be wrong. You have a duty to investigate your client’s assumptions. Of course, looking everywhere is not reasonable, but once you are using databases, you should always look beyond the narrow jurisdiction your client gave you.

The more uncommon your subject’s name, the easier it is to expand the geographic scope of the inquiry. Middle initials are crucial. There are just too many John Martins in Los Angeles to make sense of. John C. Martin who lives in Pasadena will make things go a lot faster from the beginning. Even a John C. Martin in Los Angeles is easier if you can narrow down his age range.

The flip side of confirmation bias is the Semmelweis reflex, which is to reject evidence that conflicts with a preconceived notion. If a person who appears to be the California Mr. X turns out to have a home in Florida that your client didn’t know about, it is your job to investigate and to prove that the Florida Mr. X is not the same person as the California Mr. X. It’s surprising how many people don’t want to bother. Sometimes a signature on a deed or mortgage is all you need to rule out a surprising finding (or to confirm that your investigation just took an unexpected turn).

2. Use timelines to tell the story and to keep the story straight yourself.
A lot of investigators like to prepare separate reports that list all property owned, then all litigation discovered, then all media reports. Each of these is in a separate section, and then it’s up to you, when reading these reports, to look back and forth to interlink the information in the different sections. This is unsatisfactory and inefficient for both the investigator and the client.

We live our lives chronologically, and we understand reports about people that are presented the same way. When you are gathering facts about a person, the findings will not arrive in the order in which you should present them. Keep your information in chronological order as it comes in, instead of lumping everything together in categories.

For instance, you find that X bought a house in 1999, sold it in 2004, bought another one in 2005, and then sucked a bunch of equity out of it in 2014. Then later you find out that X left a job off his résumé that took up 2013 and some of 2014. Could the abrupt departure from the job in 2014 have necessitated the refinancing? Each person’s life is a story, and we need to arrange life events into something that will make chronological sense. There will be many gaps in the story, but arranging a person’s life chronologically exposes those gaps and enables us to dig into those gaps or to note that we have a less-than-full sense of a person.

3. Don’t put too much faith in databases.
Get public record backup on anything you report. Expensive commercial databases famously conflate the records of two or three people with the same name. They report that someone owns a house that in reality she sold five years earlier.

On the most basic level, databases don’t cover everything we want. The next time you are searching in a paid database, you may notice a little question mark somewhere around the box where you enter your search terms. Click on that and prepare to be shocked. You will find that “nationwide” searches of marriage licenses may cover only seven states. Some states don’t make such licenses public. In other cases, the information is public but the database doesn’t include it because it’s too expensive to gather data that have not been scanned and stored electronically. In such cases, you need to send someone to the courthouse or the tax assessor’s office.

I was approached late last year by a new database service that claimed to be better than the competition. As in Googling yourself in the example above, I put my own Social Security number into the database only to learn that the home I bought seven years ago supposedly belonged to someone else. I still lived at my former home, according to this database. Would I then trust this new database to look at someone else? Maybe, but I would certainly want to confirm anything I found with the public record.

Two newspaper databases may not index the same papers. If you are looking for information on a Korean American around New York City, chances are none of the big commercial databases will index the Korean papers in New York or New Jersey. Clicking on the definition of an “all languages” search reveals, on one database, that “all” really means “16” and that Korean is not among them. In such a case, you would need to find a Korean speaker to look over the local Korean language press—online or on paper.

4. Avoid conducting a “paint by numbers” investigation.
Part of any investigation is doing a thorough media and Internet search, but unverified acceptance of what you read in the papers or on websites turns into what I call a “paint by numbers” investigation: The basic architecture of a life is formed by the person you are investigating. That person wants you to view his or her life in a particular way.

Leaving out embarrassing details or inventing complimentary ones changes the landscape of a person’s life, and no investigator should cede that kind of power to the subject being investigated.

Check all résumé information on your subject, and do not assume the reporter of a news article on your subject did this legwork for you. Remain especially alert for altered dates between a résumé and reality, as well as entire jobs omitted from an official bio. Omission may be an “accident,” but it is more often a big red flag that there is something negative being concealed.

I used to tell my law school students that, rather than relying on what the New York Times wrote about a subject, after 12 weeks of relentless investigation they would know far more about their subject than the New York Times. After all, reporters are busy and may spend only a day or two studying a subject.

So, if you come across good evidence that your subject omitted a major portion of what should have been on his résumé, follow it up.

5. Look for assets, not just cash.
For asset searches, we don’t care what a person is like, and we don’t care much that she bought a house in 1999 and sold it for a 10 percent gain in 2002. What we usually care about is what she has today. That will determine whether she is worth suing or what we can get with our hard-won judgment.

Still, with an asset search, we care about doing the same kinds of searches as we do when looking into character. Just as the companies a person owns lead us to litigation that tells us about character, those companies also lead us to assets.

When people talk about asset searches, they think first about the first asset on the balance sheet—cash. We usually spend little time looking for cash for the simple reason that cash sitting in a bank account is extremely difficult to detect without a court order (see the question about bank accounts, above). Instead, it is better to start with things that you can get with cash, such as companies or real estate. Sometimes that helps us trace back to the source of the cash that bought those things, and we find even more cash.

As mentioned before, databases miss a lot, never more than when you want to find the companies through which someone may hold assets. Why can’t we rely on databases for this information? For the simple reason that in most states (and in many tax havens the world over), a person’s name does not have to be linked to the name of his or her company. Once that link is broken, many databases are stumped. Still, it doesn’t take long to connect the company to the person if the reason the company was set up was not for secrecy as much as to limit liability.

Start with the cities in which your subject lives and works. Lots of times his companies are domiciled in those locations. Sometimes a person who “owns his own house” really lives in a house owned by a company beneficially owned by him. Once you identify one of his company names, keep pulling on that string and others may follow. If someone names a company Pericles Properties, don’t be surprised to find Pericles Properties II or perhaps a company named after another famous Athenian.

Whether you hire an investigator or do it yourself, remember that fact investigation demands the same attention to detail and concentration as any lawyer would devote to preparing for a settlement conference, a deposition, or a closing argument. A few minutes here and there won’t cut it, and neither will leaving it to machines to do all the work.

Not all cases will make it to a jury, but they will all turn on facts. The more you know, the greater your chances of doing best by your client.

Philip Segal

The author is an attorney and managing member of Charles Griffin Intelligence, New York City, and the author of The Art of Fact Investigation: Creative Thinking in the Age of Information Overload (Ignaz Press 2016).