xxii Basic Private Investigation 7. Developing a Niche Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91 James P. Carino 8. Professionalism and Ethics—Waling in the Minefield . . . . . . . . . . . 102 William F. Blake 9. Financial Dispute Prevention and Resolution . . . . . . . . . . . . . . . . 111 William F. Blake PART II BASIC INVESTIGATIVE SKILLS 10. Interviews, Interpreters, and Statements . . . . . . . . . . . . . . . . . . . . 133 William F. Blake 11. Producing a Professional Report . . . . . . . . . . . . . . . . . . . . . . . . . . . 149 William F. Blake 12. Conducting Investigations in China . . . . . . . . . . . . . . . . . . . . . . . . 159 Jack Chu 13. A Few Words About Investigations in Europe . . . . . . . . . . . . . . . . 167 Mary Clark Fischer 14. Professional Private Investigators in the Civil Justice System . . . . 176 Warren J. Sonne 15. The Complexities of International Investigations . . . . . . . . . . . . . 206 William F. Blake 16. Conducting Investigations in Japan . . . . . . . . . . . . . . . . . . . . . . . . 210 Frederick H. Coward, Jr. 17. Investigator Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 219 Reginald J. Montgomery 18. Foot and Vehicle Surveillance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 226 Andrew C. “Skip” Albright Contents xxiii 19. Effective Surveillance Techniques . . . . . . . . . . . . . . . . . . . . . . . . . . 269 Christopher Finley 20. Employing a Competent Subcontractor . . . . . . . . . . . . . . . . . . . . . 283 William F. Blake Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 291 BASIC PRIVATE INVESTIGATION Part I BUSINESS ORGANIZATION AND MANAGEMENT Chapter 1 PRIVATE INVESTIGATION AS A SECOND CAREER WILLIAM F. BLAKE I ndividuals entering the private investigation career field come from many different backgrounds. The vast majority come from law en - forcement agencies within the federal and local governments as well as the military services. In recent years, many have come directly into the private investigation market from colleges and universities where they have received degrees in criminal justice, forensic science, or related fields. The influx from the college environment has been great- ly influenced by the proliferation of forensic science and investigative television shows. Each of these groups has unique advantages and dis- advantages. Experienced investigators, frequently retirees entering a second ca - reer either for additional financial resources or for the love of the busi- ness, normally have many years of investigative experience. Depend - ing on the organization from which they retired, they may not have the appropriate management skills for business success. During their career prior to retirement, the organization with which they were em - ployed had a support staff to take care of all of the noninvestigative matters, such as financial administration, supply acquisition and per- sonnel management. Retirees desiring to be business owners must acquire these skills to be successful. Newcomers from the academic environment may have developed some theoretical skills but lack practical application of these skills. Many of these individuals have been exposed to the latest information 5 and techniques—these they can share with their associates. Some may have been exposed to business subjects while in college but again they lack practical experience in business and personnel management. The world of private investigation is unlike public law enforcement or corporate investigations. The public law enforcement investigator primarily deals strictly with violation of criminal laws. The corporate investigator may investigate some criminal acts occurring with the cor- porate environment but may also be involved with inquiries into vio- lation of corporate policies not resulting in criminal acts. The corpo- rate investigator may also be involved in litigation actions for the in- house or outside counsel. The private investigator may be involved in criminal investigations, corporate internal investigations, and litigation support. The private in vestigator probably does not have the financial and investigative sup port resources of the public agency or corporation. This will cause the private investigator to depend frequently on business associates in areas where the investigator does not have appropriate skills. The philosophies of private investigation and law enforcement are different but also interrelated. Law enforcement investigators are pri- marily oriented to identifying someone who may have committed a criminal violation. They normally do not look into the cause of the problem or identify measures and strategies to prevent recurrence. The goal of criminal action is to punish or rehabilitate depending on the court philosophy. Restitution is not normally a viable goal. A court may order restitution, but there is little reasonable chance of recovery because of the defendant’s prison term and inability to repay. The goal of the private investigator is multipurposed. It includes identifying the individual responsible for a criminal act or violation of corporate policies. It also includes identifying what precipitated the problem and what strategies can be employed to prevent recurrence. The corporate client will normally be concerned with public relations problems and a desire to recoup financial losses rather than initiate criminal action. Private investigators are frequently tasked to provide investigative and litigation support in legal matters affecting their employer or client. There are several major differences between private and public sec- tor investigations. In the public sector there is normally a formalized rank reporting structure, with the role of the investigator defined in a 6 Basic Private Investigation bureaucratic manner with strict supervision. In this environment there is normally no maximum cost restriction placed on investigative effort. The goal is the solution of the problem and the identification of the re - sponsible party. No one ever told a law enforcement investigator that he or she must solve a serious crime within a strict budget. In the private sector, the investigator may be subordinate to an ex - ecutive who has little or no investigative knowledge. These executive positions may range from chief executive officer to human re sources (HR) manager or director of maintenance. This type of organization requires an education and training process for the investigator to achieve appropriate corporate objectives. In the corporate or private environment, cost is always a factor and the bottom line is the only goal. The corporate goal is normally recovery of loss and not referring a matter to law enforcement with the resultant public relations issues. In simple terms, the law enforcement agent operates in a reactive mode and the private investigator is expected to be proactive. There may be a problem with changing investigative philosophies and actions. The role of the private investigator in the corporate environment is varied. In addition to the investigation of criminal acts and internal problems, the investigator may become involved in conducting back- ground investigations for executive and sensitive positions as well as conducting due diligence inquires on corporate business associates and vendors. Another role of the private investigator may be that of executive protection for at-risk individuals. This includes planning, management of, and performance of activities to protect individuals while at home, in the office, or traveling. This activity requires an awareness of risk as - sessment strategies and interaction with law enforcement in the United States and international venues. The myriad business possibilities for the private investigator are only limited by the desire to expand business horizons. It is impossi- ble to be an expert in every possible area of private investigation. It is necessary to identify a few areas for concentration of effort where the investigator has special expertise. Expertise in other investigative areas can be developed through association with other investigators with the necessary skills. An offshoot of the investigative association process is the ability to say “I can do it” to any client request. This allows the investigator to Private Investigation as a Second Career 7 8 Basic Private Investigation subcontract work to another investigator and still receive a manage- ment fee for controlling the investigation. It also increases the proba- bility that your client will request additional work from you instead of going to someone else recommended for lack of expertise. There are numerous desirable skills that the investigator should have to be successful as a businessperson and to increase investigative knowledge. Initial exposure to these skill sets mandates that investiga- tors remain knowledgeable of new trends and concepts. These desir- able skill sets include accounting, business management, criminal and civil law, interpersonal relations, psychology, written and oral com- munications, computer and information management, investigative techniques, HR, fire and life safety, and professional certifications. The attainment and maintenance of professional certifications is a vital marketing tool. These professional designations, as long as they have a continuing education requirement, demonstrate that the inves- tigator is keeping up with current information and trends. Professional designations with minimal requirements and lacking a requirement for continuing education are primarily an income-generating process with little professional value. Starting a private investigation business requires a comprehensive inspection of numerous personal and business skills. The actual pro - cess of starting a business will be discussed in more detail in Chapter 2. Some initial considerations include providing answers to the fol- lowing questions: 1. What are the future opportunities? Can you provide a significant service with an adequate market potential? 2. What is the level of your computer literacy? How competent are you with various business-oriented programs, such as account- ing, word processing, database use, and contact management? 3. Is there a willingness to develop a business niche and become an expert in this area? Is there a willingness to avoid a “shotgun” ap proach to providing business services? 4. Is there a willingness to self-promote and sell investigative ser- vices? Can your services be marketed without being labeled as obfuscation? 5. Are you a motivated self-starter? You get what you work for. There will be no one to provide incentive or motivation. [...]... identify regional and national firms that conduct business in your geographical area of interest The large national and regional firms normally have contracts with a national business because of the perceived value of having one firm to handle all matters within the corporation The same theory holds true for governmental contracts and organizations 14 Basic Private Investigation WHAT ARE THE INDUSTRY... perpetual existence, and the ability to be totally owned by a single individual that one gets with a corporation, although in many states, sole proprietors can form LLCs Another disadvantage is that forming an LLC is more expensive than a partnership or a sole proprietorship is You have to draft articles of organization and file them with your state to get LLC status, and—in addition to the paperwork—this... What works for one person may not be the best advice for another person to follow SHOULD I DEVELOP A FORMAL BUSINESS PLAN? Formal business plan software is readily available and a wise investment Using a business plan software program such as Planwrite© Business Plan Writer© Deluxe facilitates the compilation of information to develop a plan for your business future A formal business plan is normally... this organization is actually one to be concerned with as a business competitor Another area of concern is the geographical area of interest for your competitors How does this geographical area overlap with the area in which you would like to concentrate? Do you have the resources, either as part of your business or through associates, to compete in this geographical area? It is also important to identify... along to my children at a later date 5 What are my personal goals? I want to make enough money each year so my wife and I can take a month’s vacation and travel to other parts of the world 6 How much do I want to work? I want to work no more than thirty hours per week and never work on weekends or holidays 7 How much money do I need to make per year? I need to make a sufficient monetary profit each year... these areas? 9 Do you have the necessary skills to publish marketing material for your business? Are you willing to be a public speaker as a marketing tool? Publishing and public speaking are the best marketing tools available Do not “preach to the choir”—get exposure to potential client groups 10 Are you willing to put in the effort of developing a business plan? A business plan is essential to identify... major disadvantage is that the members of a general partnership are fully liable for the debts and obligations of the partnership If the company is sued, then each partner will have to pay the damages and attorney’s fees If the damages are steep, you lose your shirt and your house! A limited partnership is similar to a general partnership except that the limited partners are only liable for what they... for a DBA, you must contact your Secretary of State’s office, and there is a small fee 20 Basic Private Investigation Subchapter S Corporation A Subchapter S Corporation is a corporation that has elected a special tax status with the Internal Revenue Service (IRS) The main advantage associated with the S corporation is that the income passes through to the shareholders, thus avoiding the double taxation... incorporated The laws of each state vary, some more favorable than others Federal law under the Securities Act of 1933 regulates how corporate securities (stocks, bonds, etc.) are issued and sold A corporation creates an “artificial person” or entity that can sue or be sued, enter into contracts, and perform other duties necessary to maintain a business The major advantage of a corporation is that the entity shields... great deal about LLCs and probably see that many of businesses are using this legal structure with good reason LLCs have the advantages of a corporation and of a sole proprietorship and a partnership rolled into one Many small business owners and entrepreneurs prefer LLCs because they combine the limited liability protection of a corporation and the pass through taxation of a sole proprietorship or partnership . financial crimes. 4. What are my business goals? I want to have a successful business that I can pass along to my children at a later date. 5. What are my personal goals? I want to make enough money each year so. 2 91 BASIC PRIVATE INVESTIGATION Part I BUSINESS ORGANIZATION AND MANAGEMENT Chapter 1 PRIVATE INVESTIGATION AS A SECOND CAREER WILLIAM F. BLAKE I ndividuals entering the private investigation. corporations, and cooperatives. 2 LEGAL STRUCTURE OVERVIEW Corporation Each legal structure has advantages and disadvantages. Basically, a corporation is a legal entity. It is created under the laws