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Working Effectively With Private Investigators


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Working Effectively With Private Investigators

  1. 1. WORKING EFFECTIVELY WITH PRIVATE INVESTIGATORS by: Jim Cronin, CFE November 15, 2005 1. DO YOU REALLY NEED A PRIVATE INVESTIGATOR? This may help identify and communicate what needs to be done: a. THE DRILL DOWN: 1) WHAT ISSUE(S) ARE WE TRYING TO RESOLVE? a) Ensure that the investigator has at least a general understanding of the purpose of the assignment and the intended use of the requested information. 2) WHAT INFORMATION WOULD HELP US RESOLVE THESE ISSUE(S)? a) The more specific you are, the more likely you are to get what you want. 3) HOW SHOULD WE GO ABOUT GETTING THIS INFORMATION? a) Conference the matter with the investigator. Make him/her a part of your team. b) Consider allowing the investigator to make inputs as to 1> Possible leads: a> Investigators may know of sources, methods and techniques that the client may not be aware of. b> Investigators are likely to be somewhat secretive as to their sources. 1: Investigators may consider certain methods and sources to be proprietary in nature. 2: Investigators can advise as to the feasibility of the requested taskings. b. IS A PRIVATE INVESTIGATOR THE BEST SOLUTION TO YOUR PROBLEM? Other types of experts to consider: a) Paralegal(s) b) Forensic accountants c) Medical records analysts d) Independent insurance adjusters e) Forensic document examiners Working Effectively with Private Investigators By Jim Cronin, CFE Page 1 of 20
  2. 2. f) Forensic engineers g) Forensic medical specialists h) Polygraph examiners i) Computer forensics specialists j) Process servers k) Repossession specialists l) Professional photographers 1) Like attorneys, there are many generalists as well as highly specialized types of private investigators. Some specialized types of private investigators include: a) Surveillance b) Criminal defense c) Insurance 1> Many investigators who advertise being insurance investigators specialize in surveillance and actually have very little knowledge of insurance. 2> There are investigators who have very specialized knowledge of both insurance and investigation methods. d) Death/medical negligence investigations e) Covert electronic surveillance f) Electronic countermeasures g) Executive protection/risk assessment h) Online research i) Computer forensics j) Electronic eavesdropping detection k) Canine 1> Explosives/Accelerants 2> Drugs l) Accident reconstruction m) Fire origin & cause n) Executive protection Working Effectively with Private Investigators By Jim Cronin, CFE Page 2 of 20
  3. 3. o) Financial investigations p) Corporate investigations 1> Undercover investigations q) Maritime investigations r) Asset Investigations 2) WHAT CAN A PRIVATE INVESTIGATOR DO FOR YOU? a) A word of caution here. While there are some generalists out there, private investigators tend to specialize (just as do attorneys). The investigator's qualifications must be relevant to client's needs for the assignment at hand. b) Some of the sub-specialties of private investigation: 1> Surveillance 2> Criminal Defense 3> Insurance claims investigations 4> Death investigations 5> Electronic countermeasures 6> Executive protection 7> Online research 8> Corporate investigations c) SOME SERVICES PRIVATE INVESTIGATORS CAN PROVIDE: 1> Interviews: a> Many private investigators have law enforcement backgrounds and are highly-trained and experienced interviewers. b> Investigators can provide insight into the perceived veracity, character and education level of a subject, as well as whether or not the subject would be likely to be a favorable witness. Working Effectively with Private Investigators By Jim Cronin, CFE Page 3 of 20
  4. 4. c> Having a private investigator conduct an interview with a potential witness can often be protected as attorney work product, not subject to discovery by the adverse counsel. This can be beneficial if you decide not to depose the person if that person's account is less than helpful to your case. If the witness's account is deemed to be helpful to your case, an interview by an investigator will help to quot;pin-downquot; the witness, and their prior statements made to the investigator may be introduced as inconsistent prior statements if their account changes at deposition or trial time. 2> Background Investigations a> Due diligence b> Credibility Assessment c> Witness impeachment 3> Public records checks 4> Accident investigation/scene photography 5> Asset Investigations 6> Criminal Defense Investigations 7> Environmental Investigations 8> Industrial Accident Investigations 9> Litigation Checks/Criminal Histories a> Online b> Onsite 10> Worker's Compensation Investigation a> AOE-COE b> Surveillance 11> Insurance Investigations: a> Property: 1: Theft 2: Fire Working Effectively with Private Investigators By Jim Cronin, CFE Page 4 of 20
  5. 5. b> Casualty: 1: Premises liability 2: Auto collision 3: Food contamination 4: Product liability c> Worker's Compensation: d> Life & Health 12> Locates: a> Witnesses b> Insureds c> Heirs d> Defendants 13> Difficult service of process a> If Subject is: 1: Evasive 2: Difficult to locate b> Short notice/impending statute toll date 14> Surveillance: a> Specialized equipment needed b> Technicians may or may not be highly trained investigators. c> Very wide variance of qualifications in this area 15> Corporate Investigations a> Theft/conversion/misappropriation b> Embezzlement c> Workplace violence d> Sexual harassment e> Competitor intelligence f> Undercover operations g> Executive Protection h> Pre-employment background (FCRA) investigations Working Effectively with Private Investigators By Jim Cronin, CFE Page 5 of 20
  6. 6. 16> Data sources: a> Specialized access to information is a major tool of private investigators. 1: Public Information a: Some are free b: Most are fee-based 2: Proprietary Information b> Not all investigators have access to the same sources. c> Not all sources are created equal. There are significant differences in various sources: 1: Search engine power 2: Thoroughness of information a: Truncation of SSN's vs. entire SSN's: Many data providers now truncate the last four digits of a Subject's social security number. This can be a limiting factor for some investigators. 3: Recency of information: The frequency of updates can be critical, and it varies widely among data providers. 4: Accuracy of information 5: Volume of information 6: Cost of information 7: Sources are often public, but are specialized by state. Many require special contracts, deposits, and monthly fees. Many systems use arcane commands requiring specialized knowledge. 8: No single source has all the information. 9: Each data source is a quot;toolquot; in the investigator's toolbox. Leveraging data from many disparate sources is often the key to finding the critical piece of the investigative puzzle. Working Effectively with Private Investigators By Jim Cronin, CFE Page 6 of 20
  7. 7. 2. FINDING A PRIVATE INVESTIGATOR: a. Referrals/recommendations from fellow attorneys 1) Best single source b. Recommendations from known private investigators c. Professional associations 1) Examples: a) PNAI (Pacific Northwest Association of Investigators) b) WALI (Washington Association of Legal Investigators) c) OALI (Oregon Association of Licensed Investigators) d) CALI (California Association of Licensed Investigators) e) ASIS (American Association of Industrial Security) f) ACFE (Association of Certified Fraud Examiners) 2) Benefits: a) Contacts with peers in other locations b) Contacts with specialists c) Professional ethics enforcement d. Washington Department of Licensing Professional License Database: 1) 2) Search by: a) Individual name b) Firm name c) License type d) UBI e) City f) County Working Effectively with Private Investigators By Jim Cronin, CFE Page 7 of 20
  8. 8. 3. SELECTING A PRIVATE INVESTIGATOR: a. THINGS TO CONSIDER IN CHOOSING A PRIVATE INVESTIGATOR: 1) Investigators and attorneys have something in common. They all think they're the best at what they do. Therefore, quot;caveat emptor.quot; 2) Getting the right investigator for your specific needs: a) Choosing the wrong investigator is an invitation for disaster. b) Private investigators (just like attorneys) come in a wide range of types and qualifications. Private investigators range from security guard rejects to former FBI Agents and everything in between. c) Qualifications to become a private investigator in Washington: (RCW 18.165.030 et seq.) 1> Be at least 18 years of age; 2> Be a citizen or resident alien of United States; 3> Not have been convicted of a crime in any jurisdiction, if the director determines that the applicant's particular crime directly relates to his or her capacity to perform the duties of a private investigator.. 4> Be employed by or have an employment offer from a private investigator agency or be licensed as a private investigator agency; 5> Submit a set of fingerprints; 6> Pay the required non-refundable fee for each application; 7> Submit a fully completed application that includes proper identification on a form prescribed by the director.. 8> Pass an examination determined by the director to measure the person's knowledge and competence in the private investigator agency business... Working Effectively with Private Investigators By Jim Cronin, CFE Page 8 of 20
  9. 9. d) PITFALLS: 1> Respondeat Superior: (Latin for quot;let the master answerquot;), a key doctrine in the law of agency, which provides that a principal (employer) is responsible for the actions of his/her/its agent (employee) in the quot;course of employment.quot; 2> Potential torts include: a> Intentional infliction of Emotional Distress b> Slander c> Libel d> Trespass e> Invasion of Privacy f> Tortuous Interference With Business g> False Imprisonment h> Malicious Prosecution i> Lack of due diligence in performance of duties 3> Lack of expertise: a> Accepting a specialized assignment for which the investigator is not qualified. 3) Most private investigator's are either: a) solo practitioners b) small firms 4) Therefore, it is often a good idea to have a good working relationship with more than one private investigator. 5) Feast and Famine: a) Since most private investigators are one or two person organizations, it is important to determine if the investigator will be able to perform the work satisfactorily within the client's time constraints. Possible limiting factors include: 1> workload 2> vacations 3> family matters 4> medical matters Working Effectively with Private Investigators By Jim Cronin, CFE Page 9 of 20
  10. 10. b) A good investigator will either decline an assignment or subcontract the work if he/she knows that they will not be able to produce the needed result in the time/budget available. 6) Armed vs. Unarmed: a) Liability Issues: 1> Most private investigators are not licensed to carry firearms. There is no need to be armed in most cases. A good investigator will steer clear of dangerous situations whenever possible. Most savvy clients will insist that their investigators not be armed for the overwhelming majority of investigating assignments. This is done to limit potential liability. Instances where it may be appropriate to used an armed investigator include an executive protection detail or a workplace violence prevention assignment. b. ISSUES TO DISCUSS WITH AND DOCUMENTS TO OBTAIN FROM THE PRIVATE INVESTIGATOR : 1) QUALIFICATIONS: a) Areas of specialization: 1> Most private investigators specialize. a> Beware of private investigator's who advertise that they quot;do everything.quot; b) Experience: 1> Ask the investigator questions regarding the specific type(s) of investigative assignments: a> How many of these have you done in the past year? b> Ask for redacted samples of reports of similar nature to assignment you will be giving him/her. Ask for several different reports. 1: This will help confirm whether or not the investigator has skills relative to the type of assignment you need him/her for. 2: By asking for multiple reports, you can see if the investigator uses quot;cannedquot; reports or if he/she has writing and investigative skills commensurate with your needs. Working Effectively with Private Investigators By Jim Cronin, CFE Page 10 of 20
  11. 11. 2) CREDENTIALS AND LICENSURE: a) Professional Liability Insurance Certificate: 1> Washington law does not require private investigators to be insured! At a minimum, private investigative agencies in Washington are only required to maintain a $10,000 bond. This provides an extremely limited amount of coverage. a> Source: RCW 18.165.100 2> One-third of Washington private investigators are NOT insured. Of 444 active private investigator Agencies in Washington, 121 of them are bonded, but are NOT insured! (Source: Ms. Pat Brown, Administrator, Washington DOL Public Protection Unit, telephone (360) 664-6608, as of October 25, 2005) 3> Insurance vs. Bonding a> Even if your private investigator is legally quot;fully insured,quot; the investigator/agency (and his/her client in turn) may be under-insured. This is because in order to be legally quot;insuredquot; (in lieu of bond) Washington law only requires: 1: $25K bodily or personal injury coverage / and 2: $25K property damage coverage This is still relatively moderate coverage considering the potential exposures. b> Professional private investigators carry at least $1M per occurrence professional liability insurance. This protects the investigator and (in-turn) his/her client(s). c> The attorney should request the private investigator to have their broker forward a copy of the certificate of professional liability insurance coverages directly to them. Ensuring that an investigator is fully insured may well be the most important factor in selecting an investigator/agency. If the investigator is insured, he/she will almost certainly be properly licensed. Working Effectively with Private Investigators By Jim Cronin, CFE Page 11 of 20
  12. 12. d> Not all professional liability insurance is created equal! quot;Claims Madequot; versus quot;Per Occurrencequot; Coverage: 1: Attorneys should ensure that their private investigator's professional liability insurance coverage is quot;per occurrencequot; versus quot;claims made.quot; 2: quot;Per occurrencequot; covers insured perils up to the statute toll date for the tort. 3: quot;Claims madequot; coverage only covers those claims actually made during the policy period. Claims made after the policy period has expired are not covered. quot;Claims madequot; coverage severely limits the time during which a claim may be made against the investigator's professional liability policy. By the time an alleged tort is discovered, investigated and action brought, there may be no coverage, leaving the attorney and client(s) exposed and liable. Attorneys should always ensure that any private investigator who does work for him/her carries quot;Per occurrencequot; professional liability insurance of at least $1 million per occurrence. b) Curriculum vitae: The attorney should consider the relevancy of an investigator's qualifications to the assignment at hand. The c.v. should include: 1> Professional training completed 2> Professional experience 3> Presentations given 4> Articles authored 5> Professional associations Working Effectively with Private Investigators By Jim Cronin, CFE Page 12 of 20
  13. 13. 6> Professional Designations/Certifications: a> Not all designations are equal. Some private investigators use designations which are next to meaningless. Some of the better professional designations include: 1: JD (Juris Doctorate) 2: CFE (Certified Fraud Examiner) 3: CIFI (Certified Insurance Fraud Investigator) 4: CPP (Certified Protection Professional) 5: CFI (Certified Fire Investigator) 6: CLI (Certified Legal Investigator) b> Clients should consider asking for copies of relevant professional certification certificates to ensure that they are: 1: Actually issued 2: Current c) Licensure: Be sure to have the investigator send you a copy of all his licenses. Check: 1> How long has the investigator/agency been licensed? 2> Currency? 3> Type? 4> Check Washington DOL site a> 5> Consider calling the Washington DOL to determine if there have been any complaints regarding the investigator and the outcome/resolution of those complaints. Has any disciplinary action been taken? 6> Jurisdiction(s) a> Note that Oregon law does not permit a private investigator licensed only in Washington to enter Oregon to investigate. Washington law allows private investigators licensed in Oregon to enter Washington to conduct investigations for up to 30 days per year. (RCW 18.165.120) Working Effectively with Private Investigators By Jim Cronin, CFE Page 13 of 20
  14. 14. d) References: 1> A potential client may wish to ask a private investigator for names of other attorneys for whom he/she has done work in the recent past. Trust but verify! e) Web site? 1> A web site may provide a potential client with insight as to the investigators experience, clientele and specialties. 2> Beware of investigators whose web sites: (RCW 18.165.080) a> Do not identify the licensees/principals of the business b> Do not show the address of record of the business c> Do not list the license number(s) under which they operate 3> Also beware of investigator's web sites that: a> Belie a lack of substance or exaggerate their capabilities b> List quot;cheating spouse investigationsquot; or quot;lost love locatesquot; as specialties f) Expert Witness? 1> If the assignment is likely to involve the investigator being deposed and/or testifying in court, ask the investigator if he/she has ever been certified as an expert witness. a> When? b> How many times? c> Where? d> What subject matter? e> Client(s)? f> Specifics.. Working Effectively with Private Investigators By Jim Cronin, CFE Page 14 of 20
  15. 15. 3) TERMS OF SERVICE: a) Rates: 1> Hourly 2> mileage fees b) Contract: 1> Contracts protect both the client and the investigator. 2> Many investigators do not require them. c) Retainer/deposit vs. Billing: 1> This is an area subject to negotiation between the parties. c. INVESTIGATING THE INVESTIGATOR: 1) Reputation: a) Check with fellow attorneys regarding the reliability, veracity, cost, timeliness and quality of the investigator and his/her work. 2) Litigation: a) Both Superior and District/Muni Courts b) Is the investigator a named defendant in any professional liability cases? 3) News Scan: a) Online through public library site, full text searches of Washington newspapers are available for free. Library card required. 4) Search Engine: (Google etc) a) By name b) By telephone number Working Effectively with Private Investigators By Jim Cronin, CFE Page 15 of 20
  16. 16. 4. THE ASSIGNMENT: The following are issues that will need to be addressed in each assignment to a private investigator: a. CONFLICT OF INTEREST CHECK! 1) Should be at beginning of assignment discussion. Describe the extant matter briefly and name the relevant involved parties. 2) Ask the investigator if the assignment would pose any conflict of interest before divulging any sensitive information. b. EXPECTATIONS: 1) Letter of Engagement/Assignment: a) Successful business relationships depend on all parties understanding, agreeing upon and meeting each other's expectations. Document them up front. These may be documented by either party, and may be by letter or email, but should be agreed upon by both in writing before work begins. 1> WHO a> Who will actually be doing the work? 1: The agency principal, an employee, or a subcontractor? 2> WHAT a> What is to be done? 3> WHEN a> Is the assignment to be started/completed? b> quot;Benchmarks/milestones/deadlines:quot; 1: Periodic reporting and 2: Evaluation of status/progress c> Periodic Reality Checks: The client must periodically evaluate the focus, scope and need for the investigation and the performance of the investigator. 1: Make changes as needed. 2: Don't wait until it's too late! Working Effectively with Private Investigators By Jim Cronin, CFE Page 16 of 20
  17. 17. 4> HOW a> What general methods will be used to secure the needed information? 5> HOW MUCH a> What are the investigator's rates: 1: Are they commensurate with his/her training, experience and expertise? b) WHAT DO YOU NOT WANT DONE? 1> Spelling out what is not to be done can avoid duplication of effort, embarrassing mistakes etc. c) HOW IS IT TO BE DONE? 1> This is an area where the private investigator can help d) WHEN DOES IT NEED TO BE DONE BY? 1> Allow yourself some quot;wigglequot; time. 2> Set a diary and follow-up, BEFORE your quot;drop deadquot; date. c. TIMING: 1) Once you know that you're going to need to retain an investigator. Don't wait until time is critical to make the assignment! a) Investigators have other cases and other clients too! b) quot;Rushquot; jobs often cost more and have poorer outcomes. d. THINGS TO TELL THE PRIVATE INVESTIGATOR: 1) If previous unsuccessful attempts have been made to secure the information, provide this information (and related documentation) to the investigator. It may help the investigator to know exactly what has already been done so that he/she can benefit from it, and will not be forced to repeat the same unsuccessful attempts. 2) Sometimes the answer to your problem/question is already in your file, but was overlooked! A fresh review by an investigator may reveal unrecognized information relevant to your case. Working Effectively with Private Investigators By Jim Cronin, CFE Page 17 of 20
  18. 18. 3) Fair Credit Reporting Act/Gramm-Leach-Bliley Act/Driver's Privacy Protection Act permissible purposes for obtaining the requested information 4) Provide the subject's SSN to the investigator if relevant and available: a) This can be difficult for some private investigator's to obtain. b) Having the SSN can help facilitate searching for people and documents. e. REPORTING INSTRUCTIONS: 1) To whom to report: a) Privileged Attorney Work Product 1> Keeping the privileged status: a> Release to and/or coordination with third parties by the investigator could jeopardize the privileged status of the report(s), and make them subject to discovery. 2) Report Timing: a) Initial Report - When due b) Updates/Supplemental Reports - Frequency 3) Format: The attorney and investigator should have an understanding and agreement regarding the desired formats for reporting: a) Verbal: 1> In person 2> Telephone b) Written: 1> Email 2> Mail 3> Fax c) Photographs: 1> 35 mm and/or 2> Digital Working Effectively with Private Investigators By Jim Cronin, CFE Page 18 of 20
  19. 19. d) Video 1> Analog or 2> Digital e) Marking: 1> quot;Attorney Work Product/Privileged and Confidentialquot; f) Source documents 1> Forward or retain? 2> Regular or certified copies? f. COSTS: 1) HOW MUCH IS BUDGETED FOR THIS ASSIGNMENT? a) Budget Cap 1> May need to be re-evaluated 2> Helps control costs while providing value for money b) Billing Format: 1> Billing should include a detailed accounting of services provided during billed time in tenths of an hour. May include a chronological time log 2> Copies of receipts for out of pocket expenses should be provided. c) Payment Expectations: 1> Just as attorneys want investigator's service to be rendered in a quality and timely fashion, investigators want to be paid on time. 2> The attorney should tell the investigator: a> Who will actually be paying the invoice. 1: If the attorney will be tendering payment to a third party, this should be understood by both parties in advance. 2: Tendering a bill to a third party does not relieve the client of responsibility for ensuring that the investigator is paid in a timely fashion. Working Effectively with Private Investigators By Jim Cronin, CFE Page 19 of 20
  20. 20. b> How long it will take for payment to be issued. 1: Dilatory clients soon become known within the investigative community. 3> The attorney should ensure the investigator submits IRS Form W-9, Request for Taxpayer Identification and Certification. This is needed for tax purposes. 4> If there is a question or dispute regarding the billing, address it right away, while it is fresh in everyone's mind. a> If agreed expectations have not been met, an adjustment may be in order. A good investigator will do this on his/her own. If not, ask for it if appropriate. b> Remember, however, that the client is paying for the agreed services, not the outcome. 5> A good investigator who wants repeat business will attempt to provide the most value for cost. A good attorney who wants assistance from an investigator again in the future will attempt to ensure that the investigator is paid fairly and promptly. Jim Cronin, CFE, MPA Cronin & Associates Specialized Investigations P.O. Box 1327 Mukilteo, WA 98275 EMAIL: WEB SITE: Office: (206) 992-1555 Mr. Cronin is the principal of Cronin & Associates, a Seattle-area private investigation agency specializing in insurance claims investigation and litigation support. Mr. Cronin has 35 years of investigative experience, with 14 years specialization in insurance fraud investigation and litigation support. He holds a Master’s Degree in Public Administration, and has been a Certified Fraud Examiner since 1992. Mr. Cronin is a nationally-recognized expert in online investigative information. His investigative work has been featured in many regional and national news and trade sources. Mr. Cronin was the 2004 President of the Pacific Northwest Association of Investigators. Working Effectively with Private Investigators By Jim Cronin, CFE Page 20 of 20