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Ex-Drug Smuggler Turned Data Miner Reclaims Field He Created - Bloomberg

Hank Asher -- high school dropout, cyber pioneer, friend to law enforcers, enemy to child predators, nemesis of privacy advocates, ex-cocaine smuggler -- is back in the business of finding almost everything that’s known about anyone in the U.S.

Law enforcement applauds Asher for his help in catching child-predators. Defenders of privacy may regard the latest version of his system to search databases and collate the results as a menace, as they did his anti-terror Matrix system developed during the Bush administration.

Rival companies including Reed Elsevier Plc’s LexisNexis Risk Solutions unit also may be paying attention, since on his way to making almost half a billion dollars Asher invented products they sell.

He is “kind of a legend,” said Greg Lambert, who co-founded a legal-tech blog and runs the library for the Houston office of the law firm King & Spalding LLP. “He makes a product, puts it out, sells it, waits for the non-compete to end, then comes up with another product.”

His new business is his last venture, Asher said, so he named it TLO Inc., The Last One.

Asher’s field is data fusion, the collecting of bits of information about people and businesses from thousands of data bases and linking them to create a previously unseen mosaic: typing in three Zip codes and getting a list of people who’ve lived in all three, where they work and what they drive, for instance.

‘Best I’ve Seen’

“He is the best I’ve ever seen at being able to spot and utilize relationships between vast data bases,” said Bruce Barrington, who created Clarion, the computer language used in Asher’s early products. Barrington, now retired, was on the board of a previous Asher company.

Asher, 60 and freed of a non-compete agreement with Reed Elsevier, buyer of his last invention, said he and his staff are revolutionizing the field he created with a system that “changes all the rules.”

Its only possible rivals are the companies that bought his previous data tools, Thomson Reuters Corp. and Reed Elsevier, he said.

Through their spokesmen, Nicholas Ludlum for LexisNexis and David Girardin for Thomson Reuters, the companies declined to discuss Asher or TLO.

Asher unveiled AutoTrack, now called Clear and owned by Thomson, in 1992. Accurint, now at LexisNexis, came along in 2001. They were considered “magic” in their day, Asher said.

Trillions of Records

The latest product, TLOxp, with “trillions of records,” is faster, more comprehensive, more accurate and able to answer harder questions than the earlier ones, he said. Its customers are professionals such as lawyers, insurers, collection agencies and private fraud investigators.

Nothing surpassed Accurint until now, said private investigator Kelly Riddle in San Antonio. For instance, he credits TLOxp with helping him find a fraud suspect who had a German last name.

Riddle used TLOxp to search for that name and others that sound like it. If he had punched in Weiss, TLOxp would have also searched for Vice. The man was using an Americanized phonetic spelling of his German name. Bingo.

The investigator said he has 20 to 25 search products and mostly uses TLOxp.

The system can find everyone within a certain age range who lived in two neighborhoods and has a personal or professional connection to someone named, say, Ann, according to Asher.

Phones, Gun Permits

It can link people to their mobile-phone numbers, liens, cars, professional licenses and gun permits. It can tell you who tried to use your Social Security number and where that person claimed to live.

Anything you’ve posted without privacy limits on a social media site like Facebook might wind up there, said TLO’s chief privacy officer, Martha Barnett, a partner at the law firm Holland & Knight in Tallahassee, Florida.

Feed it three Zip codes and it lists people who have lived or held jobs in all three, a demonstration showed. That might help insurance investigators looking into similar frauds in different cities, for example, said James Reilly, TLO senior vice president for new accounts. A law firm might learn whether a prospective client can pay a bill or has a conflict with a current client.

The technology largely springs from the system Asher and his team created to hunt criminals. He has helped find suspected child molesters and other criminals such as the D.C. sniper.

Hates Bullies

A self-described bully-hater, Asher said he’s driven by the beatings his father gave him, beginning when he was a toddler. As an adult, he has put business on hold to channel resources into identifying a child’s killer and searching for terrorists.

Asher, with brownish hair he cuts himself, graying beard kept closely cropped, wide girth and ruddy complexion, chain chews Nicorette gum a dozen years after he quit smoking.

“I think he has a suit,” said Bob Butterworth, former Florida attorney general now a lawyer on retainer with TLO as a prosecution and government-relations specialist. He said he once gave Asher socks for Christmas and hasn’t seen them since.

Thrice married and thrice divorced, Asher wears khaki pants, deck shoes and a knit golf shirt -- usually pink -- bearing the TLO logo. A bathroom off his office has a shower and a rack of mostly identical clothes.

He runs his company from a 143,000-square-foot concrete and glass building in Boca Raton, Florida, office park. A police car is always parked in front for security, paid for by the company.

Unfinished Feel

With 250 people in work space 2 1/2 times the size of a football field, the place has an unfinished feel. Much of it lacks furniture and people. He foresees growth, he said, and has an option to lease another 500,000 square feet.

Preliminary versions of the new product have been available for months to targeted industries. Asher said he expects TLO to have a market capitalization of $1 billion in two years.

TLOxp came out of initial development in May. With upgrades in the works, Asher won’t say when he’ll consider it ready for the “marketing blitzkrieg” he plans.

The company had 17,700 customers as of Sept. 7 who pay 25 cents for a simple search and as much as $5 for advanced reports, according to its website. They are mostly fraud and corporate security investigators, law offices and collection agencies, Asher said.

His journey to riches, poverty and rebound started in Valparaiso, Indiana, where he was 2 or 3 when his father, now deceased, began beating him with fists, he said. He left home at 16 as well as school, where he “felt like a caged animal from first grade on.”

Job History

From then to 40, Asher said, he was a draftsman, an Indiana house painter, a Florida condominium painter, owner of a condo painting company and a retiree at 30 after selling the business. He bought places in Belize and the Bahamas.

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He said that in 1982 he was living in an area in the Bahamas where American “rascals” who weren’t otherwise criminals were flying and boating cocaine into the U.S. for Colombians, making more money in a night than they would otherwise in a year. Asher said he had refused such offers countless times until “I met these older guys who were very socially acceptable.” Asher said he wanted to “socially get in with this group” and didn’t believe cocaine was dangerous, as he does now.

Smuggling Scare

The Colombians began to scare him, he said. After seven weeks as a cocaine pilot and with the help of a neighbor in the Bahamas, famed lawyer F. Lee Bailey, Asher presented himself to U.S. drug agents, who knew nothing about his activities, he said. Asher said he persuaded U.S. pilots to get out of the business. He was never charged and said he regrets smuggling drugs.

A few years later, broke from big spending and bad investing, he took up computer programming, he said.

The undereducated Asher began collecting data bases, an odd endeavor in those days. This was 1992, in the predawn of the contemporary Internet, four years before two Stanford University graduate students started work on Google.

Asher heard that, to take advantage of a new Florida law, an insurance man needed a way to find insured roommates of uninsured motorists who’d been in collisions.

Early Search Tools

Asher bought Florida car registration information from the state and learned to slice up content electronically and link the pieces.

Eventually, he made it possible to get a dossier on almost any American.

Data fusion wasn’t exactly new in 1992. Academia had been working on theoretical models for decades, and the U.S. military was using it in the field.

Asher took it to a new level to make tools useful to the private sector, said Auroop Ganguly, a senior researcher at the Oak Ridge National Laboratory in Tennessee who has written about data fusion.

Barrington said Asher’s “biggest insight was the fact that you could really start to gain information about somebody from a whole lot of data bases that no one had ever thought about using together.”

The hard part, he said, was to “normalize” data from different sources so the system knows, for example, whether the Bruce D. Barrington on one data base is the same one that’s on another.

Insurers, Police

Asher sold his systems to insurers, financial services firms, the police, lawyers, reporters, private investigators and, for a time, marketers.

He twice formed companies to sell his products, only to be kicked out or leave after internal fights, he said.

The first creation, AutoTrack, took him seven months to develop. He set up Database Technologies Inc. in 1992 to market it, became chief executive officer and borrowed from his brother to expand.

Five years after he incorporated the company that became DBT Online, directors stripped Asher of his management role. He left the board the next year and sold his shares in 1999, the exact circumstances depending on whose version you believe.

Gary Erlbaum, then a DBT director, said the Federal Bureau of Investigation and the U.S. Drug Enforcement Administration were alarmed on hearing of Asher’s past drug smuggling and threatened to cancel their contracts if he kept his shares.

Stock Sale

Asher said he was unhappy over poor management and couldn’t sell fast enough.

Either way, the stock sale gave Asher his first nine-digit windfall: $148 million. Counting both cash-outs, he grossed $461 million for himself and his family, he said. Database Technologies was bought by ChoicePoint Inc. for $462 million in 2000.

He wasn’t out of the DBT’s door when he started work on his next venture, which became Seisint Inc. and marketed Accurint. ChoicePoint sued, accusing Asher of violating his non-compete agreement. That was met by a countersuit for defamation and interference with his business pursuits.

Those cases and related ones were settled on confidential terms. A statement announcing the accord said the parties agreed that “Hank Asher engaged in no wrongdoing.”

It isn’t clear how much, if at all, the competing companies’ earnings might suffer if TLO takes business away from them, said Claudio Aspesi, a London-based media analyst who covers both companies for Sanford C. Bernstein Ltd.

Small Pieces

Investigative data tools are a “small part of the total” business of the diversified Reed Elsevier and Thomson Reuters, he said by e-mail. “Neither company breaks down their businesses at this level of detail.”

The Sept. 11, 2001, World Trade Center and Pentagon attacks pushed Asher and Seisint into a new mission: Build a way to find terrorists on U.S. soil.

Within days of the attacks, he went to work writing computer code and setting up secure workspace at Seisint for agents. By Sept. 17, Asher said, he had 419 names of U.S. residents with characteristics giving them a high “terrorist quotient,” a measurement he invented.

Asher’s list included “a number of persons” already of interest to the FBI, said Salvador Hernandez, then a Miami-based FBI agent.

The Boca Raton work area was soon bustling with counter-terrorism agents, said Hernandez, now the owner of a private-investigations firm.

Sniper Killings

In 2002, when the Washington suburbs were terrorized by seemingly random sniper murders, investigators “reached out to Hank” whose system played “an important role” in eliminating false leads and identifying the right target, John Allen Muhammad, Hernandez said.

Privacy advocates helped kill one of Asher’s anti-terrorist inventions, calling it too invasive, too quick to taint the innocent and crammed with data too sensitive to be entrusted to a private company and data exchanges among states.

After a 2003 demonstration for Vice President Dick Cheney of the system, a multistate information-sharing tool called Matrix, Asher won a promise of $8 million in federal funds to support it and cover part of the development cost. The American Civil Liberties Union objected.

“Our concern was that they were creating a pattern to describe people who should be investigated by law enforcement when there was no evidence that people had done anything wrong,” said Chris Calabrese, ACLU legislative counsel.

Seisint Argument

Seisint argued that Matrix simply sped the gathering and analysis of information already available to law enforcement. The civil liberties group said it posed a danger.

“Creating a program to combine separate, independently available databases of information on innocent Americans is not merely a ‘technological advancement,’ but a body blow to the core American principle that the government will leave people alone unless it has good reason to suspect them of wrongdoing,” the organization said in a 2004 report.

States that planned to join pulled out. Federal funding ceased in 2005.

Asher said the ACLU unfairly characterized his work. He understands his responsibility to protect sensitive information, he said.

“If you’re using data for a good purpose, I don’t think people will object to it,” he said.

Law Enforcement

TLO’s law enforcement program began taking shape in 2008. Asher was bound by a non-compete agreement with LexisNexis, which bought Seisint in 2004 for $775 million. The agreement allowed him to work for the nonprofit National Center for Missing and Exploited Children, where he’s a board member and according to the center a donor of more than $10 million.

TLO has signed up almost 88,000 investigators and prosecutors in 50 states and 39 countries who use the service for free, the company said.

Different levels of access are open to different users based on the law and TLO policies, said Barnett, the privacy officer. For instance, federal law lets a corporate security officer investigating embezzlement get more personal information than human-resources department can to verify where a would-be hire lives.

Barnett said TLO has built in systems to protect privacy. There is “a recognition of how powerful this data is, and that we want to honor people’s privacy to the extent possible,” she said.”

TLO does background checks on prospective subscribers and audits searches to make sure people use its tools for legitimate purposes, Asher said. Spying on ex-spouses isn’t allowed.

“I am more restrictive than the law is,” he said. “Make that ‘much more restrictive.’”

Child Pornography

When used by law enforcement, the system can often detect who has been viewing, distributing and creating child pornography and where they live, according to Asher.

It looks for the worst offenders: those with the largest cache of images, or with online manuals on how to have sex with infants, or with fresh videos of children being raped, or with youngsters living near or in the home. It knows who distributes the material.

After getting evidence for a search warrant, officers can slip a TLO disk into a suspect’s home computer and tell immediately whether and what child pornography is there. It would otherwise take six to 12 months to send the hard drive to a lab and get results, said Greg Schiller, a Palm Beach County, Florida, prosecutor who works full time at TLO’s offices.

“We leave the house with the images and the bad guy in hand 95 percent of the time,” Schiller said.

Investigators can “monitor the Internet activity” of suspects, Asher said, declining to give specifics he said might compromise security.

Net-Use Monitoring?

Asked whether the commercial version allows TLO’s private customers to monitor the Internet activity of third parties, Asher paused.

“That leaves a bad taste in my mouth to think of it that way,” he said.

But could it?

“There is no way that we would use that tool for a commercial purpose,” he said.

Since the Matrix controversy, the privacy debate has refocused on questions such as whether retailers and marketers should be free to track Internet shopping.

That isn’t what TLO does, so Asher and Barnett aren’t especially concerned about legislation to regulate it, they said.

If Asher is well-known to some privacy advocates, TLO isn’t. Calabrese of the ACLU and John Verdi, senior counsel to the Electronic Privacy Information Center in Washington, said they don’t know about the new product and couldn’t discuss it.

Data-Based Anxiety

“Many folks would look at a huge data base and the nature of intelligence gathering and would be uncomfortable that this sort of information is being collected and retained without their knowledge,” Verdi said.

After leaving Seisint and while still bound by the non-compete agreement, Asher spent his time and wealth caring for his sister and seeking a cure for her cancer, multiple myeloma. She lived five years longer than her initial prognosis of 18 months. Asher’s creative ideas helped extend her life, said Les Wold of the Mayo Clinic Health System, one of her doctors.

When Sari Asher Zalcberg died in October 2007, Asher considered buying a 300-foot yacht and moving to the South Pacific, he said. He reconsidered.

“I thought about the years when I was not productive, and they were not happy years,” Asher said. “I thought about how I would feel if there was a terrorist attack and I wasn’t in the game.”

He realized, he said, that if he didn’t go back to work, “I would die a very unhappy old man.”

That January, he started setting up TLO.

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