The first step toward recovering stolen and/or undisclosed assets begins in Interfor’s research department. Our experience has shown that the quickest and most cost effective way to approach an investigation is to first examine all the information available in the public domain. Interfor’s researchers have in house access to over 2,000 databases worldwide which allow them to comb the public record for clues and intelligence. All leads are then followed with a field investigation.
The next step in the investigative process is to take a close look at the lifestyle of the subject, including an examination of his or her spending habits, relationships, investments, property, and other financial dealings. To start, Interfor’s investigators examine how well a subject meets his or her monthly financial obligations. If a person is spending money, but appears to have no source of income, chances are the funds are hidden in offshore bank accounts. In addition, investigators search for litigation history involving the subject or his or her businesses. Often times, assets may be found attached to a judgment that would not be listed elsewhere. Assets belonging to a subject’s family, or corporations associated with the subject, are also inspected.
By utilizing the techniques described above, and other investigative tools such as pretext interviews, Interfor’s investigators can begin to piece together a roadmap leading toward the hidden assets. However, it is not uncommon for the investigator to encounter roadblocks along the way. In order to circumvent these obstacles, Interfor works simultaneously with attorneys and forensic accountants to build legal remedies to ultimately freeze assets and demonstrate a nexus between the assets, the debt, and perhaps a fraud. Using a combination of investigative services, like those offered by Interfor, and the instruments available through the courts, companies, creditors and victims of fraud can recover the assets they once believed they would never see again.
In the wake of the recession, huge financial frauds are being uncovered on a daily basis. Some of these cases have already gone to trial, including the case involving financial advisor, Bernard Madoff. Madoff was recently sentenced to 150 years in prison for his Ponzi scheme which defrauded his investors out of billions of dollars.
What happens now to the victims of these frauds? There will be judgments and restitution orders, but they rarely help victims to recover their losses and the funds that are recovered may take years to distribute. According to some veteran receivers, it may take as much as 15 years to distribute any funds recovered from Madoff.
There are steps that can be taken to recapture any remaining funds from these frauds, however, which were most likely secreted abroad. In English common law countries, for example, there are pre-action discovery vehicles that can be used to gather information to help identify wrong-doers and ways to freeze assets prior to obtaining a judgment. Being able to freeze assets prior to a judgment is critical, as obtaining a judgment without freezing the assets merely tips the fraudster off and allows time to move the funds again.
Other countries that are used as havens for fraudsters are also starting to reform their laws and judicial processes to make it easier to track down and recover ill-gotten assets. One such country is Indonesia, which is currently working on a bill which would allow immediate confiscation of assets obtained illegally. Indonesia is being supported by the international community in this effort and is a member of the International Organization of Supreme Audit Institutions along with the U.S. and the U.K.
With help from experienced investigative and legal counsel, asset recovery is a real possibility. And while it takes time, it may be a much better option than waiting for years for funds from restitution orders to arrive.