Spy Before You Buy

It happened again. A client calls to say that a man who bought his business has ripped him off for $100,000. The sad part is that for about $250, I confirmed that the client never should have gone near him with a 10-foot stick let alone put scads of cash at risk.

The buyer approached the client, a bar owner, with a seemingly impressive list of businesses he had owned, several references, etc. The buyer had also been in the bar business for years and said all the right things. A tentative deal was made but the buyer helped himself to a lot of cash, a credit card and failed to pay many employees.

The buyer had concealed a personal and business bankruptcy from 2004, really not that long ago. He did it by: not providing a true SSN, lying that his past business simply closed because the lease ended, using a variation of his name and providing a bogus name for his wife.

It reminds me of another case, where an attorney hired me after his client had been scammed for several hundred thousand in an investment/loan deal with an “artist.” The problem? The artist was an outright fraud. A relatively quick and easy search of San Francisco County Superior Court and some other public records on Black Book Online would have revealed about five other past fraud suits against the scalawag. (One of my fave details was that the “artist” liked to rock an ascot. What, no eyepatch?)

Back to the bogus bar buyer. The first step in checking the guy out was coming up with his past address history based on a known or given address. That database search yielded variations on his first name that I had not initially checked. It also showed the true name of his wife. Once I had his variation and his wife’s true name, I could then run them both through the excellent federal records pacer system. I learned that they had no real assets. (Searching for bank accounts is a whole other deal to be covered in another entry some day.) I could then check the names and addresses in the court papers against the addresses in databases.

It’s hard to go through life paranoid. You don’t have to. The Spencer rule of thumb: If a deal is worth more than $1,500 or $2,000 spend a little on a professional private investigator and check it out.