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Dozens of websites offer background checks for a few dollars. And if you haven’t had the pleasure, you can google “background check” and get ready to be bombarded.

Go ahead. We’ll wait.

Most of the dozens of services offered by these firms are for things like tenant screenings and run-of-the-mill pre-employment backgrounds. The firms do a few things pretty well, like verifying that a person exists, determining if they were involved in any serious crimes (in the past few years), or learning whether they are sex offenders or appear on terrorist watch lists. With the subject’s permission, you can get some work history or degree verifications for a few extra dollars.

Depending on various factors, these services can range from a few dollars to $500.

But what if you need more than determining whether you are dealing with the proverbial axe murderer,  sex offender or an international terrorist?

What if you’re looking to develop information about a person’s character, potential risks or conflicts, omissions in their reported history, material misrepresentations or ties to fringe groups?

You want to go beyond online sources to find trouble in a person’s past (even if their name wasn’t on it) or go beyond searching back only a few years.

Or maybe you want a deep analysis of their online history, an examination of their 82,000 tweets or a link analysis to identify possible connections to unsavory characters.

This type of deep background check is typically saved for C-level executives, potential business partners, board members, acquisition targets, an adversary in high-stakes litigation or a high-ranking official (unless it’s George Santos, but that’s another post).

The kinds of situations where there is a lot at stake, including reputation, public perception, money or justice.

Those types of no-holds-barred background checks can cost tens of thousands of dollars.

So why do these deep background checks cost so much?

No Single Source

Using a single source of information could save you time and money. And lots of headaches.

Imagine just typing a name into a database and getting all the juicy details that you need. The problem is that there is no single source of information. It just doesn’t exist. There are lots of platforms that claim to provide deep, thorough, nationwide, complete background investigations. They just don’t exist.

Unlike a background screening service that will typically use a single source for things such as criminal records, deep background checks use multiple sources for things like criminal records and in some cases, dozens upon dozens of sources for thoroughness.

For example, for a person living in New York City, I would run through about 8 different sources: a combination of professional investigative databases, state and local databases, and a statewide criminal database, along with sending someone to the courthouse (most lower-level courts in New York City are not covered well online).

Court records, are another prime example — an unbelievably powerful resource for background investigations on so many levels. We might research a dozen or more separate sources for civil and criminal litigation records on an average background investigation.

You read that right, a dozen.

Why?

Because there is no single reliable source. There are local and state court websites, state criminal databases, federal repositories and state repositories. Then there is the actual court itself, which you might think would be the single-most-reliable source — the particular courthouse in the area where the person lives.

But in some cases, you would be dead wrong.

There are dozens of reasons, but generally, these records are contained in various city, county, state and federal silos that don’t talk to each other, so there are mountains of records scattered everywhere. And if you want to actually be “comprehensive,” you need to do this research in each county and state where a person has lived from the time they turned 18, which in some cases could be dozens of jurisdictions.

Yes, many powerful (and expensive) paid databases aggregate data from all over the country. They are pretty reliable, but none are totally comprehensive.

Resource Intensive

Digging deep is time-consuming and resource intensive.

If you have ever been on social media, you know that doomscrolling is a thing. You could spend hours scrolling before you even blink. But doomscrolling in your personal life usually means you are mindlessly scrolling; reviewing and analyzing social media in an investigation require a whole other level of attention and focus.

And that doesn’t even consider finding the social media profiles in the first place, especially when you are researching John Smith. In a business where time is money, that can be costly. And that’s just one part (albeit an important one) of a deep background check.

It’s easier just to google something and report that as fact. It’s not as easy to do the analysis and dig in.

Court records are another good example. While some databases may be able to identify the existence of a record, the analysis is equally important. What actually happened?  Was that public drunkenness conviction a college-age mistake? Or something more serious? Or was that divorce a nasty knock-down, drag-out fight? Or an amicable separation?

You won’t know until you review and analyze the documents, which you have to collect (often by sending someone to the court), and then you have to read them and draft a concise summary from the dozens of pages of legal mumbo-jumbo.

Analysis

We are in an age of misinformation. The reality is that anyone can post anything online. Some of this is easy to prove or disprove while other things can take some real digging. Doing a bit of googling and reporting a Reddit post as fact is not really doing anyone any favors.

Last year, I was at a conference discussing some advanced open-source investigative techniques, and one of the topics discussed was the spread of misinformation. One of the speakers posted what I thought was a great quote from Mark Twain, which I was going to steal until I realized that Mark Twain never actually said it.

Ironic that the speaker, a trained professional who was discussing the topic of misinformation, posted a fake quote, huh?

Snopes took some time to dig into this, speaking to Twain experts who found no evidence that Twain ever wrote or uttered this phrase.

In the real world, we recently did work on someone who was a bit of a “fake” entrepreneur. It makes me chuckle when I see someone who expounds on their business successes and clings to the false illusion that they are some guru with splashy articles on third-rate websites, self-published prominence, glitzy videos and fancy “awards” from places you have never heard of.

It’s easier just to google something and report that as fact.

It’s not as easy to do the analysis and dig in.

Thoroughness

To be thorough, you need to access various sources, the best of which cost some serious money.

A baseline subscription to LexisNexis (historical public records and news sources), Westlaw (historical public records and news sources), Bloomberg/Bloomberg Law (news and historical legal filings) and Factiva (news) will set you back thousands of dollars a month.

You might be asking yourself, why is it necessary to be so thorough?

In many background checks it may not be necessary, but if there is something on the line where uncovering any bits of information might be helpful, it just may.

For example, we recently found three separate DWI cases over a matter of a few years against a person in some database searches. Several other databases we searched did not have any records of these DWI cases and — get this — the courts where the cases were filed did not have any of the records.

Why?

A basic background check may suffice for some basic questions, but if you are looking to get answers to some nuanced questions, perhaps not.

Because the court expunged the records. In a typical background search for employment purposes, these records could not even be reported. But if an incoming CEO of a major public company has a pretty serious drinking problem, I think that would be something you would want to know.

News media sources are another great example. Nexis and Proquest are amazing sources for general news information and include thousands of sources worldwide. But they don’t include the entire archives of The Wall Street Journal, Reuters or Bloomberg. And historical newspapers are much better represented on places like Newspapers.com.

I was recently working with another investigator who had asked us to help with a deep background check on a hedge fund manager in the context of potential litigation. It was a bit out of the investigator’s wheelhouse, so he asked us to help out. When all was done, we sent the investigator an invoice that included more than $600 in database charges and on-site court fees, which the investigator was quite surprised by.

That was just our cost; no markup included.

Expertise

Expertise comes in all shapes and sizes. For someone with a deep understanding of background investigations, it’s a combination of having expertise in understanding the universe of available information, synthesizing that information into actionable intelligence and understanding your limitations. A finite number of people in the world have the skills, knowledge and expertise to do a truly deep background check.

I’ve spent thousands of hours of work to master this craft. I’ve worked on cases involving some of the highest political offices in the land and have spent hundreds of hours digging into some really powerful people.

And when you have been doing things for this long, you collect what may seem like a lot of “useless” information to most of the world, but it is extraordinarily valuable information in your little bubble. Like access to a database of historical records from California that has been floating around for years and includes things like birth records and divorces dating back to the 1970s. Or how to get historical Financial Industry Regulatory Authority reports from state securities regulators. Or where to go for court searches in California (Baxter Research), Massachusetts (R&R Search), or Illinois (AM Legal Services). Or that Premier Due Diligence can handle public record searches all over the country. And if I need copies of corporate documents quickly, Capitol Services is my go-to.

In this day and age, having a deep bench of knowledge of social media is crucial. While most people have at least a rudimentary knowledge of how to get around social media and scroll through someone’s feed to see if there are any major red flags, it takes some serious amounts of manpower, powerful (and pricey) tools like Maltego and ShadowDragon, or some serious know-how to get beyond that.

Like finding hidden accounts, extracting deep links to groups, close-knit friends and confidants, or membership to extremist group sites.

Getting Your Money’s Worth

The cost of a deep background check is important to consider, but it should not be the primary deciding factor. The decision should be made based on a comprehensive evaluation and how it aligns with the overall strategy and goals.

A basic background check may suffice for some basic questions, but if you are looking to get answers to some nuanced questions, perhaps not.

I will leave you with a famous quote:

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Even in their most basic form, nearly all background investigations will include some form of identity verification, some criminal history (the depths of which may vary), and watch list research, but there are varying levels of background investigations where you can find information, from a $19.95 online service to a several-hundred-thousand-dollar background investigation such as one done by the FBI.

And there are quite a few in between.

In general, however, background investigations are designed to reveal information in a person’s history that may call their character into question.

On one end of the spectrum is the basic online background investigation. In most cases, online background checks should be able to do a good job of verifying a person’s identity, finding any serious criminal offenses, exposing significant jail time, and identifying registered sex offenders and international terrorists.

In the simplest terms, these types of background investigations should be used to identify the terrorist, the ax-murderer, or the sex offender you wouldn’t allow within three miles of your residence.

While this has been completely oversimplified, this end of the spectrum is what you would typically find in an employment background check, where the main focus is identify verification, criminal records, terrorist watch lists, and sex offender registries. These checks may also confirm the individual’s reported degree and employment history.

What Can Be Revealed in a Background Investigation?

At the other end of the spectrum is the FBI background investigation, where every moment from the time a person is born is scrutinized, vetted, examined, cross-checked, and investigated.

While this kind of deep vetting is saved for extraordinary circumstances like investigating people in high-ranking political positions or people involved in extremely high-stakes litigation, it is between these two extremes that background investigations can be really revealing.

This is where you can identify much more nuanced information that can call a person’s character into question, like connections to unscrupulous organizations, a history of failed businesses, or questionable or inappropriate comments hidden deep in social media accounts.

This is also where financial issues, factual misrepresentations, lies, falsehoods, exaggerations, controversial remarks, contentious behavior, accusations, troublesome conduct, and problematic connections can be revealed; those revelations provide a broad-based picture of a person to help the client make a more informed decision.

For example, attorneys involved in high-stakes litigation may want to know more about a so-called expert or star witness; a private equity firm making a major acquisition may want to dive deep into their new president; the board of a public company may want to closely scrutinize the activities and representations of the incoming CEO/chairman of the board; a corporation may want to examine a competitor who has mysteriously come out of nowhere to steal some high-stakes accounts.

So, can a background investigation reveal whether or not you stole lunch money in the fourth grade, or whether you were jaywalking across Main Street or have a secret tattoo that nobody has ever seen?

Maybe, but I can promise you it’s going to be extraordinarily challenging, time-consuming, resource-intense, expensive, and not easy to find … unless you have some close friends in the FBI. ;)

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This post originally appeared on ACFE Insights, a blog run by the Association of Certified Fraud Examiners.

Bill James revolutionized the way that people look at baseball players. Sabermatricians, as his followers would later be known, felt that there was a direct correlation between a player’s past and future performance. Instead of relying on the subjective judgments of baseball scouts, James compiled objective statistics and analysis to measure a player’s performance, thus helping to predict future performance.

“Brady Ball”

A great example of Bill James’ method happened in 1996, when Baltimore Orioles slugger Brady Anderson hit 50 home runs in 687 plate appearances (equivalent to one home run for every 13.7 plate appearances), while in his previous three seasons, he hit a total of 41 home runs in 1,846 plate appearances (one home run for every 45 plate appearances).

It’s clear that Anderson’s past performance did not correlate with his breakout 1996 season, and sure enough, he regressed back to one home run every 40 plate appearances for the remainder of his career.

Anderson was long suspected of using steroids for the 1996 season, but those reports have never been confirmed. Without analyzing historical statistics, it would be difficult to see the uniqueness of that 1996 season.

How does analyzing “past performance” in baseball relate to a background check?

Collecting and analyzing information based on a baseball player’s past performance is similar to what a private investigator does when conducting a background check. Objective information is collected about a person’s past through open sources and public records to help clients make more accurate predictions about the future. Historical bankruptcies, financial difficulties, criminal acts, a litigious past, misrepresentations and regulatory sanctions are all indicators of potential problems down the road.

Past performance issues in a background check

There were many “past performance” issues that should have been major red flags in Bernard Madoff’s Ponzi scheme, including a two-person accounting staff overseeing a $50 billion firm, a highly secretive investment strategy and investment gains that neither Wall Street professionals nor Harry Markopolos, the Madoff whistleblower, could recreate.

Other examples of “past performance” as an indicator of the future can be found in our recent post about 11 convicted Ponzi schemers who had already served jail time for other frauds or in the ACFE’s recent post about Barry Minkow’s recent criminal charges.

Final Thought

Just like in baseball, there is no one piece of information or statistic in a background check that can help predict the future. In fact, there are multiple layers of information over a period of time that must be analyzed to fully understand someone’s past behavior.

When trying to learn more about a person’s background, if you think that a few reference checks, Google searches, a referral from respected members of the community or a couple of face-to-face meetings are the most reliable predictor of future performance, you need to take a page from the great Bill James and evaluate past performance.

Thanks to Seth Godin’s “Bill James and you” for the brilliant idea.

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