By Kevin Allison
October 4 2005
Browsing through the array of personal security services available to
top executives and other wealthy people can feel a bit like watching a
James Bond film.
Small arms training and evasive driving lessons may sound over the top
to the average observer. However, for the very wealthy, and especially
for those whose wealth brings notoriety, risks to personal security
can be very real.
Earlier this year, a former painter at David Letterman's Montana ranch
was arrested after he bragged to an acquiaintance about a plot to
kidnap the talk show host's son and nanny and demand $5m in ransom.
Thanks to the would-be kidnapper's big mouth, Mr Letterman and his
family were spared a terrible ordeal, and the man was sentenced to 10
years in prison.
Other cases have ended in tragedy. In a notorious indicent in 1992,
Sidney Reso, a wealthy Exxon executive, was kidnapped at gunpoint in
his driveway by a disgruntled former employee.
Mr Reso, who was wounded during his abduction, was kept bound in a
tiny storage locker for days before he died of a heart attack.
But don't pick up the phone and order that kevlar-reinforced panic
room and team of bodyguards just yet. Although kidnapping remains an
issue for those who travel to global hot spots, experts say most
security threats are more mundane.
"Bodyguards are one layer of protection, but we like to suggest to our
clients to pre-empt and avoid problems." says Gary Noesner, senior
vice president of crisis and security management at Control Risks
Group, a risk consultancy.
Improving personal security starts with a basic risk assessment. These
can cost a wealthy client anywhere between $12,000 and $24,000,
according to security experts.
Consultants performing a risk assessment evaluate factors ranging from
the physical security of a client's primary and secondary homes, to
their personal habits and the frequency of their international travel
to get a feel for potential vulnerabilities.
Some risks are no-brainers. "The flamboyant risk-taker that's out
clubbing every night is probably at the greatest risk," says Mr
Noesner. "Notoriety is a big issue. You don't want to be marked as
someone who has wealth."
This especially applies to children who may not realise that their
family wealth may make them a target.
"You want to teach them a healthy dose of fear," Mr Noesner says.
"They may not understand that they may be subject to special interest
because of how wealthy their father is. They have to realise that not
everybody who asks questions about that is a good person."
One of the most basic mistakes high net worth people make is not
paying enough attention to who they allow to come into close contact
with their family, whether they are friends of toubled relatives or
improperly vetted domestic help.
"Everybody has something in their closet, whether it's a crazy nephew
or something like that, that can create problem for them," says Donald
Henne, a senior director at Kroll, the risk consultants. Moreover, "a
lot of these high net worth individuals have personal confidants that
know everything about them. There are risks there on the financial
side and on the personal side."
Simple precautions can go a long way toward lowering these risks. A
routine background check on Kelly Frank, the painter behind the
Letterman kidnapping plot, would have revealed that he had been placed
under police supervision after a run-in with the law in 1999.
For risk-taking entrepreneurs unaccustomed to the attention their
new-found fortune can bring, such insights may not come naturally.
The rise of the internet and other electronic technologies has opened
the floodgates to new security threats from tech-savvy thieves and
Although identity theft is a problem at all levels of the economic
ladder, the wealthy make particularly tempting targets.
Chubb Group, the insurance company, says that one in five Americans
has reported an indicent of identity theft, but "we believe that there
are potentially twice as many victims as have been reported."
Most identity theft is confined to a few unauthorized credit card
purchases. But in extreme cases, a fraudster who stumbles onto the
right information can assume another person's identity and travel,
sign contracts or commit other fraud in their name.
Chubb says its identity theft insurance policy, which covers up to
$25,000 in expenses related to an indicent of identity theft, such as
the cost of restoring one's credit rating, has been a hit among
Security consultants can analyse how clients handle sensitive
information to help prevent such things happening in the first place.
"A lot of clients, when you talk to them about shredding, they think
there's no chance that anyone is going to get ahold of their bank
account statements or stock statments," says Mr Odom at the Ackerman
Group. "We tell clients not to give away information about themselves
gratuitously when travelling and about the advantages of using cash
instead of credit when travelling overseas."
And what about kidnappings? People who travel to Latin America and,
increasingly, the Middle East, have the most to worry about in that
Mr Noesner at CRG says that the threat posed by kidnappers is directly
linked to the efficiency of a country's police services. Thus, in the
US, kidnapping for ransom is almost non-existent. Most kidnappings in
the US involve sexual motives instead.
"If it's in Mexico City, it's about ransom. If it's in the US, it's
about rape, and if it's in Iraq, it's about political theatre and
execution," Mr Noesner says.
When traveling abroad, the key to mitigating kidnapping risk is what
the professionals call "situational awareness" - a good understanding
of where you are and what is happening around you.
Wealthy executives who travel abroad should perform due diligence to
make sure they are aware of customs regulations, local laws and
security arrangements. An array of services exists to ensure that
at-risk travellers have access to good medical care and, if necessary,
a quick way out of trouble.
In extreme cases, a client may require "close protection" - industry
slang for bodyguards. But for most, a quiet investigation into the
handyman's poker habit and a review of methods for disposing of bank
reciepts will have to do.
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