Working Effectively With Private Investigators

WORKING EFFECTIVELY WITH PRIVATE INVESTIGATORS
by: Jim Cronin, CFE November 15, 2005

1. DO YOU REALLY NEED A PRIVATE INVESTIGATOR?

This may help identify and communicate what needs to be done:

a. THE DRILL DOWN:

1) WHAT ISSUE(S) ARE WE TRYING TO RESOLVE?

a) Ensure that the investigator has at least a general
understanding of the purpose of the assignment and the
intended use of the requested information.

2) WHAT INFORMATION WOULD HELP US RESOLVE THESE ISSUE(S)?

a) The more specific you are, the more likely you are to get
what you want.

3) HOW SHOULD WE GO ABOUT GETTING THIS INFORMATION?

a) Conference the matter with the investigator. Make him/her
a part of your team.

b) Consider allowing the investigator to make inputs as to

1> Possible leads:

a> Investigators may know of sources, methods and
techniques that the client may not be aware of.

b> Investigators are likely to be somewhat secretive
as to their sources.

1: Investigators may consider certain methods and
sources to be proprietary in nature.

2: Investigators can advise as to the feasibility
of the requested taskings.

b. IS A PRIVATE INVESTIGATOR THE BEST SOLUTION TO YOUR PROBLEM?

Other types of experts to consider:

a) Paralegal(s)

b) Forensic accountants

c) Medical records analysts

d) Independent insurance adjusters

e) Forensic document examiners
Working Effectively with Private Investigators
By Jim Cronin, CFE
Page 1 of 20

f) Forensic engineers

g) Forensic medical specialists

h) Polygraph examiners

i) Computer forensics specialists

j) Process servers

k) Repossession specialists

l) Professional photographers

1) Like attorneys, there are many generalists as well as highly
specialized types of private investigators. Some specialized
types of private investigators include:

a) Surveillance

b) Criminal defense

c) Insurance

1> Many investigators who advertise being insurance
investigators specialize in surveillance and actually
have very little knowledge of insurance.

2> There are investigators who have very specialized
knowledge of both insurance and investigation methods.

d) Death/medical negligence investigations

e) Covert electronic surveillance

f) Electronic countermeasures

g) Executive protection/risk assessment

h) Online research

i) Computer forensics

j) Electronic eavesdropping detection

k) Canine
1> Explosives/Accelerants
2> Drugs

l) Accident reconstruction

m) Fire origin & cause

n) Executive protection

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o) Financial investigations

p) Corporate investigations
1> Undercover investigations

q) Maritime investigations

r) Asset Investigations

2) WHAT CAN A PRIVATE INVESTIGATOR DO FOR YOU?

a) A word of caution here. While there are some generalists
out there, private investigators tend to specialize (just
as do attorneys). The investigator's qualifications must
be relevant to client's needs for the assignment at
hand.

b) Some of the sub-specialties of private investigation:

1> Surveillance

2> Criminal Defense

3> Insurance claims investigations

4> Death investigations

5> Electronic countermeasures

6> Executive protection

7> Online research

8> Corporate investigations

c) SOME SERVICES PRIVATE INVESTIGATORS CAN PROVIDE:

1> Interviews:

a> Many private investigators have law enforcement
backgrounds and are highly-trained and experienced
interviewers.

b> Investigators can provide insight into the
perceived veracity, character and education level
of a subject, as well as whether or not the subject
would be likely to be a favorable witness.

By Jim Cronin, CFE
Page 3 of 20

c> Having a private investigator conduct an interview
with a potential witness can often be protected as
attorney work product, not subject to discovery by
the adverse counsel. This can be beneficial if you
decide not to depose the person if that person's
account is less than helpful to your case. If the
witness's account is deemed to be helpful to your
case, an interview by an investigator will help to
quot;pin-downquot; the witness, and their prior statements
made to the investigator may be introduced as
inconsistent prior statements if their account
changes at deposition or trial time.

2> Background Investigations

a> Due diligence

b> Credibility Assessment

c> Witness impeachment

3> Public records checks

4> Accident investigation/scene photography

5> Asset Investigations

6> Criminal Defense Investigations

7> Environmental Investigations

8> Industrial Accident Investigations

9> Litigation Checks/Criminal Histories

a> Online
b> Onsite

10> Worker's Compensation Investigation

a> AOE-COE
b> Surveillance

11> Insurance Investigations:

a> Property:

1: Theft
2: Fire

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Page 4 of 20

b> Casualty:

1: Premises liability
2: Auto collision
3: Food contamination
4: Product liability

c> Worker's Compensation:

d> Life & Health

12> Locates:

a> Witnesses
b> Insureds
c> Heirs
d> Defendants

13> Difficult service of process

a> If Subject is:
1: Evasive
2: Difficult to locate

b> Short notice/impending statute toll date

14> Surveillance:

a> Specialized equipment needed

b> Technicians may or may not be highly trained
investigators.

c> Very wide variance of qualifications in this area

15> Corporate Investigations

a> Theft/conversion/misappropriation

b> Embezzlement

c> Workplace violence

d> Sexual harassment

e> Competitor intelligence

f> Undercover operations

g> Executive Protection

h> Pre-employment background (FCRA) investigations

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16> Data sources:

a> Specialized access to information is a major tool
of private investigators.

1: Public Information

a: Some are free
b: Most are fee-based

2: Proprietary Information

b> Not all investigators have access to the same
sources.

c> Not all sources are created equal. There are
significant differences in various sources:

1: Search engine power

2: Thoroughness of information

a: Truncation of SSN's vs. entire SSN's: Many
data providers now truncate the last four
digits of a Subject's social security number.
This can be a limiting factor for some
investigators.

3: Recency of information:

The frequency of updates can be critical, and it
varies widely among data providers.

4: Accuracy of information

5: Volume of information

6: Cost of information

7: Sources are often public, but are specialized by
state. Many require special contracts, deposits,
and monthly fees. Many systems use arcane
commands requiring specialized knowledge.

8: No single source has all the information.

9: Each data source is a quot;toolquot; in the
investigator's toolbox. Leveraging data from
many disparate sources is often the key to
finding the critical piece of the investigative
puzzle.

By Jim Cronin, CFE
Page 6 of 20

2. FINDING A PRIVATE INVESTIGATOR:

a. Referrals/recommendations from fellow attorneys
1) Best single source

b. Recommendations from known private investigators

c. Professional associations

1) Examples:

a) PNAI (Pacific Northwest Association of Investigators)

b) WALI (Washington Association of Legal Investigators)

c) OALI (Oregon Association of Licensed Investigators)
d) CALI (California Association of Licensed Investigators)

e) ASIS (American Association of Industrial Security)

f) ACFE (Association of Certified Fraud Examiners)

2) Benefits:

a) Contacts with peers in other locations

b) Contacts with specialists

c) Professional ethics enforcement

d. Washington Department of Licensing Professional License
Database:

1) https://fortress.wa.gov/dol/dolprod/profquery/

2) Search by:

a) Individual name
b) Firm name
c) License type
d) UBI
e) City
f) County

By Jim Cronin, CFE
Page 7 of 20

3. SELECTING A PRIVATE INVESTIGATOR:

a. THINGS TO CONSIDER IN CHOOSING A PRIVATE INVESTIGATOR:

1) Investigators and attorneys have something in common. They
all think they're the best at what they do. Therefore,
quot;caveat emptor.quot;

2) Getting the right investigator for your specific needs:

a) Choosing the wrong investigator is an invitation for
disaster.

b) Private investigators (just like attorneys) come in a
wide range of types and qualifications. Private
investigators range from security guard rejects to former
FBI Agents and everything in between.

c) Qualifications to become a private investigator in
Washington: (RCW 18.165.030 et seq.)

1> Be at least 18 years of age;

2> Be a citizen or resident alien of United States;

3> Not have been convicted of a crime in any
jurisdiction, if the director determines that the
applicant's particular crime directly relates to his
or her capacity to perform the duties of a private
investigator..

4> Be employed by or have an employment offer from a
private investigator agency or be licensed as a
private investigator agency;

5> Submit a set of fingerprints;

6> Pay the required non-refundable fee for each
application;

7> Submit a fully completed application that includes
proper identification on a form prescribed by the
director..

8> Pass an examination determined by the director to
measure the person's knowledge and competence in the
private investigator agency business...

By Jim Cronin, CFE
Page 8 of 20

d) PITFALLS:

1> Respondeat Superior: (Latin for quot;let the master
answerquot;), a key doctrine in the law of agency, which
provides that a principal (employer) is responsible
for the actions of his/her/its agent (employee) in the
quot;course of employment.quot;

2> Potential torts include:

a> Intentional infliction of Emotional Distress

b> Slander

c> Libel

d> Trespass

e> Invasion of Privacy

f> Tortuous Interference With Business

g> False Imprisonment

h> Malicious Prosecution

i> Lack of due diligence in performance of duties

3> Lack of expertise:

a> Accepting a specialized assignment for which the
investigator is not qualified.

3) Most private investigator's are either:

a) solo practitioners

b) small firms

4) Therefore, it is often a good idea to have a good working
relationship with more than one private investigator.

5) Feast and Famine:

a) Since most private investigators are one or two person
organizations, it is important to determine if the
investigator will be able to perform the work
satisfactorily within the client's time constraints.
Possible limiting factors include:

1> workload
2> vacations
3> family matters
4> medical matters
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Page 9 of 20

b) A good investigator will either decline an assignment or
subcontract the work if he/she knows that they will not
be able to produce the needed result in the time/budget
available.

6) Armed vs. Unarmed:

a) Liability Issues:

1> Most private investigators are not licensed to carry
firearms. There is no need to be armed in most cases.
A good investigator will steer clear of dangerous
situations whenever possible. Most savvy clients will
insist that their investigators not be armed for the
overwhelming majority of investigating assignments.
This is done to limit potential liability.

Instances where it may be appropriate to used an armed
investigator include an executive protection detail or
a workplace violence prevention assignment.

b. ISSUES TO DISCUSS WITH AND DOCUMENTS TO OBTAIN FROM THE PRIVATE
INVESTIGATOR :

1) QUALIFICATIONS:

a) Areas of specialization:

1> Most private investigators specialize.

a> Beware of private investigator's who advertise that
they quot;do everything.quot;

b) Experience:

1> Ask the investigator questions regarding the specific
type(s) of investigative assignments:

a> How many of these have you done in the past year?

b> Ask for redacted samples of reports of similar
nature to assignment you will be giving him/her.
Ask for several different reports.

1: This will help confirm whether or not the
investigator has skills relative to the type of
assignment you need him/her for.

2: By asking for multiple reports, you can see if
the investigator uses quot;cannedquot; reports or if
he/she has writing and investigative skills
commensurate with your needs.

By Jim Cronin, CFE
Page 10 of 20

2) CREDENTIALS AND LICENSURE:

a) Professional Liability Insurance Certificate:

1> Washington law does not require private investigators
to be insured! At a minimum, private investigative
agencies in Washington are only required to maintain a
$10,000 bond. This provides an extremely limited
amount of coverage.

a> Source: RCW 18.165.100

2> One-third of Washington private investigators are NOT
insured. Of 444 active private investigator Agencies
in Washington, 121 of them are bonded, but are NOT
insured! (Source: Ms. Pat Brown, Administrator,

Washington DOL Public Protection Unit, telephone (360)
664-6608, as of October 25, 2005)

3> Insurance vs. Bonding

a> Even if your private investigator is legally quot;fully
insured,quot; the investigator/agency (and his/her
client in turn) may be under-insured. This is
because in order to be legally quot;insuredquot; (in lieu
of bond) Washington law only requires:

1: $25K bodily or personal injury coverage
/ and
2: $25K property damage coverage

This is still relatively moderate coverage
considering the potential exposures.

b> Professional private investigators carry at least
$1M per occurrence professional liability
insurance. This protects the investigator and
(in-turn) his/her client(s).

c> The attorney should request the private
investigator to have their broker forward a copy of
the certificate of professional liability insurance
coverages directly to them. Ensuring that an
investigator is fully insured may well be the most
important factor in selecting an
investigator/agency. If the investigator is
insured, he/she will almost certainly be properly
licensed.

By Jim Cronin, CFE
Page 11 of 20

d> Not all professional liability insurance is created
equal! quot;Claims Madequot; versus quot;Per Occurrencequot;
Coverage:

1: Attorneys should ensure that their private
investigator's professional liability insurance
coverage is quot;per occurrencequot; versus quot;claims
made.quot;

2: quot;Per occurrencequot; covers insured perils up to the
statute toll date for the tort.

3: quot;Claims madequot; coverage only covers those claims
actually made during the policy period. Claims
made after the policy period has expired are not
covered.

quot;Claims madequot; coverage severely limits the time
during which a claim may be made against the
investigator's professional liability policy. By
the time an alleged tort is discovered,
investigated and action brought, there may be no
coverage, leaving the attorney and client(s)
exposed and liable.

Attorneys should always ensure that any private
investigator who does work for him/her carries
quot;Per occurrencequot; professional liability
insurance of at least $1 million per occurrence.

b) Curriculum vitae:

The attorney should consider the relevancy of an
investigator's qualifications to the assignment at hand.
The c.v. should include:

1> Professional training completed

2> Professional experience

3> Presentations given

4> Articles authored

5> Professional associations

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Page 12 of 20

6> Professional Designations/Certifications:

a> Not all designations are equal. Some private
investigators use designations which are next to
meaningless. Some of the better professional
designations include:

1: JD (Juris Doctorate)

2: CFE (Certified Fraud Examiner)

3: CIFI (Certified Insurance Fraud Investigator)

4: CPP (Certified Protection Professional)

5: CFI (Certified Fire Investigator)

6: CLI (Certified Legal Investigator)

b> Clients should consider asking for copies of
relevant professional certification certificates to
ensure that they are:

1: Actually issued
2: Current

c) Licensure:

Be sure to have the investigator send you a copy of all
his licenses. Check:

1> How long has the investigator/agency been licensed?

2> Currency?

3> Type?

4> Check Washington DOL site

a> https://fortress.wa.gov/dol/dolprod/profquery/

5> Consider calling the Washington DOL to determine if
there have been any complaints regarding the
investigator and the outcome/resolution of those
complaints. Has any disciplinary action been taken?

6> Jurisdiction(s)

a> Note that Oregon law does not permit a private
investigator licensed only in Washington to enter
Oregon to investigate. Washington law allows
private investigators licensed in Oregon to enter
Washington to conduct investigations for up to 30
days per year. (RCW 18.165.120)
By Jim Cronin, CFE
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d) References:

1> A potential client may wish to ask a private
investigator for names of other attorneys for whom
he/she has done work in the recent past. Trust but
verify!

e) Web site?

1> A web site may provide a potential client with insight
as to the investigators experience, clientele and
specialties.

2> Beware of investigators whose web sites: (RCW
18.165.080)

a> Do not identify the licensees/principals of the
business

b> Do not show the address of record of the business

c> Do not list the license number(s) under which they
operate

3> Also beware of investigator's web sites that:

a> Belie a lack of substance or exaggerate their
capabilities

b> List quot;cheating spouse investigationsquot; or quot;lost
love locatesquot; as specialties

f) Expert Witness?

1> If the assignment is likely to involve the
investigator being deposed and/or testifying in court,
ask the investigator if he/she has ever been certified
as an expert witness.

a> When?
b> How many times?
c> Where?
d> What subject matter?
e> Client(s)?
f> Specifics..

By Jim Cronin, CFE
Page 14 of 20

3) TERMS OF SERVICE:

a) Rates:

1> Hourly

2> mileage fees

b) Contract:

1> Contracts protect both the client and the
investigator.

2> Many investigators do not require them.

c) Retainer/deposit vs. Billing:

1> This is an area subject to negotiation between the
parties.

c. INVESTIGATING THE INVESTIGATOR:

1) Reputation:

a) Check with fellow attorneys regarding the reliability,
veracity, cost, timeliness and quality of the
investigator and his/her work.

2) Litigation:

a) Both Superior and District/Muni Courts

b) Is the investigator a named defendant in any professional
liability cases?

3) News Scan:

a) Online through public library site, full text searches of
Washington newspapers are available for free. Library
card required.

4) Search Engine: (Google etc)
a) By name
b) By telephone number

By Jim Cronin, CFE
Page 15 of 20

4. THE ASSIGNMENT:

The following are issues that will need to be addressed in each
assignment to a private investigator:

a. CONFLICT OF INTEREST CHECK!

1) Should be at beginning of assignment discussion. Describe
the extant matter briefly and name the relevant involved
parties.

2) Ask the investigator if the assignment would pose any
conflict of interest before divulging any sensitive
information.

b. EXPECTATIONS:

1) Letter of Engagement/Assignment:

a) Successful business relationships depend on all parties
understanding, agreeing upon and meeting each other's
expectations. Document them up front. These may be
documented by either party, and may be by letter or
email, but should be agreed upon by both in writing
before work begins.

1> WHO

a> Who will actually be doing the work?

1: The agency principal, an employee, or a
subcontractor?

2> WHAT

a> What is to be done?

3> WHEN

a> Is the assignment to be started/completed?

b> quot;Benchmarks/milestones/deadlines:quot;

1: Periodic reporting and

2: Evaluation of status/progress

c> Periodic Reality Checks: The client must
periodically evaluate the focus, scope and need for
the investigation and the performance of the
investigator.

1: Make changes as needed.

2: Don't wait until it's too late!
By Jim Cronin, CFE
Page 16 of 20

4> HOW

a> What general methods will be used to secure the
needed information?

5> HOW MUCH

a> What are the investigator's rates:

1: Are they commensurate with his/her training,
experience and expertise?

b) WHAT DO YOU NOT WANT DONE?

1> Spelling out what is not to be done can avoid
duplication of effort, embarrassing mistakes etc.

c) HOW IS IT TO BE DONE?

1> This is an area where the private investigator can
help

d) WHEN DOES IT NEED TO BE DONE BY?

1> Allow yourself some quot;wigglequot; time.

2> Set a diary and follow-up, BEFORE your quot;drop deadquot;
date.

c. TIMING:

1) Once you know that you're going to need to retain an
investigator. Don't wait until time is critical to make the
assignment!

a) Investigators have other cases and other clients too!

b) quot;Rushquot; jobs often cost more and have poorer outcomes.

d. THINGS TO TELL THE PRIVATE INVESTIGATOR:

1) If previous unsuccessful attempts have been made to secure
the information, provide this information (and related
documentation) to the investigator. It may help the
investigator to know exactly what has already been done so
that he/she can benefit from it, and will not be forced to
repeat the same unsuccessful attempts.

2) Sometimes the answer to your problem/question is already in
your file, but was overlooked! A fresh review by an
investigator may reveal unrecognized information relevant to
your case.

By Jim Cronin, CFE
Page 17 of 20

3) Fair Credit Reporting Act/Gramm-Leach-Bliley Act/Driver's
Privacy Protection Act permissible purposes for obtaining
the requested information

4) Provide the subject's SSN to the investigator if relevant
and available:

a) This can be difficult for some private investigator's to
obtain.

b) Having the SSN can help facilitate searching for people
and documents.

e. REPORTING INSTRUCTIONS:

1) To whom to report:

a) Privileged Attorney Work Product

1> Keeping the privileged status:

a> Release to and/or coordination with third parties
by the investigator could jeopardize the privileged
status of the report(s), and make them subject to
discovery.

2) Report Timing:

a) Initial Report - When due

b) Updates/Supplemental Reports - Frequency

3) Format:

The attorney and investigator should have an understanding
and agreement regarding the desired formats for reporting:

a) Verbal:

1> In person
2> Telephone

b) Written:

1> Email
2> Mail
3> Fax

c) Photographs:

1> 35 mm and/or
2> Digital

By Jim Cronin, CFE
Page 18 of 20

d) Video

1> Analog or
2> Digital

e) Marking:

1> quot;Attorney Work Product/Privileged and Confidentialquot;

f) Source documents

1> Forward or retain?
2> Regular or certified copies?

f. COSTS:

1) HOW MUCH IS BUDGETED FOR THIS ASSIGNMENT?

a) Budget Cap

1> May need to be re-evaluated
2> Helps control costs while providing value for money

b) Billing Format:

1> Billing should include a detailed accounting of
services provided during billed time in tenths of an
hour. May include a chronological time log

2> Copies of receipts for out of pocket expenses should
be provided.

c) Payment Expectations:

1> Just as attorneys want investigator's service to be
rendered in a quality and timely fashion,
investigators want to be paid on time.

2> The attorney should tell the investigator:

a> Who will actually be paying the invoice.

1: If the attorney will be tendering payment to a
third party, this should be understood by both
parties in advance.

2: Tendering a bill to a third party does not
relieve the client of responsibility for
ensuring that the investigator is paid in a
timely fashion.

By Jim Cronin, CFE
Page 19 of 20

b> How long it will take for payment to be issued.

1: Dilatory clients soon become known within the
investigative community.

3> The attorney should ensure the investigator submits
IRS Form W-9, Request for Taxpayer Identification and
Certification. This is needed for tax purposes.

4> If there is a question or dispute regarding the
billing, address it right away, while it is fresh in
everyone's mind.

a> If agreed expectations have not been met, an
adjustment may be in order. A good investigator
will do this on his/her own. If not, ask for it if
appropriate.

b> Remember, however, that the client is paying for
the agreed services, not the outcome.

5> A good investigator who wants repeat business will
attempt to provide the most value for cost. A good
attorney who wants assistance from an investigator
again in the future will attempt to ensure that the
investigator is paid fairly and promptly.

Jim Cronin, CFE, MPA
Cronin & Associates
Specialized Investigations

P.O. Box 1327
Mukilteo, WA 98275

EMAIL: croninj@ix.netcom.com
WEB SITE: http://www.cronin-and-associates.4t.com

Office: (206) 992-1555

Mr. Cronin is the principal of Cronin & Associates, a Seattle-area private investigation
agency specializing in insurance claims investigation and litigation support. Mr. Cronin
has 35 years of investigative experience, with 14 years specialization in insurance fraud
investigation and litigation support. He holds a Master’s Degree in Public
Administration, and has been a Certified Fraud Examiner since 1992. Mr. Cronin is a
nationally-recognized expert in online investigative information. His investigative work
has been featured in many regional and national news and trade sources. Mr. Cronin
was the 2004 President of the Pacific Northwest Association of Investigators.
By Jim Cronin, CFE
Page 20 of 20

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