Just “a little off” Can Mean Fraud
Lots of the work in divorce asset detection involves looking at the names of companies a subject has, and then trying to figure out the names of new companies concealed from our client (the spouse).
Sometimes, a tiny change is all it takes to divert money successfully. Looking at every last detail behind a company — including name variations — is critical.
I was reminded of this recently talking to a smart transportation lawyer who explained how entire containers of luxury cars get stolen and sent overseas. Someone hacks into a vehicle brokerage site, shows up to pick up the cars and presents paperwork in which the container number for the cars is just one digit off the number that was supposed to show up.
A careless attendant at the loading dock may not notice or figure that the right company just sent the wrong container. He releases the shipment, and voila: Instead of going to Beverly Hills, a load of $200,000 Mercedes cars is on its way to Turkey.
In investigations involving divorce or ordinary commercial theft and fraud, people will choose a company name that is nearly the same as the one we know about. Delta Holdings II instead of Delta Holdings, or Alpha Ops LLC instead of Alpha Ops Inc. Oxford Inns LLC instead of Oxford Inn LLC. Sometimes the company name will be the same, but in another state. New York doesn’t care if there is a similarly named company in Texas, as long as it hasn’t been taken in New York.
How do we find all these companies?
- Have fun with public filings. Many of the company registries in the U.S. are free, and those that are not free are cheap. It’s easy to take a prefix such as Delta and see what other names come up aside from Delta Holdings. If you search too narrowly, you will find what you already know about. So always, to the extent possible, search as widely as you can.
Wide searching is a good rule for other searches too, by the way. Searching John Smith or Juan Gomez will be cumbersome, but if you have an unusual or unique name to search, don’t limit it with other terms first. If you have an unusual name who turns out to have the same name as a Nebraska college student who is a star athlete (and you’re not interested in that athlete), you can always restrict you search to eliminate the word “Nebraska” or perhaps the sport that person plays.
- Search based on addresses. Whenever I get of list of known business and personal addresses for a person, I like to see who owns each property. Oxford Inns may be owned by OI Properties, and what do you know? OI Properties has the same registered address and agent as Oxford Inns. That doesn’t prove common ownership, but it’s a lead you have to chase down.
- Search securities filings. We once worked on a divorce and our subject made most of his money sitting on boards of private companies that then went public. He liked getting paid a little bit personally, but preferred taking his board fees and IPO payouts in the name of different companies he controlled. Some of those his wife knew about, and some she didn’t.
One of these new husband-controlled companies our client didn’t know about turned out to own property she didn’t know about either. Marital property, it turned out. That was a happy client.
