PROBLEM:

There is reason to suspect that the debtor has closed his financial accounts and transferred most of his assets to cash, minimizing his paper trail. Proving he’s worth more than he says he is has become a major challenge.

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SOLUTION:

Anyone eager to avoid a paper trail will use cash. Many debtors will take money out of their bank accounts in small sums over a length of time, so as not to attract suspicion.  To track down that money, investigators scrutinize living expenses. Do the debtor’s expenses surpass the amount of money he appears to have in the bank? Does he appear to be paying for regular expenses via check or credit, or is there evidence that those transactions are handled in cash? How is he paying the mortgage or rent? What about car payments? And what about living expenses including food or utilities?

One of the other tell-tale signs that a debtor is relying on cash is evidence of significant purchases unaccounted for in his financial record.  This could include real estate, vehicles like cars or boats, large pieces of furniture, as well as art, jewelry and antiques. Usually large purchases require financing, and loans or credit leave a paper trail. If the debtor’s financial record suggests that such purchases went through other channels, then it’s possible he has a pool of cash he’s using for large transactions.

Other evidence of large cash reserves may be more indirect. People who traffic in cash usually invest in additional security to protect themselves from theft. Any expenses along these lines should raise a red flag. Things to look for include purchasing a safe, installing high-tech surveillance equipment, or hiring security personnel. Some debtors would rather avoid having their money at home or at work. In these cases, they might rent a safety deposit box to store their money. We can follow them when they go to visit their cash.

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