Today's private eye is high-tech pro Financial miscreants traced by sleuth with computer.

February 20, 1992|By Steve Lohr | Steve Lohr,New York Times News Service

HOUSTON -- Ed Pankau is a private investigator who seems to have walked off the pages of a pulp novel. A former Green Beret and the son of a bootlegger, the 46-year-old private eye has had his share of cases involving murder, mayhem and colorful characters.

A green Bugatti sports car adorns his suburban driveway. He won it years ago in a jailhouse poker game from a client, a wealthy rancher accused of manslaughter. In Mr. Pankau's world there are good guys and bad guys. Mr. Pankau is a good guy; he invariably describes his quarry as "sleaze balls" or "dirt bags" or both.

Despite his hard-boiled manner, Mr. Pankau is one of the new breed of financial sleuths who track down the assets hidden by white-collar crooks. And it is a booming field, thanks to the savings and loan debacle, bank failures, corporate bankruptcies and financial scandals like the collapse of the Bank of Credit and Commerce International.

"We're in an age of high-tech crime, so the people with the skills to handle those investigations are in demand," said Joseph Wells, chairman of the National Association of Certified Fraud Examiners, a 5,000-member organization.

Today, financial investigation has become a flourishing business, embracing several hundred practitioners with a variety of skills, including so-called forensic accountants at major accounting firms like Price Waterhouse and Arthur Andersen.

But the new-breed private investigators are on the front lines. Some are lone wolves; others work for large firms like Kroll Associates Inc. of New York, which tracked Saddam Hussein's assets for Kuwait, or medium-size firms like Mr. Pankau's Intertect Inc. in Houston, which has pursued the assets of many failed savings and loans and helped the Panamanian government search for the assets of Gen. Manuel A. Noriega, its deposed leader.

Mr. Pankau was in Panama on an insurance investigation during the American invasion in 1990. In the confusion, he slipped into a building and made off with a computer printout listing more than $800 million in assets held in 18 countries, assets he is convinced are General Noriega's personal holdings.

The slumping economy and the financial wreckage of the last decade are fueling the demand for his services.

The Resolution Trust Corp., the agency established by Congress in 1989 to clean up the savings-and-loan mess, has created a huge market for financial experts as it tries to recover assets of the more than 650 failed institutions seized by the government. Even though it has its own investigative staff, Resolution Trust contracts out asset-search work to 45 private firms. It also hired Mr. Pankau to help write a handbook on asset searches.

Other work comes from corporate clients. A bank, for example, will often hire a private investigator when a large individual borrower has fallen behind on loan payments. The bank wants to know what assets the person may have stashed away that could be put up as additional collateral, as real estate values fall. Banks also want to know how tight the client's financial pinch is, because the borrower's problems may soon become the bank's.

"The bank is often not yet in court, but it's in a fight and it wants to strengthen its bargaining position with a problem client," said Dan Karson, general counsel of Kroll Associates, which has conducted many such investigations for banks.

Mr. Pankau got into the asset-search business in 1978, tracing the recoverable funds of five small Texas banks that had failed because of bad management and fraud. His client was the Federal Deposit Insurance Corp.

He seemed to have been overly optimistic in taking the assignment; his three-person firm had to hunt for any seizable assets on about 500 bad loans in little more than a year.

"You never could have done it by the old method of going to the courthouse and pawing through the public records," Mr. Pankau recalled. "I realized there had to be a better way to do it."

So he made microfiche copies of government records, which he took to his office, and organized the bank records looking for patterns in the loan problems. He noticed, for example, that there were dozens of cases of local police officers who had taken out $10,000 car loans, made one payment, then retired and moved out of the state. Mr. Pankau located them for the

banking authorities by tracing where their pension checks were sent.

Recognizing the potential for automation, Mr. Pankau bought 10 computers in 1983 in a bankruptcy sale. That move was prescient. In the last five years or so, the amount of information on people and companies available to anyone with a computer and a telephone has grown enormously.

There are now thousands of data bases listing motor vehicle registrations, property held, assumed names, utility bills and owners of race horses and private aircraft.

While the computer does not solve cases, it cuts the time spent on asset searches from days to hours. Mr. Pankau's contribution to the craft has been devising the methodology for searches, starting with personal information, by feeding Social Security numbers and dates of birth into a computer, then moving to business records, litigation history and other clues.

"In complex cases, you still have to travel, pore over documents and talk to people," Mr. Pankau said. "But the computer has revolutionized this business."

His biggest client is the U.S. government, going after assets connected with failed savings and loans and banks. He also instructs federal agents on financial investigations.

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