Five questions to ask your private investigator

Tom Cruise is being sued for $5 million dollars because he hired the wrong private investigator (PI). According to court documents, published by Radaronline, Cruise is being sued by Michael David Sapir, a magazine editor, who believes Cruise hired Anthony Pellicano to illegally wiretap his phone. Pellicano, a former high-profile Los Angeles private investigator, is currently serving a 15-year federal prison sentence for illegal wiretapping and conspiracy to commit wiretapping.

Whether Cruise and his attorney, who is also mentioned in the suit, knew Pellicano tapped the phone is irrelevant. They could still be in hot water. Nevertheless, Pellicano should have known that he could not record any conversation, in person or over the phone, without every participant’s knowledge and consent. In California, along with twelve other states, one must haveall-party consent before recording a conversation (even in person!). If Cruise did request such activities, Pellicano should have told Cruise he would not do it. In short, Pellicano should have stayed committed to his state association’s professional ethics and California and federal statutes.

Of course, Tom Cruise is not expected to know what is legal and ethical. Neither are you. But so that you don't find yourself in a similar legal situation as Cruise, or have your evidence become inadmissible in court, you had better hire a high quality PI. So how do you know if your PI is good for you? Here are a few questions you can ask to get a better sense if she or he is a qualified professional:

1. Are you licensed and insured? While licensing varies by state, most require a minimum three years investigative experience, annual continuing education, and up to million-dollar insurance policies. If an investigator says she or he is licensed and insured, verify this with your state’s regulatory agency. Here are a list of some state agencies:

§ California

§ Texas

§ Georgia

§ New York

§ Check other states

2. What are your areas of specialization and background? While most investigative agencies will do just about anything, from finding a lost pet to investigating workplace deaths, some are more qualified than others to do different investigations. If you need surveillance work, hire a company that specializes in surveillance. If you need electronic countermeasures, hire a company that has the training and equipment. You want someone to feel motivated about your case. If your needs don’t match the investigator’s business, your case may not receive priority. A good private investigator will admit to his or her limitations and inform you about his experience and background. Most importantly, an investigator working in his or her area of knowledge is likely to know all of the rules and legal procedures that apply--he or she will not jeopardize your case.

3. Can I see your contract? The first time you see an investigator’s agreement for services should not be when you’re signing it. A high quality investigator will let you see his or her agreement in advance. You are entitled to know your rights and obligations before your first meeting. This information could save you and your investigator time and money. Some investigators even keep a contract on their website so you can look at it any time. Look at the contract, does it appear professional? If this legal document is not important to the investigator, then don’t expect other legal documents will be either.

4. How do you deliver your reports, what do they look like? You can learn a lot about the way investigators do their reports. This is the product you will receive at the conclusion of an investigation. An investigator that provides proof of all services rendered, in various formats (e.g. video and print), likely takes their work seriously.

5. Are you available 24-7? Believe it or not, some investigative agencies maintain banker’s hours. It is important to know that if something urgent comes up you can reach somebody with the company any time of day, any day of the week. Then try it out. Call the agency late at night and see what happens. While this question may not allow you to know if the investigator is being ethical, you’ll know at least if she or he was being honest about phone access.

Other questions you may want to ask, depending on your personal situation, are “How many clients do you serve at once?”; “How many field investigators work for you?”; “What are your success rates?”; “How much is your retainer?”; “How do charges appear on my credit card?”; “What was the outcome of your last case?”; “Are their additional charges for court appearance fees?”

Of course, these questions are just general guidelines. While they are likely to be help you appear as a knowledgeable consumer, they do not guarantee success. Do your homework. Search to see if the company you are about to hire has outstanding claims with the Better Business Bureau or other consumer groups. But most importantly, go to your state's regulatory agency (links above) and verify that his or her license is active. In many states, they list any disciplinary actions taken against an agency. Tom Cruise should have known better than to trust a private investigator who said he was willing to use, as Pellicano claimed, “unorthodox methods.”

Six reasons entrepreneurs should retain a professional investigator

Since the recession began, increased layoffs and high unemployment have led to a much talked about increase in new business start-ups. Most start-ups, according to data reported by Scott Shane in The Illusions of Entrepreneurship (2008), are destined to fail. What is more, businesses that seem successful are constantly faced with common business risks, such as employee misconduct, theft, and lawsuits. These constant threats keep most small-to-medium-sized enterprises in a perpetual “near-death” state.

The recession has also led to increased unemployment, economic hardship, and, not surprisingly, increased business theft. Take, for example, the case of Bradco Supply Company (Dallas, Texas), which has been robbed repeatedly throughout 2009. This is not, of course, an isolated incident,

Crooks nationwide have been stealing millions of dollars worth of shingles from companies this year, a sizable increase from years past. Previously, thieves would steal them from construction sites, but not on this level. They’re now getting ambitious, robbing warehouses — sometimes several semi-truckloads at a time — and hauling away hundreds of thousands of dollars in shingles. In Texas alone, at least $4 million worth have [sic] been stolen this year. (Oct. 10, 2009, Health News)

This has left many shingle suppliers literally hanging on by one. While public detectives are dealing with increased thefts, cities are also faced with their own fiscal crises due to declines in property tax revenues. Consequently, many of them have had to make painful cuts to city budgets. While police and fire departments may be the last to see their budgets cut, they are being asked to do more with less, and “with the emphasis in public law enforcement upon illegal drug suppression and violent crime reduction, property crimes perpetuated against faceless corporate victims receive second-level priority” (Sennewald, 2006, p. 15). Because many police departments do not have the time or resources to fully investigate small crimes against business owners (and by small this could still mean a $20,000 piece of equipment), many small businesses owners have been left searching for their own solutions.

Business owners should seek out multiple solutions to these problems. One feasible solution is to keep on retainer a private, professional investigative agency. While the cost of retaining an independent investigator could cost a business owner anywhere between $5,000 and $25,000 a year, this is considerably cheaper than the costs associated with inventory loss, employee misconduct, or service/production shut down. (If you’re smaller than that, most investigators will find an amicable solution.)

There are at least 6 reasons a professional investigator can be beneficial to any small business:

(1) Due Diligence – Whenever a civil or criminal suit is filed against a company, one of the best defenses a company has is its ability to demonstrate due diligence. Showing (with good documentation) that a company took reasonable measures to mitigate risks and thwart dangerous, risky, or hazardous behavior can make a positive impression on judges and jurors. Remember, a company just has to show it took reasonable steps. Having an independent observer overseeing employees, seeking out security breaches, and identifying product risks, is likely to be seen as a reasonable precaution. Additionally, it is hard to live with the consequences of accidental deaths or huge inventory losses, especially when they may have been preventable.

(2) Risk Assessment – Using a company that specializes in risk assessment, security, and fraud, to test for potential breach points can help save a company a significant amount of money and negative publicity. For example, an episode on Dateline NBC a while back showed valets stealing items from cars. The owners of the hotels, restaurants, or valet service companies were castigated on national television for not controlling their employees, demonstrating why these companies have a vested interested in running their own undercover operations from time to time. Other risk assessments that a professional investigator can assist with are independent laboratory product tests, computer security threat assessments, electronic countermeasures, and undercover operations to check employee loyalty. An ongoing consultation with a trained private investigator can help identity problems, and she or he can offer a variety of solutions. Do note, however, that a good investigator will admit his or her weaknesses and will suggest alternative experts to deal with issues where she or he lacks expertise. (Make sure to specify in your contract who assumes the costs for the experts.)

(3) Background Checks – Many small businesses hire people without doing an extensive background check. This can become a major liability and threat to a company. Retaining a private investigator to do background checks on all potential hires will save a company money through quantity discounts and increased security. Habitual entrepreneurs should absolutely do a background check on all potential partners and investors.

(4) Asset Searches – Of course, a company may have to do asset searches as part of a background check on investors or business partners, but if management suspects that a major customer may file for bankruptcy, and that company has accepted goods or services on credit, a thorough investigation of the indebted business’s assets should commence. A retained investigator can insure they aren’t hiding or selling assets as means of avoiding repayment of credit.

(5) Networks – One thing that many people don’t fully understand is that professional investigators have many connections with other agencies, attorneys, experts, and professionals. This means that whenever a question may arise, they have a large pool of expertise to draw upon. If a company happens to need an answer to a particular question, they can call their investigator and save precious time and money.

(6) Commitment to company goals – Businesses sometimes must thwart activities without publicity. When a public detective investigates an issue, they have a duty to observe and report. This means that—like it or not—a public detective’s investigation will be made public or, worse, publicized in media sources. A public investigator’s objective is prosecution. A private investigator, on the other hand, has many options. His or her interest is helping to protect the client from negative publicity and to thwart any activity that is not in the interest of their client (within reason).

These six reasons entrepreneurs should hire a private investigator are only partial. There are, of course, many other reasons an entrepreneur may want to hire a professional investigator. This non-comprehensive list, however, highlights some of the more important work investigators are currently doing for their private sector clients. So that each party can better understand the other’s needs and work styles in a time of crisis, it is important to build a relationship and rapport with a particular investigation company over time. This requires ongoing collaboration, which is only attainable through ongoing work together. In a time of crisis, having had a private investigator agency as part of your yearly operating expenses will save you time, money, and emotional stress. Call a local, licensed agency to see what sort of plan you can create within your budget to protect your precious business assets.