Proper Review of Information Can Protect Investors

Sometimes the hardest thing in the world is to get someone to use their brains. Take, for example, the European businessman who plunked down about $200,00 in a limited partnership promoted by a Houston “good old boy” who showed him some oil and gas prospects that looked too good to be true. You guessed it , they were.

Or, continuing with instances, the investors who sunk $8 million into an oil and gas drilling deal in Oklahoma and soon began to wonder why they weren’t getting any reports from the company or, more importantly, any money from anyone.

As the lyrics to that famous campfire ditty go, “Same song, second verse; should get better but it’s going to get worse.”

Bob Adams, Vice-President and operations manager of San Felipe Oil & Gas Corp., in Houston, said, “Unfortunately, these swindlers happen and when they do everyone suffers including the honest people in the oil and gas industry. Foreign and American investors get bilked by these schemes and in these two incidents I believe they may very well have saved their money if they had done their due diligence first.”

Information available:

What Adams was referring to was using the services of a Houston based investigations firm called Kimmons Investigative Services, which specializes in providing information about individuals and companies to the business and financial communities through searches of public records.

By utilizing the Freedom of Information Act and the Texas Open Records Act, the company has identified and obtained access to several hundred different sources of information. Included in these sources are such public record documents as: assumed name and corporate affiliations rolls; tax and real property records; real estate transactions; liens and judgment activities; uniform commercial code (UCC) filings; civil and criminal court cases; federal civil, criminal and bankruptcy cases; drivers, marriages and professional license lists; and many more. All of which are assembled in the company’s research department on extensive computer output microfilm and computer microfiche libraries.

The investigations and security company also has a library of published volumes and books containing supplemental information as well as access to other computer terminals and databanks. Through these various resources, the company’s researchers are able to obtain information about literally millions of people and companies.

Various clients:

Rob L. Kimmons, president of Kimmons Investigative Services, Inc. and its sister company, AAR Investigations, said the firm’s clients are a wide variety of companies, attorneys and banks who use the reports for merger and acquisition evaluations, possible conflicts of interest, location of concealed assets, evaluation of potential business partners and other reasons.

It was through Kimmons Investigative Services that Adams learned that the European investors had been “had”. But, by that time it was too late for any recourse, even legal, because of the manner in which the deal had been structured.

Adams says, “Our company is 90% owned by a Swiss investment bank and he is one of the bank’s clients. As a favor, the bank asked me if I could check into the matter. A friend of mine who is a banker and I were talking and I mentioned my problem. He said, ‘Why don’t you contact Kimmons Investigative Services? We use them to locate hidden assets and they do a marvelous job.’ So, I did.”

Moving the Money:

“The report they brought back was incredible. This guy was involved in all kinds of law suits. The Internal Revenue Service was after him. He was in all sorts of corporations, some in his name; some in his wife’s name; in his ex-wife’s name; and under his secretary’s name. He’d be president of some and treasurer of others. It was a maze.

“We found out that the firm in which the European had invested was registered in the Bahamas by the promoter who then took the funds from that company and reinvested them in his Houston company, So, the only way the European could get his money back was to sue in the Bahamas first and then come to the U.S. It was an impossible situation. I know if he had seen the guy’s record first he would have never given him $200,000. No way.”

Kimmons says that it is usually a “tip off” that something unethical will be disclosed when a search reveals a person in a multitude of companies operating under different names and with relatives and friends as the officers but holding different job titles. Usually, these individuals are involved in an uncommon amount of legal actions as well.

“They use these companies to keep their activities murky. Some of the companies will be active and some will be dead or just paper companies,”Kimmons said.

Kinds of Reports:

Kimmons Investigative Services, Inc. investigations and security services offers clients three types of reports, The basic report is designed to cover the principal informational needs. It is an in depth analysis that taps all available resources of the company and usually establishes relationships, assets, and transactions that are otherwise virtually untraceable. This report costs about $1,500.

Another is the index report, which is designed to supplement information normally available to banks and financial institutions. It covers the principal needs of anyone desiring an overall view of a person or company. The cost of this depends upon the amount of information required.

The last is the tailored report, which is designed to a company’s or individual’s specific needs by expanding or modifying an existing report. The cost is dependent upon information required and time expended.

The Vanishing $8 Million:

Kimmons was not involved in the incident involving the $8 million Oklahoma drilling deal. Adams said when the investors finally traced the activities, they discovered the promoters were using the drilling company as a front, and once they got all the money invested they could, they sold the assets, paid off the bank and vanished with the difference.

Kimmons said his investigations and security company could have investigated the drilling company through public records in Oklahoma but it would have taken a little more time than it does in Texas.

“We have private investigators working out of state all the time. We give up some computer speed, but we can produce an excellent report because we know where to look for these records and most people don’t.”

He pointed out that most companies don’t have clerks trained in legal research and can spend weeks at a courthouse without locating as much information as private investigators of Kimmons Investigative Services, Inc. can.

“And,” Adams says, “what’s nice about Kimmons and Associates’ reports, is that they are all admissible in court as legal documents, if need be. You get an idea of the individual’s or company’s general business characteristics before getting involved. Sometimes the best deal you can make is the one you don’t to. That’s using your brains.”

Security Management, July 1985.

Posted in Uncategorized.