Asset searches can be an extremely valuable tool for attorneys, investors, executives and individual litigants, if conducted by an experienced private investigator with the proper skills and resources.  In addition to tangible assets, financial accounts and revenue/income sources, a comprehensive search should also reveal liabilities, bankruptcies, liens and lawsuits, resulting in a complete financial profile that is both accurate and actionable.

Below are 10 top reasons to consider conducting an asset search:

1. Uncovering Embezzlement and Employee Fraud: Did your junior bookkeeper just buy a yacht? Did your purchasing agent pay off a 30-year mortgage in 30 days?  If so, the company books may have been cooked. The perpetrators of embezzlement, corporate theft, and kickback schemes are often employees who have been living lavishly beyond their salary.  On the flip side of that same coin, however, employees who have been experiencing severe financial difficulties may also be more likely to commit fraud, according to findings from the Association of Certified Fraud Examiners.

2. Investor Due Diligence: Multi-million-dollar investment frauds and Ponzi schemes have infamously masqueraded as private equity firms and hedge funds. Pump-and-dump schemes and chop stocks litter the lightly regulated OTC exchanges.  Yet despite the clear risks, even experienced, accredited investors sometimes fail to kick the tires before investing in an unknown entity.  Due diligence on an investment firm, portfolio company, or investment manager can be critical in uncovering red flags before funding is committed, compromised and lost.

3. Mergers and Acquisitions: Much of the legwork in today’s M&A due diligence is handled by ‘clean teams’ of attorneys and accountants poring over financial records in virtual data rooms. Yet executives and advisors often have questions that cannot be fully answered by the proffered financials. An asset search by an investigative specialist can provide added insights and increased transparency for properly valuating M&A targets.

4. Before Litigation: Litigation generally involves a major commitment of time and resources. Even a successful suit that concludes with a favorable judgment offers no guarantee of getting paid.  Before filing a complaint for money damages, it is often advisable to know whether the defendant can cover the claim.

5. When Considering a Settlement: Having an accurate financial assessment of your legal adversary can be highly useful when the other side signals they are ready to settle a case.  A clear perspective on their assets will help you decide whether to continue negotiations, prepare for trial, or sign at the dotted line.

6. Divorce: Contested divorce proceedings can turn into a lengthy, bitter battle when husbands and wives are unsure of – or unable to prove – the full extent of their spouse’s finances. There is an obvious and immediate financial motivation for identifying undisclosed and hidden assets. Yet there can also be significant legal leverage – and curried favor with the judge – if it can be proven that the other side has been misrepresenting their assets or acting in bad faith.

7. Recovering a Judgment: When the losing side in a lawsuit refuses to satisfy the final judgment, successful collection efforts will ultimately depend on being able to quickly identify their assets. At the most basic level, this process involves locating and levying bank accounts, garnishing employment wages, and securing liens against real property.  Yet for more sizable judgments – and when dealing with evasive debtors who will try every trick in the book to make themselves ‘judgment proof’ – more intensive investigative avenues must be pursued, including identification of assets held in shell companies, brokerage accounts, trusts, and offshore accounts, as well as any fraudulent transfers to associates or family members.

8. Stress-Testing of Business Partners. Entering into a new partnership, joint venture, or major supplier contract can be an anxiety-producing proposition when there is insufficient knowledge about the extent of their debts and state of their financial health.  With an independent asset investigation, business owners and executives can assess whether their potential partners have the necessary resources to fulfill their current and future obligations.

9. Probate Problems. Executors of estates are frequently faced with incomplete financial records.  Nevertheless, they are typically required by the court to tally an accurate inventory of the estate’s assets.  This may seem like an impossible undertaking if the decedent was the household’s primary breadwinner and family bookkeeper – particularly if there was no financial planner, estate attorney, or accountant who kept a second set of records.  Asset searches on deceased individuals can prove more time-consuming and costly if the subject has been dead for more than a year. Yet it may be an unavoidable expense if the surviving spouse, adult children, and family advisors cannot provide the necessary answers.

10. Lending Money.  Regardless of whether a loan is being provided by a bank or a private party, the lender has a common-sense obligation to consider the financial health of the debtor prior to releasing the funds.  Long gone are the days of so-called ‘liar loans’ and ‘ninja loans’ (no income, no job, no assets) that fueled the housing-and-CDO heyday before the market crash.  Many major lenders now require an independent evaluation of assets to quantify risk of default, while confirming the status of posted collateral.

About the Author: John Powers is director of Beacon Investigative Solutions.  His articles on financial investigation and related matters have appeared in Huffington Post, AOL Money & Finance, Competitive Intelligence Magazine and The Legal Investigator. Email him at jpowers@beaconinvestigation.com or follow him on Google and at @JohnPowersPI.

About Beacon: Beacon Investigative Solutions conducts comprehensive asset discovery and financial background investigations for corporate clients, law firms, and government agencies.

Taleb’s best-selling book has taught business leaders to believe the greatest threat to their companies will be a black swan, an unpredictable extreme-impact event with the magnitude of a market crash or terrorist attack. By comparison, everyday risks seem like black flies: bothersome and persistent, but unlikely to cause calamity or collapse. However, this distinction is misguided. Though the consequences of routine risks may seem minimal – and therefore able to be ignored – their cumulative impact can be disastrous.

Risk mitigation experts, competitive intelligence professionals, and corporate investigators are often consulted after a crisis has occurred, by which time the worst damage is already done.

“In today’s global business environment, major corporations must continually recalibrate their risk assessments and innovation efforts amid the constant flux of political, economic and environmental factors,” says Beacon director John Powers. “Some events are true black swans, neither probable nor predictable. Yet in a surprising number of cases, businesses have conspicuously miscalculated and mismanaged well-known threats, or allowed seemingly minor risks to accumulate until they trigger a cascading failure.”

Distant disasters ripple through supply chains and counterparty contracts, revealing the globalized economy to be a daisy chain of interlinked vulnerabilities. Yet many executives, analysts and corporate investigators continue to perceive business risks as either random singularities or isolated irritants. Why do they search for a swan, instead of seeing the swarm?

Download a complete PDF copy of the report here.

A version of this report was published in Competitive Intelligence Magazine (January/March 2013).

About the Author: John Powers is director of Beacon Investigative Solutions and Beacon Strategic Advisors. His articles on competitive intelligence, corporate investigation and related matters have appeared in Huffington Post, AOL Money & Finance, Competitive Intelligence Magazine and The Legal Investigator. Email him at jpowers@beaconinvestigation.com or follow him on Google and at @JohnPowersPI.

About Beacon: Beacon Investigative Solutions advises business clients, law firms, and government agencies on corporate intelligence, investigations, and risk mitigation.

How Innovative Businesses Rely on GPS

For years, logistics and delivery companies have relied on GPS tracking and geospatial technology to monitor their freight containers and trucks. UPS, for example, pioneered the use of commercial GPS to improve route-mapping and other operational efficiencies across its fleet of 60,000 drivers.  “If I can just reduce one mile per driver per day, that’s more than 20 million miles a year, that’s tires that aren’t being wasted, that’s 2 million gallons of fuel, that’s 20,000 metric tons of carbon not going into the air,” UPS Director of Process Management, Jack Levis, told Penn State Public Broadcasting.

GPS tracking of company vehicles has also been used by businesses seeking to monitor their mobile sales force and field reps.  Software applications, including Salesforce.com, can also be used to compile location-aware data from the smartphones of off-site workers.  Of course, it’s not just people that need to be monitored: energy, construction and excavation firms frequently employ GPS to keep close tabs on the location of their heavy equipment.

GPS also plays an important role in corporate investigations.  A company in Ohio recently retained Beacon Investigative Solutions to track company vehicles used by employees who were suspected of orchestrating an insider theft.  With the help of GPS tracking, the perpetrators were successfully identified, and evidence against them was turned over to the police for prosecution.

The Legal ‘Grey Area’ of GPS

It has now been a year since the landmark Supreme Court decision in United States v. Jones, which ruled that warrantless GPS tracking by law enforcement is illegal.  As Justice Scalia wrote in the majority opinion of the Court:

We hold that the Government’s installation of a GPS device on a target’s vehicle, and its use of that device to monitor the vehicle’s movements, constitutes a “search.” It is important to be clear about what occurred in this case: The Government physically occupied private property for the purpose of obtaining information.

For law enforcement agencies, the ruling was very clear: warrantless GPS tracking constitutes a violation of The Fourth Amendment protection against unreasonable searches and seizures.  However, the Supreme Court did not address the use of GPS tracking by businesses or private individuals, leaving such matters up to state lawmakers and judiciaries.

Today, from state to state, there is still no consensus on the legality of GPS tracking in circumstances that do not directly involve law enforcement.

In most states, GPS tracking by licensed private investigators is considered acceptable if the company or person who requests that a tracking device be installed on a vehicle is an owner or co-owner of the vehicle. After all, if it is your property—either your personal property or your business property—you have the right to know how it’s being used, and you have a right to physically occupy your own property.

Those rights have been largely upheld amid legal challenges. For example, in 2007 a New Jersey woman hired a private investigator to follow her husband, whom she suspected of having an affair.  After the husband managed to elude the surveillance, the investigator recommended that the wife install a GPS device, which she placed in the glove compartment of their SUV.  The husband was soon discovered riding in the car with another woman.  He later sued his wife for invasion of privacy and “substantial and permanent emotional distress” and he also tried to sue the investigator.  Yet in 2011, a New Jersey appellate court ruled in favor of the woman and the investigator, concluding that the husband had no reasonable expectation of privacy because the GPS device tracked him on public streets.

Restrictive GPS Tracking Laws in Specific States

A few states have passed laws related to GPS tracking that are far more restrictive.  These state laws include the following provisions, as summarized in a 2012 presentation by Cincinnati law firm Dinsmore & Shohl LLP:

California: Forbids the use of electronic devices to determine the location of other individuals, unless done with consent or by law enforcement.

Connecticut: Employers must give written notice of electronic monitoring to employees prior to commencing the monitoring. An employer is exempt, however, if the employer believes the employee is violating the law or the legal rights of another employee, or is creating a hostile work environment; or if it is believed that monitoring may produce evidence of these actions. The use of electronic monitoring during criminal investigations is also exempt.

Delaware: Electronic tracking considered an “invasion of privacy.” The installation of an electronic tracking device on the car of another individual is forbidden unless the individual consents to being tracked. Exceptions to this law exist for law enforcement and parents.

Texas: The placement of “electronic or mechanical tracking devices” on the vehicles of others without their consent is forbidden. Exceptions are allowed for law enforcement and licensed private investigators with consent of the car owner. There is also a “Good Samaritan” exception.

Other states, including Virginia and Minnesota, have proposed or passed laws to limit mobile tracking devices. In other states, such as Colorado and Michigan, invasion of privacy and/or anti-stalking laws may apply. Knowing what state laws apply – and under what circumstances these devices can be legally employed – is critical for businesses that utilize GPS tracking technology. For national firms, with mobile employees and company-owned vehicles that routinely crisscross state lines, the challenge of keeping track of the still-emerging case law is particularly acute.  Nevertheless, GPS tracking remains an essential tool for many businesses that utilize the technology in an ethical, effective and legal manner.

About the Author: John Powers is director of Beacon Investigative Solutions. His articles on private investigation and related matters have appeared in Huffington Post, AOL Money & Finance, Private Investigator Magazine, Competitive Intelligence Magazine and The Legal Investigator. Email him at jpowers@beaconinvestigation.com or follow him on Google and at @JohnPowersPI.

About Beacon: Beacon Investigative Solutions is a national private investigation firm licensed and authorized in 45 states and Washington, D.C.

During a recent engagement to conduct competitive intelligence and due diligence for a major corporation, Beacon discovered that the target was engaged in a complex, multi-million-dollar fraud.  Beacon director John Powers details his experience coordinating with the Securities and Exchange Commission (S.E.C.) Office of the Whistleblower in a recent article in Huffington Post.

Four years after the arrest of Bernie Madoff, it’s still more difficult than you might imagine to enlist the help of federal securities regulators in exposing a large-scale investment fraud.  Though the responsibilities of the  S.E.C. have grown considerably, its enforcement budget — relative to total managed investment assets in the market — has fallen by nearly 50 percent since 2005.

Read more.

Photo Credits:

by scott*eric

Part of the difficulty comes from simply not knowing what qualities to look for when choosing a private investigator – or even where to look. In all likelihood, your colleagues and friends and family have limited experience in this area, and will be unable to offer any personal referrals or recommendations.  Moreover, the circumstances that have caused you to seek assistance from a private investigator may be urgent and stressful – such as a troubled investment or business deal, a contested divorce or custody case, or a runaway child – which makes it even more critical to be able to make the right choice as quickly as possible.

This post will address all the factors that you should consider before hiring a private investigator, which will help ensure that your choose a qualified professional who will handle your case in the correct fashion.

Are They Experienced?

To obtain the best results you will need to hire an experienced private investigator.  Ask for their professional references and be sure to contact those individuals directly to verify that the investigator has a solid track record.

Specifically, does the private investigator hold the skills best suited for your case? If you are hiring a private investigator for an asset search, for example, they should have in-depth experience and expertise in that particular area.

In addition to consulting their references, you may wish to ask whether the investigator is a member of any professional associations, such as the Association of Certified Fraud Examiners, The American Society of Industrial Security, or the National Association of Legal Investigators. The groups they’ve joined are generally a good indicator of their areas of specialization.

Reports and surveillance tapes produced by private investigators are typically kept confidential.  However, it is reasonable to ask for a sample report – or a copy of a past report with any sensitive or personally identifying information redacted.  This will give you a general sense of the scope and depth of the work they will be conducting on your behalf – and it will also let you know if they communicate in a clear, straightforward, professional manner.  Unless you have requested a highly technical investigation such as DNA testing or computer forensics, their written reports should be free of jargon and very easy to read and understand.

You should also ask about the investigator’s educational and professional background.  Many private investigators have law enforcement or military experience; however, this doesn’t automatically prove that they are experienced conducting investigations in the private sector.  You need to know how many years they have been in business as a private investigator, in addition to information about their prior career in law enforcement.

Check That They Are Licensed

This is the first thing that you should do when looking for a private investigator. Some investigative firms provide a copy of their licensing information on their website. If you contact an investigator who does not list his licensing credentials on his website, be sure to ask him to email you a copy of his current license prior to engaging his services.  If you encounter any resistance to this very reasonable request, then you may wish to consider finding another investigator.

You can call the state licensing agency directly to verify these credentials.  You should ask them whether the specific PI is licensed and what the requirements were for them to become licensed. It is also a good idea to check whether there have been any formal complaints made against the private investigator and if there is such a record, request as much information as possible regarding the nature of the complaint and whether they have been resolved.

Private investigator licensing is administered by different agencies depending on the individual state.  A useful online guide for identifying the right state agency can be found by clicking here.

It is important to note that several states – including Idaho, South Dakota, Mississippi and Wyoming – do not require private investigators to be licensed.  In those states, anyone can claim that they are a private investigator.  However, many other states have much stricter requirements.

Confirm That They Are Insured

Private investigators should be insured. Before hiring a private investigator you should ask them to provide documentation that they are covered by a professional liability policy.  They should be able and willing to provide you with a copy of their insurance certificate.  Again, if this information is not immediately forthcoming from the investigator – or if the policy provided is out of date, or has a very low coverage limit – it is advisable to continue your search for an investigator.  It is always better to be overly cautious than running into problems later on.

Check That They Are Bonded

In several states, being bonded is a requirement for private investigators to receive a license. Being bonded means is that the PI has taken out a corporate surety bond. These bond amounts vary from state to state but are often in the range of $10,000.  The bond provides a degree of assurance that assets (up to the amount of the bond) will be available in the event that a successful legal claim is made against the private investigator.

For example, if a private investigator takes an up-front retainer payment but fails to provide satisfactory services, his client could file a claim against the bond to recover their funds. Therefore, the bond is a form of financial protection for the general public.

Before hiring a PI, check whether their state requires a bond – and if so, be sure to request information on their current bond status.

Will They Testify In Court?

The evidence that a private investigator uncovers can make or break your case.  Whether you are involved in civil litigation, a domestic case or a criminal trial, you need to know that the private investigator is willing, capable and prepared to testify in court if necessary.  For maximum advantage, you may wish to hire an investigator who is credentialed as an expert in a particular area of practice.  Past experience is extremely important.

You want an investigator who will be both comfortable and compelling on the witness stand – and those qualities only come from past experience.

How Often Will They Report Back To You?

Different investigation firms have different policies regarding how frequently they will report back to their clients.  Some provide daily or weekly updates; others provide no news at all until the investigation is complete and they furnish their final report.

In general, more frequent contact is preferable and is considered a “best practice” for private investigators. This allows you to keep up-to-date in monitoring developments in your case, and gives you an opportunity to course-correct if things appear to be headed in the wrong direction.

Some tech-savvy investigators utilize online case management systems that allow their clients to track costs and expenses, in addition to informational updates, in real-time as the case proceeds.

If you keep these general rules in mind, you should be able to confidently hire a qualified private investigator and ensure that your case is handled professionally.

About the Author: John Powers is director of Beacon Investigative Solutions. His articles on private investigation and related matters have appeared in Huffington Post, AOL Money & Finance, Private Investigator Magazine, Competitive Intelligence Magazine and The Legal Investigator. Email him at jpowers@beaconinvestigation.com or follow him on Google and at @JohnPowersPI.

About Beacon: Beacon Investigative Solutions is a national private investigation firm licensed and authorized in 45 states and Washington, D.C.

More than half of European office workers take sensitive company data with them when they’re fired or switch jobs, according to a recent survey from Iron Mountain.  Workers in the U.K. are only slightly less likely to depart with their employers’ crown jewels: 44% of surveyed Brits said they wouldn’t think twice about nicking company data on their way out the door.

Private investigators are often consulted by corporations when their ex-employees sell, leak or divulge trade secrets and intellectual property.  Employees who have been terminated may be much more likely to try to cash-in on their cache of confidential data: 31 percent of survey respondents said they would be willing to deliberately disclose sensitive data if they were fired.

Among ex-employees who do depart with data, 51% leave with customer data, 46% with presentations, 21% with company proposals, 18% with product/service roadmaps, and 18% with strategic plans.

Most former employees don’t intend to sell these materials to the highest bidder.  Rather, workers believe they are entitled to retain copies of projects to which they contributed, and which could help them land a future job.  Yet even relatively well-intentioned employees who walk off with sensitive data can represent a serious security and strategic risk for their former employers.

Enterprises that fail to monitor and mitigate such risks may be hemorrhaging valuable data on operations, customers, finances, strategy and competitive positioning.  Once trade secrets and intellectual property are leaked, corporations typically rely on internal IT and security staff – as well as law enforcement and private investigators – to identify the culprit and staunch the flow of sensitive information.

The more proactive approach is to tighten security before employees are terminated, with a clear set of protocols and standardized plans for preventing data leakage.  These steps may include exit interviews for departing personnel, pre-termination inventory of employees’ files, prompt resetting of security passwords, recovery of keycards, and review of company-issued desktop, laptop and smartphones by IT staff.  Larger corporations may also need to consider more sophisticated network security and compliance systems that actively monitor outgoing email traffic for any unauthorized disclosure of confidential files.

“As businesses across Europe rush to tighten up their data protection policies in advance of new EU legislation, it is extremely worrying to see that employees are leaving jobs with highly sensitive information,” said Iron Mountain senior vice president Patrick Keddy in a statement.  “Companies concerned about information security tend to focus on building a fortress around their digital data and then forget about the paper and the people.”

The standard corporate security model focuses on mitigating external threats, without addressing the probability that valuable documents and data will be carried out the front door by disgruntled, compromised or careless employees.

Photo Credits:

by mksystem

Now that the Supreme Court has ruled against warrantless GPS tracking by police officers, law enforcement agencies are gearing up for next big development in domestic surveillance: unmanned aerial vehicles.  These remote-control miniature aircraft have state-of-the-art digital video capabilities and can read the registration sticker off a license plate from a cruising altitude of 500 feet.  Is it only a matter of time before private investigators and security firms acquire UAVs of their own to follow cheating spouses, insurance scammers and other targets from an undetectable distance?

The U.S. military currently has a fleet of more than ten thousand drones, reports Nick Paumgarten in The New Yorker, and the technology – and hundreds of human operators – are rotating home after their service in Iraq and Afghanistan.

Over 85 percent of the military’s fleet consists of small, lightweight models such as the Puma, Wasp and Raven manufactured by AeroVironment, based in Monrovia, Calif.

AeroVironment suggests that these smaller surveillance-only models are suitably proportioned and priced for sheriff’s offices and metropolitan police departments, unlike, say, the budget-busting $4 million Predator from General Atomics, or the monstrous $35 million Global Hawk from Northrop Grumman.

The Federal Aviation Administration (FAA) had banned domestic drones back in 2007, but recent legislation passed by Congress will open up the American skies to military and civilian drones by 2015.  The FAA has already issued dozens of Certificates of Authorization (COA) to public organizations allowing them to deploy their own unmanned aircraft, including the FBI, Air Force, DARPA, and NASA, as well as major research institutions such as The Ohio State University.

The Electronic Frontier Foundation has compiled a list of certificate holders, and generated this eye-opening map of current drone activity across the country, based on documents obtained from the FAA.

Ultimately, the loudest buzz may be generated by commercial use of drones in the private sector.

Chris Anderson, the editor of Wired and a UAV enthusiast, offered this outlook in a recent interview: “The Internet was once a military thing, but we colonized it and took it away from them.  Right now, drones are scary.  I’d like to make them unscary.  What if all the U.A.V.’s in the air don’t say ‘L.A.P.D.’ and, instead, say ‘Pizza Hut’.”

What if, instead, they say Beacon Investigative Solutions?

Photo Credits:

  by  DrLianPinKoh 

  by  An Honorable German 

In today’s increasingly complex globalized economy, corporate executives often lack critical information on new customers, suppliers, distributors, technologies and emerging markets. Even at midsize and small companies, business leaders now find themselves confronting foreign rivals, game-changing innovations, and other unexpected threats on their own home turf. Experienced investigators are uniquely equipped to develop information in opaque regions and industries, ethically obtaining the facts, figures and actionable intelligence that corporate clients crave.

Competitive Intelligence (CI) represents a significant opportunity for legal investigators seeking to expand their working relationships with corporate counsel and business clients. Specialization in CI can complement existing casework in areas such as trade secret protection, corporate theft, high-level executive background investigations, intellectual property and trademark/patent infringement.

Though the CI field has attracted a number of former officers from federal intelligence agencies, competitive intelligence is not synonymous with corporate espionage. In fact, many practitioners insist that the public record – earnings call transcripts, published interviews, trade shows and conference presentations – is typically the best source of information about competitors’ capabilities and plans. In this respect, legal investigators with extensive experience in due diligence should be well within their comfort zone.

Nevertheless, interviews with primary sources are essential to good intelligence. Published articles and open source materials are an excellent place to begin research, but there’s a reason they’re called secondary sources. Professionals who exclusively rely on the public record are fooling themselves – and probably misleading their clients – if they think they are getting the whole picture.

A large manufacturer recently retained my firm, Beacon Investigative Solutions, to obtain information on the supply chain of its competitor. The competing business had previously handled all fabrication in-house, but was gradually outsourcing more and more of its production to an unknown third party. They hired us to identify that supplier, because they predicted it would eventually outgrow the outsourcing arrangement and launch a competing product line.  This was a common pattern in this particular industry. They wanted to identify the upstart before it emerged as an independent threat.

Beginning with a comprehensive review of the business literature, we found what appeared to be a major scoop in an obscure European academic journal on logistics management: an interview with the vice president for global sourcing, who described (in great detail) their unified sourcing strategy, emphasizing low-cost opportunities in countries like China, where the company had over 2,000 employees. However, subsequent conversations with primary sources revealed they were actually using a fabricator in the U.S.  Beacon sent an experienced field investigator with a law enforcement background to conduct site surveillance at the assembly plant. He parked on a public road and visually monitored the loading and receiving dock over the course of a week. Because of the prior information we’d developed, we knew exactly what we were looking for – and our investigator recognized the relevant trucks as soon as they arrived.  The supplier turned out to be a private company in the Rust Belt. If we’d solely relied on the public record, we would have wasted time and resources searching for a red herring – a Chinese contractor that didn’t exist.

Getting Started: Ground Rules for Competitive Intelligence

Based on our experience leading CI projects over the past decade for a range of clients – from multinational pharmas to tiny tech start-ups – Beacon has developed a few basic ground rules:

Refine the Scope: When running investigations for attorneys, insurers, or private citizens, PIs tend to assume that all negative information on a subject is relevant. However, executive clients on competitive intelligence cases have very narrow areas of interest. They do not want a deluge of unrelated data; and they are unlikely to care if a colleague at a competing firm has had a DUI or a messy divorce. To streamline the process, the first step should be to clearly articulate the goals of the investigation in a formal brief. Ask the client to review the project outline, and encourage them to make any necessary changes or refinements before you begin the research.

Respect the Rules: Most CI professionals are diligent researchers and consultants, not cowboys. Yet it’s important to note that failure to exercise proper discretion and good judgment can have severe consequences. The Economic Espionage Act of 1996 criminalized the misappropriation of trade secrets with penalties ranging $5 million fines to 10 years in prison. Other restrictions and penalties are stipulated in the Uniform Trade Secrets Act, as well as state laws pertaining to unfair and deceptive trade practices, and tortious interference.

Learn the Lingo: One of the biggest challenges in competitive intelligence is quickly coming up-to-speed on an unfamiliar business niche or bleeding-edge innovation. To accelerate the process, begin by reaching out to external consultants, academics, and/or executives at an unaffiliated company in the same industry. You will need to be comfortably conversant on the subject – and ready to ask the right questions – before you approach or interview the target.

Go Far Beyond Google: When scouring secondary sources, it pays to have extensive access to business journals, consulting reports, and third-party SWOT (strength, weakness, opportunity, threat) analysis. Some sources such as Factiva and LexisNexis require paid subscriptions, and white papers from major consulting firms can cost several thousands of dollars.  For intelligence collection on a budget, consider a visit to the library.  The business section of public research universities often offer free access to resources, and many private schools provide database access to their alumni.

Focus on the Future: One of the primary goals of CI is to identify and interpret signals that indicate the future direction of markets, providing first-mover advantage to firms that can capitalize on new opportunities – and accurately assess risks – ahead of their slower-reacting rivals.  Accurate facts are still essential; but the quality of analysis is equally important.  This may require a change in perspective for legal investigators who are accustomed to presenting information, such as hard evidence in a criminal or civil matter, without any editorializing or extrapolation.

Many corporate clients insist that their contractors do not misrepresent themselves when conducting interviews with direct competitors.  Lawsuits and allegations related to corporate espionage have hounded executives at WestJet, SAP, Oracle and Hewlett-Packard in recent years.  No executive wants to wind up with an embarrassing headline in The Wall Street Journal and their concerns about reputational risk deserve to be addressed directly.  First, potential clients need to know that the information you obtain will be accurate and actionable.  Secondly, they should be properly assured that the intelligence collection methods are legal and ethical.   Of course, legal investigators are already aware that nearly everything they do during the course of case could eventually come out in court, which puts them in an excellent position to assure corporate clients that their methods are tested, tried and true.

About the Author: John Powers is director of strategic intelligence for Beacon Investigative Solutions, a national investigation firm licensed in over 40 states.   You can reach him at 800-535-2136 or jpowers@beaconinvestigation.com.

A version of this article was featured in the Spring 2012 issue of The Legal Investigator, published by The National Association of Legal Investigators.

Photo Credit:

JFXie 

Two women were awarded an $18.5 million verdict by a Texas jury for injuries sustained when the Greyhound bus they were riding flipped over while the driver was talking on his cell phone.  That verdict included an $11.6 million award to a plaintiff represented by Ron McCallum of the Law Offices of Ted Lyon in Mesquite, Texas, whom Beacon assisted with locating out-of-state witnesses in the lead-up to the trial.

The witnesses included a passenger seated directly behind the driver at the time of the crash, an initially uncooperative source that Beacon located, interviewed and chaperoned from his home in Idaho all the way to successful testimony in Texas.

The plaintiffs presented evidence that the Greyhound driver had a poor driving record and had placed 17 calls on his personal cell phone that night, during a snowstorm that had left the highways covered in three inches of ice.

Two passengers testified at the trial, including one who saw the driver on his phone throughout the trip, and another who witnessed other bus drivers putting chains on their tires at a rest stop earlier that night, as reported by LawyersUSA.

The five largest U.S. banks – and thousands of their consumer and business customers – were targets of phone-based phishing fraud in the second half of 2011. In total, the attacks targeted 30 of the 50 biggest banks in the nation.

New York is the state with the most potential victims, with over 22,000 of these so-called “vishing” (voice-call phishing) incidents reported between July and December 2011. There were 21,000 incidents in Washington, D.C.; 19,500 in Phoenix; 18,500 in Portland, Ore. and 18,000 in Seattle. While financial institutions focus on strengthening the security of online banking, criminals pursue the next weakest link: unsuspecting customers and bank employees who can be duped into divulging information over the phone.

A recent report in Dark Reading offers some operational insights on the attacks, in which criminals spoof their caller ID to make it appear that they are calling from a legitimate financial institution. Posing as bank employees, the fraudsters solicit private account details, then use that information to withdraw funds and drain accounts.

These schemes are apparently a growing and lucrative niche for organized crime. Investigators have traced around 300,000 numbers used by the criminal gangs, many of which originate overseas on VoIP call networks. One of the major gangs reportedly used 4,000 different phone numbers. The attackers can utilize software that enables them to show whatever phone number they want on the target’s Caller ID.