A story in today’s Wall Street Journal about “Why the Virtual Reality Hype is About to Come Crashing Down” makes the simple point that computers haven’t caught up to all the permutations of real life to make a “virtual reality” headset experience resemble a genuine experience.

A short demo is one thing, but life goes on after the short demo is finished.

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“The dirty little secret about [virtual reality] is that the hardware has run ahead of the content,” says the Journal.

My view is that catching up to real life is something that it is hard to see computers doing anytime soon, a point made in my recently published book, The Art of Fact Investigation: Creative Thinking in the Age of Information Overload.

The book makes the case that figuring out problems related to human behavior requires guesswork and the flexibility to change course when one series of guesses appears to be the wrong way forward. Computers are wonderfully flexible and free of emotional bias, but are completely unimaginative.

While computers can sort easily through data people enter onto their hard drives, they have a much harder time saying, “Here is something you should expect to find but do not.” Example: risk management programs failed to note the suspicious fact that Bernard Madoff’s alleged billions under management were audited by a tiny accounting firm in a suburban shopping mall. The computers did not say (because they were not programmed ahead of time to say), “I should be seeing a Big-Four auditor here but I don’t see it.”

But what about all the hype about “Big Data” and our ability to predict things based on billions or individual cases only a computer can keep track of?

The problem is that in some kinds of investigations (who is this particular person? What is the probable reaction of this particular company to litigation?) we don’t demand an answer about what other people or companies have done in the past.

Big data aggregates lots of individual results, but sometimes when the stakes are high, we want to disaggregate and find out what this particular person did at work eight years ago to prompt a departure left off a resume, or what this particular company’s board is like when faced with a lawsuit.

You won’t find those answers in any magical database. If you are lucky and smart, you will find some clues that will help you put together a probable story.

If that sounds less than the neat and tidy solution you were hoping for, who said real life was neat and tidy?

Want to know more?

  • Visit charlesgriffinllc.com and see our two blogs, The Ethical Investigator and the Divorce Asset Hunter;
  • Look at my book, The Art of Fact Investigation (available in free preview for Kindle at Amazon);
  • Watch me speak about Helping Lawyers with Fact Finding, here.

When is a big financial story an unsurprising financial story? When it turns out that people from corrupt and repressive countries are sneaking their money offshore to keep it hidden.panama papers icij.jpg

The world today is tearing into a huge leak of Panamanian legal documents unearthed by a German newspaper and shared via the International Consortium of Investigative Journalists.

These have caused a political scandal in Iceland, among other places, because according to the report the prime minister of that country turned out (via a secret offshore company set up in Panama) to be a creditor to several Icelandic banks. That’s ordinarily not a problem (other than not being able to get your money back in the case of Iceland at that time). But it is certainly awkward if you happen to be negotiating on behalf of the government against the creditors (i.e., against yourself).

There are also figures in the United Kingdom said to have used offshore companies.

Those were the big news-making events, even though people from 51 countries (plus the Palestinian Authority) were reported to be using Panamanian companies set up by a particular law firm.

The reason the people from U.K. and Iceland led the news with this leak? Our money is on the theory that they are the only ones from countries in the report that are the among the world’s 20 least corrupt countries, according to the latest Transparency International Corruption Perceptions Index.

About half the countries that make it into the Panama Papers rank as less corrupt than the median Transparency International corruption ranking for 2015. But that still means only that they are perceived to be less corrupt than China, Colombia and Liberia.

A better proxy for where to expect offshore activity among the powerful may be the Freedom in the World rankings from Freedom House. Iceland and the U.K. are rated as “free,” but just 18 of the 51 countries represented in the Panama papers were also seen to have enough political rights and civil liberties to merit the “free” rating. The rest of the countries represented in the Panama Papers were “partly free,” “not free,” or “the worst of the worst” (Saudi Arabia, Syria and Sudan).

While the Panama Papers is careful to underline that the mere use of an offshore company may be completely legal, the ICIJ and everyone else knows that offshore companies can also be used to hide stolen money or to evade creditors.

It’s the evasion from creditors that usually gets our firm involved, but we have the following advice to all but the highest net worth clients:

  • It can be expensive to set up a complex offshore regime, so unless you are looking for money in the millions, it may not be worth the similar charges to 1) find the money and 2) go to court in a tax haven to get it back.
  • For Americans, we advise looking “offshore” in the United States first.

In the U. S. it’s very cheap and easy to establish a limited liability company that can be hard for creditors to find. This company can hold cash, real estate and other assets just as easily as an offshore one can. We have written about these repeatedly on our other blog, The Divorce Asset Hunter.

If you pay an incorporator to set up a Delaware company  and have that company based at the office of a friendly lawyer ( and not at any address linked to you) it can be very difficult to track such a company back to its beneficial owner. Cracking it with a court order is a lot easier and cheaper than going to court in the Caribbean, but just finding these companies set up by someone who knows what he’s doing can take a lot of work.

It may not have the glamor of Panama, the Cook Islands or the Caribbean, but for someone looking to hide $500,000, a U.S. LLC with an innocuous name can get the job done.

Want to know more?

  • Visit charlesgriffinllc.com and see our two blogs, The Ethical Investigator and the Divorce Asset Hunter;
  • Look at my book, The Art of Fact Investigation (available in free preview for Kindle at Amazon);
  • Watch me speak about Helping Lawyers with Fact Finding, here.

A fascinating piece in today’s Wall Street Journal about a Japanese collector of North Korean garbage got me thinking about the value not just of garbage in a normal investigation, but to take a minute and to ask, ‘What is garbage?the value of garbarge.jpg

First, the article: Stuffed into a rented room near Tokyo are all kinds of cigarette packages that indicate class divisions in a supposedly classless society; ration books from a country that has suffered numerous recent famines; even an old phone book that cost $2,000 on the black market. A Korean-speaking history professor in Japan has collected it all, mostly from trips to the part of China that borders on North Korea.

Our clients sometimes ask us how we gather information when public records, databases and interviews don’t get us everything we need. One option we sometimes discuss (but very rarely get hired to do because of the expense) is to go through the garbage of people related to the investigation.

Picking up someone’s garbage is a complicated endeavor, in addition to the unpleasant task of physically sorting through it. Not only do you have to figure out where it gets left and when, but you need to make sure that you have the right to collect it at all. If it’s on private property, you are trespassing and stealing if you take it. Even if abandoned on public property, some states may still frown on the idea of taking it.

Appreciating the value of garbage can help an investigation that goes nowhere near a trash can.

Garbage is something that was once considered important to its owner but no longer is. But just because the owner doesn’t care about it doesn’t mean the rest of us cannot find use for it. That’s easy to see if you spot some nice piece of Danish furniture put out on the curb, but it applies to information too.

Think about a summer cottage purchased years ago by a married couple. Along the way the marriage sours and the husband begins to skim money out of the family business into a secret company he founds. The couple sells the cottage as the children grow up and move away, and then divorce proceedings commence.

When the wife approaches us with the suspicion that her husband has hidden assets, we take a look at his entire profile of both today and years past. We search the names of companies linked to the address of the former cottage and find a company was once based there but now has an updated address.

That is probably the one hiding the company assets, and that is garbage picking: an address no longer of use to the husband, but linked forever to the company he once founded and which is still very important to him.

Want to know more?

  • Visit charlesgriffinllc.com and see our two blogs, The Ethical Investigator and the Divorce Asset Hunter;
  • Look at my book, The Art of Fact Investigation (available in free preview for Kindle at Amazon);
  • Watch me speak about Helping Lawyers with Fact Finding, here.