A Bad Rapp
By Bill E. Branscum
© Copyright 1999
I suppose that the entire investigative
industry is familiar with the general issue related to the practice
of obtaining information via pretext that would not be otherwise
available, and I suspect that we are all thoroughly sick of hearing
about the Touch Tone case. Every industry has black sheep; unfortunately,
James J. Rapp and Regana L. Rapp, the owners of this "information
brokerage" are a couple of ours.
The issue is "pretexting" - the long
established, widely used practice of lying about who you are or
what you are doing in an effort to develop information you could
not otherwise get. No federal law specifically criminalizes the
act of lying in an effort to obtain confidential, or otherwise unavailable,
With the indictment of the Rapps, the
FTC has launched an all out assault on the issue of pretexting financial
information, it is hard to imagine why it took so long. With a horde
of greedy halfwits advertising to everyone with a web browser that
they will find out anything, for anyone with a credit card, it was
inevitable. Those who will not exercise common sense invariably
cause someone to step in and exercise it for them.
Considering how many of these characters
there are on the Net, one might wonder how the FTC came to focus
on the Rapps. According to an affidavit filed by Robert Brown, the
agent in charge of the Colorado case, the Colorado Bureau of Investigation
became aware of the Rapps last January after receiving an inquiry
from the Los Angeles Police Department. Following the execution
of a search warrant at the residence of an LA private investigator,
the LAPD discovered that the Rapps had provided him with home addresses,
phone numbers and pager numbers for detectives on the LAPD Organized
The LA private investigator had obtained
the information for Assaf Waknine, an Israeli national who is reported
to be involved in Organized Crime. Mr. Waknine put the information
to good use - he "cloned" at least one detective's pager and monitored
his pages in an effort to discover the identity of a confidential
informant. There is no evidence that the Rapps conspired to assist
Waknine in this regard - they simply sold anything requested to
anyone who could pay for it.
And I do mean anything they could get
to anyone that would pay for it; but what would you expect from
a business formerly known as Dirty Deeds Done Dirt Cheap? Well,
how about the unlisted phone numbers of the families of the children
killed at Columbine High School so the media could hound them, a
major corporation's client list so their competitor could cost them
a half million in revenue, or Ennis Cosby's phone records and charge
card statements after he was murdered in Los Angeles. Anything to
anyone - do with it as you like.
No doubt motivated by righteous indignation
that isn't hard to imagine, the Colorado Bureau of Investigation
set out to "sting" Rapp. Working through a former journalist turned
PI Jane Cracraft, they asked Rapp to obtain the bank records of
Kristina Koellner, a female employee of the Colorado Bureau of Investigation.
Rapp got $460 for the records but it may cost him 24 years in jail
and a million dollars in fines and penalties. In my humble opinion,
Jane Cracraft deserves an, "Investigator of the Year Award."
The Rapp Case offers at least one wonderful
irony. Colorado, the state from which the Rapps operated is one
of the few states that do not license private investigators. Having
served time related to a 1982 conviction for auto theft, James Rapp
is a convicted felon who could not operate in a state that requires
licensure. Nevertheless, it was a terrible choice for their base
of operations; the irony is that Colorado is one of very few states
where it is a crime to impersonate someone else for financial gain.
The story is not without some humor
either. One of Rapp's clients was the well known Denver PI, Al Schweitzer.
Nearly legendary for his "innovative" approaches to gathering information,
indicted thrice and convicted once by the federal government, and
the author of a widely circulated book on pretexts, he testified
before the House Banking Committee during their hearings on the
subject last summer. When he was recently asked about his relationship
with Touch Tone, Al is reported to have stated that he quit using
their services more than two years ago because, "he did not condone
Rapp's methods." A proselyte's epiphany I suppose.
On a foreboding note, it has been widely
reported that Rapp's records reveal that a Florida information broker,
Action Research Group, was one of his largest clients to the tune
of about $5,000 a month. I have not heard whether Action Research
Group has been required to produce their records yet, but I would
certainly expect it.
Unfortunately, as is the case with most
issues, there is another side to tell - an aspect of this issue
that our government utterly declines to address. Buried deep beneath
the avalanche of evidence that Rapp is a profiteering outlaw with
no demonstrable integrity is the question, "What EXACTLY is a bankruptcy
trustee, bankruptcy creditor, mother pursuing a deadbeat dad, attorney
attempting to execute upon a judgment, etc., supposed to do when
the debtor is willing to outright lie under oath?"
In an effort to attack the practice
of pretexting, the government prosecutes a case where the fact situation
is so outrageous as to eclipse the actual issues. The fact is, people
and Presidents lie under oath with impunity and thereby neuter the
judicial process. In the face of blatant perjury, a deposition in
aid of execution is nothing but an exercise and you cannot use third
party production mechanisms when you cannot identify the appropriate
third party. How could you possibly subpoena records you have no
way to know exist?
The FTC has adopted the position that
obtaining information by pretext should be outlawed as an unfair
and deceptive trade practice. To this I would say that shooting
people is bad too but there is a time and a place for it.
The government argues and adamantly
insists that "people have a legitimate expectation of privacy with
regards to their bank account information" - it does sound good
to the constituents back home I suppose. I say that is utter nonsense
and cite as my authority the US Supreme Court case, U. S. v. Miller,
425 U.S. 435, 96 S. Ct. 1619, 48 L. Ed. 2d 71 (1976), which established
that, "an individual has no protectable privacy interest in a bank
In response, there are those who maintain
that subsequent legislation, The Right to Financial Privacy Act
of 1978, established a right to privacy; they obviously have not
read it. Enacted by Congress to restrict access to banking records,
the Act only prohibits access to an agency or department of the
United States. In support of that interpretation, I would cite the
Supreme Court of Rhode of Island, Pontbriand, et al. v. Sundlun,
No. 95-571 (R.I. 08/15/97).
The notion that the identity of your
bank and your account number is some sort of secret worthy of all
this hoopla is nonsense. Your bank sends this information to everyone
who writes you a check as evidence that you cashed it. When you
pay your property taxes, the tax office copies both sides of your
check and that is generally public record. There are many, many
examples of ways in which to obtain this sort of information.
Nevertheless, there is no doubt in my
mind that the government is going to put the habeas haltus to the
act of using pretexts to obtain financial information, the fastest,
most dependable and least expensive way to get it. As a consequence,
debts will go uncollected -- the big losers will be the big creditors
(the number one consumer of this sort of information). Who do you
suppose they will pass their losses on to?
It would be nice to think someone in
a position of authority would recognize the realities involved,
and exercise some common sense, but this situation is about money
in more ways than one. In the federal system, as in most bureaucracies,
budgets depend upon perceived significance. Everyone knows Congress
is studying the issue of pretexts used to gather financial information;
they have been holding hearings for quite some time.
The FTC did not merely "jump on the
bandwagon." They outright preempted the deliberative process and
seized this as an opportunity to remind Congress that they are a
significant enforcement mechanism. The FTC has thereby generating
a lot of generally favorable ink and positive ink means budgetary
allocations to any federal agency. For those who are "information
brokers" as opposed to investigators, I believe this to be the harbinger
of doom and gloom. Assuming that it becomes clear that this activity
is prosecutable, we are going to see a lot more ink.
Rather than bureaucratic grandstanding,
the answer is to put a stop to the wholesale marketing of financial
information to anyone with a credit card and provide a meaningful
way to access information that judgment debtors are supposed to
be required to provide. By all means do away with the lying - mandate
the availability of this information to licensed investigators,
law firms, credit collection agencies and so forth where circumstances
such as bankruptcies, judgments and child support justify it.
This is not without precedent - the
FCRA, as most recently amended, protects the public's right to privacy
in their credit reports except when the person seeking that information
has judgment in hand. It would be a simple matter to enact legislation
requiring that financial institutions respond to a request for information
accompanied by a certified copy of a Bankruptcy Petition, Judgment
or Order of Support just as they would to a subpoena.
I long ago lost any illusion that the
government could be counted on to do the reasonable thing. I fear
that a knee jerk reaction is forthcoming - I expect it to do a lot
more harm than good.
Branscum is a licensed Private Investigator and owner of Oracle
International, an investigative agency he established in Naples,
Florida following his career as a federal agent. His experience
includes investigations related to narcotics smuggling, money laundering,
securities fraud, the unlawful exportation of critical technology,
the sexual exploitation of children and contract murder.
International maintains a web site at http://www.OracleInternational.com.
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