March 2005

Ideas in Motion: Paul Eisenberg: Super Sleuth of Collections

By Scott H. Cytron, ABC

If you ask any CPA what the most favorite part of his or her business is, perhaps the very last words you’ll be likely to hear is something about collecting unpaid debt.

Ask Paul Eisenberg that same question, and the answer would be inversely proportional to the majority of the accounting profession. Paul is one of the more atypical CPAs around, although he carries with him another designation that is becoming more common to the accounting profession.

As chief operating officer of Johnson, Morgan & White (JM&W), a commercial collections agency in Boca Raton, Fla., Paul is a CPA and CFE (Certified Fraud Examiner), both of which he uses everyday as part of his business. In a profession mostly foreign to accountants, Paul and the other JM&W executives, including the company’s president, Robert Cooper, use investigative techniques to uncover fraud associated with collecting from debtors on behalf of the agency’s clients.

Key to the investigative procedures is how Paul is using technology to find and uncover debtors.

“The Internet and software are great aides for researching debtors,” says Paul. “However, a combination of intuition and experience from years of training allow you to identify and trace seemingly innocent leads provided by your electronic investigation.”

In general, collection agencies use a great deal of software and technology solutions to help with their efforts. Many design and create their own proprietary systems because those provided by various vendors do not meet their needs and/or they do not want to spend the time and resources to custom-design portions of existing software. Others, like JM&W, use existing solutions. In the agency’s case, it uses Debt$Net, a PC-based collections software package designed for collection agencies. JM&W also uses Accurint and LexisNexis to help with its skip tracing activities, the process of finding and locating a debtor through various strategies, including employer tax ID numbers, Social Security numbers, addresses, court records and other documents.

Beyond the software, the technology Paul refers to is more in line with investigative techniques endorsed by the Association of Certified Fraud Examiners (ACFE), the governing body overseeing the CFE designation. Some examples of electronic media and software in this arena include:

  • Online Public Search Tools. Paul says there is a multitude of available national, state and local By Scott H. Cytron, ABC If you ask any CPA what the most favorite part of his or her business is, perhaps the very last words you’ll be likely to hear is something about collecting unpaid debt. Ask Paul Eisenberg that same question, and the answer would be inversely proportional to the majority of the accounting profession. Paul is one of the more atypical CPAs around, although he carries with him another designation that is becoming more common to the accounting profession. A s chief operating officer of Johnson, Morgan & White (JM&W), a commercial collections agency in Boca Raton, Fla., Paul is a CPA and CFE (Certified Fraud Examiner), both of which he uses everyday as part of his business. In a profession mostly foreign to accountants, Paul and the other JM&W executives, including the company’s president, Robert Cooper, use investigative techniques to uncover fraud associated with collecting from debtors on behalf of the agency’s clients. Internet sites to research liens, judgments, mortgages, automobiles, boats and other areas. “Once this information is obtained, the experienced fraud investigator can use the information obtained to find additional information on the subject,” he says.

  • Publicly Traded Companies. Many of the debtors are publicly traded on various stock exchanges, NASDAQ, Bulletin Board, pick sheets or on numerous stock exchanges overseas. Obtaining information, including financial statements, cash flow analyses, major contracts, press releases, and officers and directors, is relatively easy, he says. “However, using details found to “dig up” more documents requires diligence and know how.”

  • Extensive Collection Database. Paul says the agency uses its own systems and databases to identify debtors who have previously been placed for collection with its own agency and other agencies. “The information contained on “repeat debtors” is invaluable in determining the potential for a successful outcome, as well as providing a trail on how to best collect from that debtor.”

  • Foreign Internet Search Engines. Many international debtors can be investigated using foreign language search engines. “While I do not speak any foreign languages, I often can trace foreign debtors through Web sites not available on many U.S. based search engines, then use other available Internet resources to translate them into English.”

Just as Paul is seemingly different from many accounting professionals, his background also shows similar differences, although the running thread that ties it all together is his CPA designation. An accounting major at Boston University, he graduated with a degree in business administration. He soon joined a relatively large CPA firm (Main LaFrentz & Co.) in New York City in 1975 and became a CPA in New York in 1977.

“I audited numerous companies of all sizes, public and private, over a four-year period, and joined their largest client, ACLI International Inc, a privately held physical commodities company with more than 2,000 employees worldwide, as its divisional controller,” says Paul. “I went on to head their London Finance division for two years in the early ‘80s, then returned to the United States.”

When he returned, he was promoted to corporate treasurer with responsibility in three main areas: managing the company’s worldwide loan portfolio ($200+ million), overseeing the foreign exchange proprietary trading division, and serving as chairman of the Worldwide Credit Committee.

“This was my first real exposure to credit and collections,” he says.

ACLI was acquired by Donaldson, Lufkin & Jenrette and he became a senior vice president of DLJ. After several positions with other companies, he eventually joined long time friend Robert Cooper, as business partners in Johnson, Morgan & White. In a volunteer capacity, he has served as an officer and director of the International Association of Commercial Collectors (IACC) since 1997, and is currently vice president of the Association.

 “My CPA designation and background helps both me and my agency examine and understand complex financial statements, cash flow analyses, and complex loan/leasing contracts,” he says. “In addition, footnotes to financial statements can greatly impact what the numbers say. My accounting/CPA training allows us to better understand what the financial makeup of a company is and to formulate creative plans for repayment of debts owed to our clients.”

In addition, his CFE designation gives him the edge he needs to stay on top of the game.

“In today’s business environment, it is extremely difficult to keep up with all of the new trends to detect and prevent fraud. My CFE designation allows me to network with other anti-fraud professionals, attend seminars and keep abreast of all new developments to aid in fraud investigations.”

While there are many CPAs who are also CFEs – most of whom are using their designation in forensic accounting matters – Paul actively encourages any accounting professional to get involved in this specialty area within the larger context of accounting and finance. It’s obviously worked for him and countless others – even in the most untraditional of situations.  

About Author: Scott H. Cytron, ABC, is an accredited communications and public relations consultant working in the accounting, health care, high-tech and finance industries. He can be reached at [email protected] or through his Web site, http://www.cytronandcompany.com. About Column: Ideas in Motion is a monthly column designed to focus on best practices within CPA firms and organizations involved in providing technology related services.