Finding assets can be satisfying work, but frustration sometimes comes in realizing that a client’s lawyers haven’t been asking the right questions in their depositions.

We have written repeatedly that getting bank account information without a court order is illegal (other than discovering it on a shared computer or in records lying around). When we are looking for assets before a lawsuit has been filed, getting at bank records is a long shot, and what we look for are banks and brokerage accounts our clients’ lawyers can ask about when the time comes for discovery.

But how unfortunate it is when a client has been through discovery, or perhaps has a divorce agreement the former spouse is cheating on, and we find out that the lawyers never asked the right question.

The right question involves not just what someone makes, but what a company may be paying a company that employs that person or that beneficially owned by that person. The right question might be: “we see that your Oklahoma company paid taxes in seven other states. Why? What activities has the company had there?”

Not long ago, a woman came to us and asked us to find out where her ex-husband is working. We found convincing evidence that he was still employed at the same company as he had been during the divorce. At the time, his boss had been deposed and told our client’s lawyer that the ex-husband was making a paltry amount of money.

This seemed unlikely given his title and his history of high compensation. When we looked at the deposition transcript, it turned out that the boss had never been asked about beneficial ownership of companies.

It can work this way: instead of paying Mr. Jones his full salary, it pays Mr. Jones a small amount of money so that Mr. Jones can look as if there’s not much money to go after. The real money goes to Alpha LLC, a company Mr. Jones controls. Alpha LLC may have an agreement with the company that it will supply Mr. Jones’ services, for instance.

Companies don’t care how they pay you as long as they account for all of their payments and withhold the right amount of taxes and other government payments. If they are public and Mr. Jones is a major executive, they may have to disclose the compensation arrangement in securities filings. But if they are private, they don’t have to tell you about those payments to Mr. Jones’ side companies, trusts, or other vehicles.

Unless of course they are under oath and you ask them.

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Photo of Philip Segal Philip Segal

Charles Griffin is headed by Philip Segal, a New York attorney with extensive experience in corporate investigations in the U.S. for AmLaw 100 law firms and Fortune 100 companies. Segal worked previously as a case manager for the James Mintz Group in New York and as North American Partner and General Counsel for GPW, a British business intelligence firm. Prior to becoming an attorney, Segal was the Finance Editor of the Asian Wall Street Journal, and worked as a journalist in five countries over 19 years with a specialization in finance. In 2012, he was named by Lawline as one of the top 40 lawyers furthering legal education.  Segal has also been a guest speaker at Columbia University on investigating complex international financing structures, and taught a seminar on Asian economics as a Freeman Scholar at the University of Indiana.  He is the author of the book, The Art of Fact Investigation: Creative Thinking in the Age of Information Overload (Ignaz Press, 2016). He lectures widely on fact investigation and ethics to bar associations across the United States.