background investigation

Artificial intelligence doesn’t equal artificial perfection. I have argued for a while now both on this blog and in a forthcoming law review article here that lawyers (and the investigators who work for them) have little to fear and much to gain as artificial intelligence gets smarter.

Computers may be able to do a lot more than they used to, but there is so much more information for them to sort through that humans will long be required to pick through the results just as they are now. Right now, we have no quick way to word-search the billions of hours of YouTube videos and podcasts, but that time is coming soon.

The key point is that some AI programs will work better than others, but even the best ones will make mistakes or will only get us so far.

So argues British math professor Hannah Fry in a new book previewed in her recent essay in The Wall Street Journal, here. Fry argues that instead of having blind faith in algorithms and artificial intelligence, the best applications are the ones that we admit work somewhat well but are not perfect, and that require collaboration with human beings.

That’s collaboration, not simply implementation. Who has not been infuriated at the hands of some company, only to complain and be told, “that’s what the computer’s telling me.”

The fault may be less with the computer program than with the dumb company that doesn’t empower its people to work with and override computers that make mistakes at the expense of their customers.

Fry writes that some algorithms do great things – diagnose cancer, catch serial killers and avoid plane crashes. But, beware the modern snake-oil salesman:

Despite a lack of scientific evidence to support such claims, companies are selling algorithms to police forces and governments that can supposedly ‘predict’ whether someone is a terrorist, or a pedophile based on his or her facial characteristics alone. Others insist their algorithms can suggest a change to a single line of a screenplay that will make the movie more profitable at the box office. Matchmaking services insist their algorithm will locate your one true love.

As importantly for lawyers worried about losing their jobs, think about the successful AI applications above. Are we worried that oncologists, homicide detectives and air traffic controllers are endangered occupations? Until there is a cure for cancer, we are not.

We just think these people will be able to do their jobs better with the help of AI.

Another EB-5 visa fraud, more burned investors. For people outside the United States trying to pick a reputable investment that will get them permanent residency in the U.S., sorting through hundreds of projects is often the hardest part of the job.

EB-5 due diligence

There is plenty written about what you should do before you invest, one of the latest guides being from the North American Securities Administrators Association, here. You can read up on EB-5 frauds here.

What are the warning signs of fraud? Last year’s revelation of a huge fraud at a Vermont development that had sucked in hundreds of investors led many to wonder, “How could we have known this would blow up?”

There is no guaranteed way to find fraud, but if you see things that would give a prudent investor pause; if the project’s sponsors don’t have a good track record; if you don’t understand the risks of the project (and they all have risks) walk away.

Remember, many reputable immigration lawyers refuse to recommend an EB-5 investment because they don’t want to be sued if the investment encounters problems, whether of a normal business variety or because of fraud. Even if your lawyer recommends an investment, you should still perform due diligence on the project.

Even more surprising to some non-Americans, once the government spots EB-5 fraud, it’s often too late for the investors who have put in their money. Sometimes investors can recover and sometimes not, but the green cards they wanted will not be delivered and they have lost time in addition to money.

Looking at the track record of a developer is much easier than going through the hundreds of pages of documents you and your lawyer will need to examine before you invest your money. You will always need to do both, but as you sort through five or ten possible investments, start with the track records.

The Vermont Fraud Warning Signs

One of the most celebrated of all the projects was the group of investments in the northeastern state of Vermont, near the border with Canada. Jay Peak was an old ski hill that fell into the hands of a Canadian operating company. They began with the EB-5 program by raising money for one project, but then in 2008 the Canadian company sold the business to a man local press described as “mysterious,” Ariel Quiros. He grew up in New York, was of Puerto Rican and Venezuelan background, but had spent years in Korea building unspecified businesses which supposedly gave him the ability to buy Jay Peak for $25 million.

Once Quiros bought the mountain, the EB-5 projects accelerated, with six more projects for hotels and finally, before the scheme was exposed, a bio-technology park that was supposed to flourish among the ski hills and dairy farms of far-northern Vermont.

The main thing an investor should have asked about Jay Peak was, who exactly is Ariel Quiros, the owner? The whole sickening unravelling of the investment project is available at vtdigger.org (going from most recent to oldest story). But anyone investing after January 14, 2014 would have had an easy way to throw this one in the waste basket. A Vermont Digger article available on line described Quiros’ track record this way:

  • He lost his seat on the board of Bioheart Inc. after AnC Bio [Quiros’ company] failed to make the second installment in a $4 million investment.
  • Quiros also survived a Texas lawsuit in which two investors alleged breach of contract after they didn’t get their money back in full in 10 years.
  • And a Florida man claims he never received almost $16,000 worth of equipment from a [Quiros] company called Q Vision, but he appears to have dropped his pursuit of the matter.

Of course, full due diligence could involve verifying the assertions in this article, but if they turned out to be true, who would entrust half a million dollars and a green card to someone with a track record of not following through on investments and unhappy investors alleging breach of contract?

If Quiros occasionally had disputes with investors and partners, you would also ask a more basic question: how did he make his money – the money that bought Jay Peak — in the first place?

The article in January 2014 said,

“Quiros has melded street smarts from New York, military sensibilities from the Korean Demilitarized Zone and a love of adventure into a business empire that spans the globe, starting with international trade from Korea in the early 1980s… GSI Group, where he got his start in Korea, imported and exported goods ranging from shoes to women’s blouses to radios…He specialized in raw materials, much of it for the Korean government, he says.”

In addition, Bloomberg says that “Mr. Quiros serves as a Director and Principal of GSI Group, a raw materials procurement company for the South Korean manufacturing community with offices in Seoul, Beijing, Sydney, Hong Kong and Miami.”

The only problem is, GSI is one difficult company to find. Quiros shows up on open-source databases as a corporate officer of 96 companies, but these are all in Florida, Panama and Vermont. None of the Florida companies are called GSI.

On line, there is www.GSIkoreanet., but this mentions no overseas offices. GSI Australia’s website says it is a company dealing in poultry, swine and grain. There are no Korean links evident. And it is based in Queensland and Victoria, not New South Wales where Sydney is. The Australia companies registry provides no evidence of any Korean trading company registered in New South Wales.

In Hong Kong, a search of directors of all Hong Kong companies shows that nobody named Quiros and no company called GSI directs any Hong Kong company.

A search of regulatory filings in the U.S. turns up nothing on Quiros until 2010, after he bought Jay Peak. A news search on Bloomberg turns up only GSI Group Inc., a maker of agricultural equipment.

The earliest mention of Quiros in securities filings in the U.S. is in 2011, as an investor in a U.S. biotech company. His Korean address in this filing was: 10th Floor, H&S Tower, 119-2 Nonhyun-Dong, Gangnam-Gu, Seoul, Korea 135-820. A reverse search of this address turns up nothing on GSI.

Are we therefore stunned to learn today that according to the U.S. Securities and Exchange Commission, Quiros never used his own money to buy Jay Peak in the first place? Instead, according to the judicial complaint filed in 2016, Quiros took money investors had already put into Jay Peak when it was owned by the Canadians, and used that cash to buy the ski resort.

Subsequent cash that came in for new projects funded prior projects, but eventually the game was up when Quiros told investors that their hotel project was cancelled and converted into a loan. They would get their money back, he promised, but green cards would not be forthcoming. Quiros is fighting the SEC, while his President has settled with the agency.

In the Bernard Madoff Ponzi scheme, there were red flags that sent many prudent investors away: a small-time accountant for what was supposed to be a multi-billion-dollar enterprise, and no independent custodian for the investor money.

In the case of Quiros and the Vermont project, a history of unhappy investors and a murky source of funds should have been enough for investors to say, “Not this one.”

 

About the firm:

Charles Griffin Intelligence is an independent consulting firm that performs investor due diligence for hedge funds, corporations and individuals both inside and outside the United States. We never do work for any EB-5 developer or regional center. We do not provide legal advice, but can help investors and their lawyers assess the business risk of an investment.

For more information about the firm, please see the website at www.charlesgriffinllc.com. You can also read our blog, The Ethical Investigator, at www.ethicalinvestigator.com

 

Lawyers need to find witnesses. They look for assets to see if it’s worth suing or if they can collect after they win. They want to profile opponents for weaknesses based on past litigation or business dealings.

Every legal matter turns on facts. Most cases don’t go to trial, fewer still go to appeal, but all need good facts. Without decent facts, they face dismissal or don’t even get to the complaint stage.Better innovation in law firms

Do law schools teach any of these skills? Ninety-nine percent do not.  Good fact-finding requires something not taught at a lot of law schools: innovation and creativity. Of course, good judges can maneuver the law through creative decisions, and good lawyers are rightly praised for creative ways to interpret a regulation or to structure a deal.

But when it comes to fact gathering, the idea for most lawyers seems to be that you can assign uncreative, non-innovative people to plug data into Google, Westlaw or Lexis, and out will come the data you need.

This is incorrect, as anyone with a complex matter who has tried just Googling and Westlaw research will tell you.

The innovative, creative fact finder follows these three rules:

  1. Free Yourself from Database Dependency. If there were a secret trove of legally obtained information, you would be able to buy it because this is America, where good products get packaged and sold if there is sufficient demand for them. And Google won’t do it all. Most documents in the U.S. are not on line, so Google won’t help you. For any given person, there could be documents sitting in one of the more than 3,000 counties in this country, in paper form.
  • If you use a database, do you know how to verify the output? Is your John C. Wong the same John C. Wong who got sued in Los Angeles? How will you tell the difference? You need a battle plan. Can your researcher arrange to have someone go into a courthouse 2,000 miles away from your office?
  • How will you cope with conflicting results when one source says John C. Wong set up three Delaware LLC’s last year, and another says he set up two in Delaware and two in New York?
  1. Fight Confirmation Bias. Ask, “What am I not seeing?” Computers are terrible at the kind of thought that comes naturally to people. No risk management program said about Bernard Madoff, “His auditor can’t be up to the task because his office is in a strip mall in the suburbs.”
  • For your researchers, find people who can put themselves in the shoes of those they are investigating. Not everyone can say, “This report must be wrong. If I were in the high-end jewelry business, I wouldn’t run it out of a tiny ranch house in Idaho. Either this is a small business or Idaho’s not the real HQ.” If someone doesn’t notice a discrepancy as glaring as this, they are the wrong person to be doing an investigation that requires open-mindedness.
  1. Don’t paint by numbers. Begin an investigation on a clean sheet of paper. Don’t base your investigation on what someone’s resume says he did. Verify the whole thing.
  • Look not just at what’s on the resume, but look for what was left off Jobs that didn’t go well, and people who don’t like the person.
  • Despite that your client tells you, they don’t know everything (if they did they wouldn’t hire you). If your client thinks you will never find a subject’s assets outside of Texas, look outside of Texas anyway. You owe it to your client.

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 wonderful piece in the Wall Street Journal here called “The Logic of Our Fear of Flying” does a great job explaining our irrational fear of flying using concepts from math. We all know that our chances of dying in a plane crash are much lower than dying in a car accident, and yet many of us get highly stressed when our plane takes off but think nothing of getting into the car and driving at 60 miles an hour on a crowded freeway. Why?

Mathematician Eugenia Cheng explains this irrationality in three ways.

  1. Conditional probability. Our chances of being in a plane crash are low, but our chances of dying IF we are in a plane crash are high. If our car has an accident it could be a fender bender from which we emerge unharmed thanks to seatbelts and airbags.
  2. Expected values. If you may win a $300 million lottery but there are 300 million tickets sold, your expected value is $1. If you attribute the value of your life as infinity or close to it, loss of that life (despite low chances of it happening aboard your aircraft) still looks like a nearly infinite potential loss.
  3. Rate of change. On a plane you go from feeling very safe (on the ground) to very unsafe (during takeoff, one of two most dangerous times to be on a plane) in the space of a few seconds. The faster the rate of change of the chance of disaster, the more anxious Cheng becomes.

I read this article and thought about another risk assessment problem I talk about when I speak to lawyers and lenders around the country about my book, The Art of Fact Investigation.

It’s the paradox that companies are happy to risk handing millions of dollars a year to a relatively unknown new hire who will run a part of their business worth hundreds of millions of dollars, and that they do this while insisting that to spend more than $2,000 on a background check of that person is too expensive.

Why do people take a chance (that they will lose their company millions) when for a thousand or two they could reduce the chances of disaster?

  1. Conditional probability. As with car accidents, there is low conditional probability that an employee who doesn’t work out is so awful that he takes down the entire company. Hiring an MBA to run your company is not the same thing as hiring a convicted murderer on probation to do any kind of job.
  2. Expected values. If you characterize the downside of a bad hire as a “bad fit” at the job that can be remedied, then you as the hiring decision-maker won’t get as much blame as if you had hired the next Nick Leeson who ruins you and everyone you work with.
  3. Rate of change. When an employee officially “doesn’t work out” it’s usually not a surprise event but a combination of factors that have built over time. Perhaps there has been high turnover of people under that person or a string of underperforming quarters, until the company decides that person doesn’t work. The Nick Leeson rate of change (from hero to zero overnight) is rare.

In mathematical terms, then, skimping on due diligence is explainable.

Still, imagine that for some reason the air crash statistics of individual airlines were not easily available, but for $2,000 every three years you could subscribe to a service that would tell you that Aeroflot crashes a lot more per mile travelled than Qantas.

Flying on Aeroflot is still safer than driving on July 4, but many of us would probably renew our subscriptions.

Any traveler challenged on paying this kind of money for such information would tell you, “I’m just doing my due diligence.”

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.

Every day now, we hear about the woes of readers unable to distinguish between “fake news” and real news, as if undependable news reporting is anything new. Readers and fact investigators have always needed to know how to figure out for themselves what to believe and what to question further.

Editor word built with wooden letters

I am proud to have been a journalist for nearly 20 years (The Wall Street Journal, International Herald Tribune, The Economist, NBC and others). Where I worked we always tried to get it right so that nobody could accuse us of putting out something “fake.” But that doesn’t mean we were always right.

As Charles Griffin Intelligence uncovers facts about people we use the media (traditional, electronic and social) as critical elements in building a picture of a person’s life, connections and tendencies. The same goes for reporting on companies that are the subject of our due diligence.

But if everything we needed was in a newspaper, our clients wouldn’t need us. This is not because newspapers try to get it wrong. For a few reasons, the news has always been a “first draft of history”:

  • Newspapers must publish whether they have all the facts nailed down or not. Except for their ads, print newspapers tend to be around the same size every day. That’s not because we have the same amount of interesting news each day but because newsprint costs money. Websites have infinite space but finite budgets to hire writers and editors. Journalists often go with what they know, leave out reporting about critical elements of a story they haven’t nailed down, and hope to be able to fill in the holes in the following days.
  • “Spinning” and outright lying aren’t new. They are as old as time. Good journalists are expected to write stories that quote powerful or knowledgeable people as saying X, when the journalists suspect that the truth is not X. Journalists can’t call those they quote liars without proof, but they still go with the stories. Sometimes they never get to prove that X is wrong. Sometimes, if they believe the truth is X, they don’t try to see if it isn’t.
  • Truth is harder to pin down than we would like. Lots of well accepted scientific “facts” turn out to be incorrect, even without the constraints of deadlines and having to depend on untrustworthy people. Samuel Arbesman’s excellent book, The Half Life of Facts demonstrated how many “facts” cited in scientific journals turn out to be contradicted a short time later.
  • Most importantly, a lot of “fake news” turns out to be founded on impressions and rumors that the writers have not had time to verify before “publishing,” which today can mean “Tweeting.” Some of the bad information of today would have been spiked by good editors, but today the writers and editors are often the same people, and first drafts get published moments after they are written.

The solution? The same things that good editors have done from time immemorial.

  1. Question the source of the story. Has anyone credible verified it? If there are many injured somewhere, can you see whether a police, fire or ambulance source confirms that? We used to need reporters to call the fire department, but today the officials from the fire department often put out statements on the web that anyone can check. Real news stories ought to have confirmations from officials in them.
  2. Is the statement by the official accurately reproduced? Sometimes those publishing items can put words into the mouths of officials to make a statement saying X appear to say Y. if it’s big news, look at the statement for yourself and decide if the reporter was being fair.
  3. If you see the story reported “all over the place,” is the source the same for all the of hits on Google? 18 entries quoting the same source is no more comforting than a single source. A one-source file at a wire service once supposedly provoked the famous cable from the desk back to the field: “You alarmingly alone on this.”
  4. If the story depends on public records, can you find the public record to see for yourself? If “court documents” indicate something, you should be able to see the court documents. If they are the basis of a story on line, they should be reproduced so that readers can judge for themselves whether the documents have been reported accurately.

All this verification is to combat what I like to call “paint by numbers” investigation. When you see a paint by numbers book, you have limited ability to question the “truth” of what you are seeing. You can change the colors in the book, but the forms and relationships in the picture are fixed.

Painting by numbers is for children. Adults should look at the picture a news story paints, break it down to its elements, and assess it all with as fresh an eye as possible.

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.

This blog may be one of the few publications in the Western world that has never written the word “Kardashian,” but that has now changed. In the stories about the robbery in Paris of Kim Kardashian we found numerous issues that touch on the work we do.Kardashian Paris Investigation

After my recent book The Art of Fact Investigation came out in May, a number of people wrote to me and suggested another chapter in the next edition about what people could do to maintain privacy in the face some who may want to dig up facts on them.

The easy advice for Kim Kardashian-West: if you are on social media a lot with information about valuable possessions and your whereabouts, criminals will easily learn about your valuable possessions and your whereabouts. Big rings on Instagram? Not a good idea. The super-secret apartment hotel in Paris? With paparazzi following you everywhere, how secret is any place you go?

The harder advice both to accept and to act on relates to some speculation in the media that the crime was an inside job, because the thieves knew that Kardashian’s security guard was not on duty that night.

When we let others into our homes and into our lives, there is always the chance that one of those people may feed information to the outside. This is why many people like a preliminary background check of the electrician or plumber they are about to admit into their home. They like a more thorough look at someone who will watch their children. But Kardashian-West isn’t just dealing with plumbers and babysitters.

How many photographs are there of her bringing home groceries, for example? She eats therefore food is delivered by people. When she buys something large, that too is delivered. It is unlikely that she drives her car to Jiffy Lube when it’s time for an oil change. People drive for her.

We have written before about the value of talking to workers who have been in someone’s home. Movers, gardeners, handymen – all get to know the home to an extent and the people who work there. If one of them becomes estranged because they are fired or are not paid, they have every incentive to talk about the person they used to serve.

We are not saying that Kardashian-West has been betrayed by any of her staff. Only that when police found out that the bodyguard was off duty that night, they surely wanted to know: who else knew that? And they would have started the questioning close to home.

 

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 your defense is that the law allows you to publish garbage without fear of prosecution, one takeaway is simple: the internet is filled with garbage that needs to be well verified before you rely on it.Internet searching

This blog thinks the Ninth Circuit got it right in exonerating Yelp this week from the lawsuit by a small business that was incorrectly identified in a negative Yelp ad. The decision is here.

While we feel terribly for the locksmith whose business was tarred with a brutally negative review that Yelp erroneously attached to his business, it seems clear that the court was right in deciding that Yelp was protected from prosecution by the federal Communications Decency Act.

The reasoning in Congress for this and other laws that grant safe harbor to internet facilitators of exchanges (of opinions, goods or anything else) is that if the internet sites were to be held liable for the contents of what they were portraying, the industry would shut down or need to charge a lot of money to compensate them for the risk.

As fact finders, we think the Yelp case is a handy example of why just about anything on line should be verified if you intend to make any kind of important decision based on what you read.

We recently had a case in which a negative review of a doctor became relevant in a malpractice case. Question one to us was: is this reviewer a real person and if so who is she? Based on her Yelp handle and city we managed to find her and to take a statement from her that turned out to be even more valuable than what she had posted on Yelp.

But what if “she” had turned out to be a competitor, an embittered but deranged former patient, or just a crank?

This is the not the first time we’ve written about this. In The Spokeo Lawsuit: Databases are Riddled with Errors we discussed a database that spits out some free information but then asks you to pay for more (often inaccurate) information.

As we tell our clients all the time (and as I’ve written in my book, The Art of Fact Investigation), even the most expensive databases confuse people with similar names, leave out key information such as where a person really lives or works, and are mostly hopeless with linking people and their shell companies.

The internet is a wonderful, useful and time-saving place, but there is no substitute for a good critical mind to sort investigative gold from the masses of garbage you find there.

 

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.

 

What lesson does the Brexit vote hold for anyone conducting or contemplating fact investigation?

Don’t let confirmation bias muddy your thinking.

One of the key “Investigator’s Enemies” identified in my book, The Art of Fact Investigation, confirmation bias is what many of us tend to do when looking into an issue: we find what we expect (or want) to find.

Avoiding Confirmation Bias
Avoiding Confirmation Bias

The big money in last week’s British referendum was in favor of remaining within the European Union. It wasn’t just that large banks, corporations and the people who work there supported “Remain,” but that these people bet more heavily on their preferred outcome than those betting on Brexit.

The result? Even though opinion polls consistently pegged the race as very close, bookmakers in the UK put the odds of a Brexit victory at as little as 10 percent, according to the Wall Street Journal.

How could this be? For the simple reason that bookies like to balance their bets. Even though all voters in the U.K. got evenly weighted votes, bookies don’t evenly weight all bets. If you want to bet $400,000 on Remain and someone else bets $100 on Brexit, the odds will go heavily toward the Remain camp – whatever the polls say.

That may be what happened last week. So much money went against Brexit that those making — or in sympathy — with that outcome started to believe the odds and not the opinion polls.

How would this kind of skewed thinking work in an investigation?

Since all the information we have gathered about Mr. Jones is that he is a “New York guy,” we will not spend serious time looking outside New York to see whether he may have a litigation history or any commercial presence outside the city. We then could miss the apartment he quietly bought for himself in Miami two years ago, along with the companies he runs out of that apartment.

With confirmation bias, we might dismiss the idea of a Florida base because if he had such a thing, someone would have found it by now.

As with Brexit, we would assume that all of the “smart money’ was on one outcome (Brexit/New York) that we expect we will find.

Instead, a little smart inquiring (perhaps a database search nationwide on Jones, or a look at bet sizes for Brexit) would make us more informed and less beholden to our prejudices.

All people hold some form of prejudice when they begin an investigation. You need to have some pre-existing idea of where to look, since you can never look everywhere for everything. What we aim for is the judicious balance between inspired guessing and submitting to confirmation bias.

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.

Due diligence is all about following up on red flags, but if you don’t find them, there’s nothing on which to follow up.

Thus, our tireless refrain: turn over every piece of public record information you can about a person, and don’t leave it to others.finra DUE DILIGENCE.jpg

We were reminded of this by the story this weekend in the Wall Street Journal, which found that the brokerage industry regulator, FINRA, leaves a lot of red flags concerning members off its BrokerCheck website. While it’s laudable that FINRA recommends that investors check to see if brokers have ever been subjected to disciplinary action, that check is of limited use if bankruptcies, state-level actions and litigation are left off of BrokerCheck.

We have been writing for years about the need to do thorough searches when conducting due diligence on anyone – pre-employment, pre-deal, or during litigation. In Avoiding Due Diligence Failure: Following Up on Red Flags, we dealt with the problem of the Semmelweis reflex in due diligence.

This is when you want to confirm that someone who is supposed to be squeaky clean really is, and so you write off what looks like a problem in his past to database error. You can also see confirmation bias, in which people rely too heavily on bad or incomplete evidence that leads them to their desired conclusion.

But, before you even get to battling Semmelweis and bias in mishandling red flags, you have to see the flags in the first place. For that, we provide a non-exhaustive checklist to our clients of the kinds of sources we will check. We wrote about it here.  

It’s critically important to note that these sources are not checked on line much of the time, but on site. That’s because a lot of information at the county or state level is not available on the internet. You need a good network of on-site retrievers to go pull it at the courthouse and send it back to you. You then need to double check to make sure your retriever didn’t miss anything. While not everything is on line, abstracts of some matters may be. When you get your pile of documents back, it’s always good to make sure that everything you found on line is represented in the results.

 

While clients who ought to know better frequently ask us to get banking and cell phone records, a request for a medical record is far more rare.facebook medical records.jpg

All three are illegal for us to obtain without a court order by federal statute in nearly any circumstance, as we’ve written about many times on the privacy section of this blog.

If your investigator says otherwise, have a look at HIPAA (42 USC 1320d), the Gramm Leach Bliley Act (15 USC 6821) and the Telephone Records and Privacy Protection Act (18 USC 1039) for starters. 

Maybe because we sign so many privacy forms every time we visit a doctor, it seems that everyone knows that medical records ought to stay private except when we explicitly release them to specialist doctors or insurance companies. HIPAA violations can get you serious jail time.

Now there is word that Facebook wants to get into the business of health information. The Reuters report is here.

We won’t go into what Facebook could do with your information, which is dealt with by Bradley Shear on his social media blog here. In summary, he thinks putting medical records on Facebook is a terrible idea, and we certainly wouldn’t do it. But others disagree.

Our point is that once something is on Facebook, it’s often more easily accessible by other people with access to Facebook. While we can’t ethically “friend” a person under false pretenses, people sometimes put things on the public portion of their Facebook account that’s available to any Facebook user.

Plus, interviews with anyone who is a friend of someone we’re looking at are fair game as long as they don’t violate the no-contact rule.  Hearsay evidence of someone’s medical condition probably won’t be admissible evidence, but sometimes admissibility isn’t the only objective in gathering information.

Just one more reason why any search on a person – for assets, for general information, for just about anything – must always include a social media profile.

We are as zealous as anyone in arguing for the legal protection of a person’s privacy. But if that person decides to climb up on an electronic soapbox and broadcast to us facts that could otherwise stay private, we will work within the law and the rules of professional responsibility to find those facts and report back to our client.

Something to think about before pressing “Share”.