The satisfactory resolution of commercial disputes, or the recovery of the proceeds of fraud and embezzlement, frequently depends on successfully tracing and recovering assets. The location and ownership of those assets are often obscured through complex corporate, nominee or trust structures, and disbursed across multiple jurisdictions.
Asset tracing experts
We have worked for many years with lawyers and insolvency practitioners to recover hidden funds and know how to accumulate data in ways acceptable in court. The challenge is knowing how to turn raw data into clear and reliable evidence.
What is asset tracing?
Asset tracing or asset tracking is a legal process of locating something of value to an individual or company that has been misappropriated. Asset tracing is closely related to fraud or theft where victims lost their assets due to unfortunate events such as scam, embezzlement or theft, and now they want to use this tool called asset tracing to initiate the asset recovery process.
We should always ask this questions:
- What other assets the fraudster had?
- What is the value of the asset?
- What is the ownership structure?
- In what jurisdiction(s) it is located?
- How liquid is the asset?
- What are the chances of a recovery?
Armed with the information, the other directors can now decide:
- Whether to proceed with litigation or not.
- What can they do to protect the assets in the meantime to ensure that it can be recovered?
- What are the requirements for obtaining a freezing injunction even if the asset in question is outside of the jurisdiction?
- What is the process to engage the opponent and encourage early settlement if necessary?
What is involved in asset tracing?
The core of asset tracing is obtaining key information that can benefit our clients who want to recover the assets. Key information can be obtained in a variety of ways, anything from directly assessing public registers, by way of judicial or administrative assistance including but not limited to examining land registry, company register, company records, register of non-profit organizations, court records, tax records, vehicle registration register, criminal records, register of bank accounts, immigration records, border crossing and customs records, to name but a few. Information can also be obtained through private networks, as well as through formal cooperation between our investigators and the relevant authorities.
In cases where publicly accessible information can quickly exhaust its limits, private investigation (often including physical surveillance) is invaluable as it helps to achieve more precise hits; in particular where assets are hidden often using a network of third parties and foreign jurisdictions.
Across Europe, the EU is now requiring its member states to set up or designate national asset recovery offices as national points of contact. These national offices are not only obliged to assist in cases of asset tracing and recovery, but also to exchange information about best practices. With these offices, the EU aims to support other global networks of asset tracing and asset recovery experts.
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Harding Mitchell provides non-financial due diligence investigations, focusing on the track record, reputation, associations and likely integrity of one or more subjects. This type of investigative due diligence – depending on circumstances also referred to as “integrity due diligence”, “ethical due diligence” or “enhanced due diligence” – is critical to understanding the bona fides of a third party.
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