This is the story of how a check for $13.54, identified during a financial forensic analysis, resulted in a judg- ment award recovery of $283,500.
Read on, you will not be disappointed.
Once a judgment is awarded, the enforcement and collection of the amount due are
left in the hands of the creditor. In the
event a debtor is unwilling to make payment arrangements or fails to pay a monetary judgment, the creditor or their attorney
may seek payment through identification
of debtor assets that can be attached or levied for purposes of satisfying the judgment.
Enter the judgment at the center of
this story. A district court judge awarded
a $283,500 judgment in a civil lawsuit involving an insurance company and a small
construction company and its sole owner.
In terms of documentation, the insurance
company had nothing but copies of canceled checks showing their collection efforts.
The insurance company and their attorney engaged a financial forensic expert to
assist in locating assets owned by the judgment debtor.
Subpoena: Judgment Debtor’s
In this case, the financial forensic expert
provided a list of potentially relevant documentation to the insurance company’s attorney, which was used to subpoena the
judgment debtor’s financial records.
The attorney also subpoenaed copies of
the judgment debtor’s bank statements including offsets, such as front and back copies of canceled checks, credit/debit memos,
and other financial documents for the past
The Tiny Clue: A $13.54 Check
Based on the provided bank records, a recurring small dollar check was issued by
the judgment debtor on a monthly basis for
$13.54 made payable to a utility company.
This transaction was curious for two reasons: 1) The amount was small compared
to the judgment debtor’s identified business and personal utility expenses; and 2)
The identified utility company was located
three states away from the construction
company and the judgment debtor’s personal residence.
The Plot Thickens…
Further analysis revealed that the address
of the subject property was located on a
rural mailing route with no street address.
A call to the tax assessor’s office revealed
the legal description of the subject property, the name of the taxpayer, as well as
the billing address. The county clerk and
recorder’s office were contacted and a request was issued for a copy of the deed for
the subject property. Once received, the
property deed confirmed that the subject
property consisted of 460 acres of land and
a barn in a rural area, but no home.
But Wait, There’s More
The rural route postman was contacted. The
postman stated the property was used to
raise cattle, AND had several oil wells. Aha…
Next, the county livestock auction barn
was contacted, and the name and phone
number of the area Brand Inspector was
obtained. The Brand Inspector was responsible for inspecting all livestock bought
and sold in the county. This individual represented that the herd of “Black Angus”
cattle being raised on the subject property
belonged to the judgment debtor. The inspector provided documentation in support
of his representation. Hmmm….
Light Bulb Moment
Research was then conducted of the oil and
gas commission. The oil and gas representative provided the name and address of
the oil company, as well as the production
records for the judgment debtor’s property.
A subpoena to the oil and gas commission resulted in the disclosure of copies of
all the checks issued for tax purposes by
the judgment debtor. Based on the analysis, it was determined that the aforementioned $13.54 check paid by the judgment
debtor was for the electrical bill for the
single light bulb hanging in the old barn
on the subject property. Further research
revealed that the judgment debtor’s property was free of any debts. Is it too much to
say the ‘light bulb’ came on about this
The Moment of Truth
The judgment debtor’s attorney was pro-
vided this new information, and was deli-
cately asked if his client, the judgment
debtor, would prefer to pay the judgment
with the oil and gas money, the sale of
livestock, or the real estate. His choice.
Or, the insurance company would seek
a court order for purposes of liquidating
the identified assets in order to satisfy
the judgment. No surprise here: The judg-
ment debtor immediately provided the
full payment of $283,500.
Moral of this story? No check is too small,
no detail too insignificant, to be overlooked
in a forensic financial investigation.
Attorneys and their clients should seek
out a financial forensic expert with the
knowledge, skills, training, and experience
necessary to locate assets to help ensure
the probability of collecting an outstand-
ing judgment – even when the clue is a
single lightbulb in a barn.
How a $13.54 Check Led to Collecting
a $283,500 Judgment Award
DAVID SUTHERLAND, CPA/CFF, CFE, CLEA
EPPS FORENSIC CONSULTING PLLC
Dave specializes in financial investigations, forensic accounting, litigation
support, fraud examination, and law enforcement consulting services.
He also teaches Financial Forensics in Law Enforcement (FFLE®).
13880 N. Northsight Blvd., Suite 115, Scottsdale, AZ 85260
Successful collection of a judgment from a reluctant debtor may lie
in the smallest – and most unexpected – detail.