Asset Tracing and Restoration


What sort of corporations and instances does K2 Integrity work with? 

Our core shoppers have at all times been regulation corporations, and this has not modified. Nonetheless, the rise in litigation funding has seen the asset restoration market change to an extent. With out funding a case typically doesn’t get off the bottom, so relationships with these funders is important for us. Current years have additionally seen an increase within the variety of hedge funds transferring into the litigation market and commoditising arbitral awards. By viewing these awards as tradeable property and recognising them as an asset class which may supply very excessive returns on funding, they’ve opened up new alternatives for investigators.

A giant a part of this market is the enforcement of awards in opposition to sovereign states and these instances have at all times shaped a big a part of our apply and proceed to take action. Exterior the normal authorized centres of London and New York the place we proceed to do quite a lot of work, at K2 we’ve traditionally had a robust presence in Geneva and have additionally expanded our presence within the Center East up to now two years and opened workplaces in Abu Dhabi and Riyadh. This can be a key development marketplace for us, as we’ve seen firms within the Center East reveal a higher willingness to pursue debtors exterior the jurisdiction and interact investigators to assist recuperate their funds.

At what stage ought to legal professionals first name within the investigators and why? 

I feel there’s now a higher understanding of what investigators can supply when it comes to asset restoration and a willingness from legal professionals to have interaction with them early within the course of. There are broadly three levels of a case the place investigators will be launched: pre-litigation, mid-case and post-judgment.

Earlier than launching a authorized case there’s typically advantage in figuring out your potential adversary’s property, or indications of property which may be confirmed by means of additional investigative work or authorized discovery. An investigator’s report at this stage may also help you to evaluate how advanced the opposite facet’s asset holdings are and the way properly ready their defences are. For instance, it might be discovered that your opponent holds most of their property in much less enforcement pleasant jurisdictions, or that they have an inclination to make use of offshore entities to masks their pursuits. This may be essential intelligence for creating your authorized technique. An investigator’s report at this stage may assist in acquiring funding for the case, and we regularly work with regulation corporations to offer them with an preliminary report or asset map that types a part of their submission to funders.

When authorized instances are underway, investigators can help in additional identification of property, but in addition importantly monitoring identified property for proof of dissipation. Good investigators know what to verify for in such situations, searching for the motion of property into extra advanced constructions, the names of proxies, or different approaches reminiscent of “sham” divorces designed to thwart collectors. Investigators may present verification of asset disclosures throughout proceedings – the invention of false or deceptive info generally is a highly effective weapon for legal professionals.

In a publish judgment state of affairs, it’s possible you’ll discover that the opposite facet is reluctant to pay. The debtor could also be protected in a jurisdiction which is unwilling to recognise your judgment. On this occasion, investigators may also help result in speedy resolutions by figuring out property that may create leverage. For instance, a non-public jet owned by the topic could also be discovered to have landed in an enforcement pleasant jurisdiction. Seizure might create embarrassment and an obstacle to each day life or enterprise operations that brings the opposite facet to the negotiating desk.

What are the primary levels in an investigator’s response?

Typically, shoppers method investigators with a set of predetermined necessities which they consider will help them in resolving a problem or in advancing their authorized declare. This may typically embody a requirement to focus solely on sure jurisdictions, which will be difficult for investigators as whereas the underlying asset, reminiscent of property, could also be in a single jurisdiction, the company construction by means of which this property is owned can typically cross a number of jurisdictions.

The primary job is to obtain the total context on the shopper’s challenge, and to completely perceive what the shopper is seeking to obtain. We search to acquire all the knowledge already gathered by the shopper and put together a bespoke technique, weighing up the prices versus the advantages of any proposed method and seek the advice of the shopper on probably the most cost-efficient solution to obtain desired outcomes. Along with advising shoppers on the very best plan of action, it’s important to be candid with shoppers in advising in opposition to sure actions, which might probably be ineffective and even counterproductive.

In most issues, the very best outcomes for shoppers are achieved by means of investigators and legal professionals working intently collectively to develop, or assist, a transparent authorized technique. We should be properly versed in working throughout a variety of jurisdictions, perceive that investigations can evolve quickly, and have the expertise and know-how to have the ability to revise methods and meet altering necessities at any level of an investigation.

That are probably the most helpful instruments or know-how accessible to maximise the probabilities of success? 

There are a number of proprietary databases and AI know-how which might be changing into more and more superior and intuitive. This know-how is an important device for investigators to streamline and automate open supply and public report analysis. Nonetheless, even with entry to an array of high-quality databases and information repositories, human enter continues to be paramount to attract out all related connections and to maximise the effectiveness of open-source analysis.

For instance, investigators can automate searches throughout on-line company information archives, considerably slicing down time wanted to map a topic’s company footprint. Nonetheless, finishing and validating this analysis typically requires the next retrieval of the unique company filings from the official supply.

In a single earlier case, we had been instructed by a shopper to establish the worldwide asset footprint of a public official believed to have acquired substantial property exterior of their dwelling nation by means of bribery and corrupt schemes. We had been in the end capable of join the topic to ill-gotten property – a worldwide portfolio of excessive worth actual property – by means of in-depth evaluation of social media profiles belonging to the topic’s household. Preliminary evaluation and connection mapping was made simpler by the know-how at our disposal. Then, by means of additional evaluation we had been capable of establish a community of nominees utilized by the topic to carry the actual property on their behalf, obfuscating the connection between the topic and these high-value property. The hyperlink between the topic and these properties didn’t exist in official information and it wanted an investigator to construct on the knowledge offered by the know-how.

Past the know-how, having specialists in-house is important to our method. You can not attend a convention on asset restoration now with out the phrase ‘crypto’ being talked about. As we’ve seen with drug taking in sport, criminals are sometimes on the forefront of innovation and a few steps forward of the authorities, leaving investigators, legal professionals and regulation enforcement taking part in catch up, even with regards to laws. At K2, we now have crypto professionals in-house. This functionality and true understanding of the know-how and methods it may be used are important to our investigations.

What challenges can happen when looking for or acquiring details about property and implementing their restoration? 

One of many greatest hurdles we face as investigators will be proving that the topic of any set of authorized proceedings is the true beneficiary of the property that we’ve recognized. It might be the case that we’ve a number of items of knowledge pointing to possession by the topic, however legally talking that individual is probably not the “paper” proprietor of the asset. People can go to nice lengths to obfuscate their hyperlinks to property. Widespread methods right here embody utilizing proxies to carry property on belief, using nominee shareholders and administrators and likewise counting on the secrecy that surrounds possession of entities registered in offshore jurisdictions. Solely lately, a small variety of company registries in these jurisdictions have begun releasing the small print of firm administrators.

Nonetheless, that is so far as most offshore jurisdictions will go. Particulars of company possession usually stays opaque, regardless of numerous governmental efforts to enhance this. For example, if an abroad firm owns property within the UK, there’s now an obligation for these corporations to register particulars of their UBOs with Firms Home. This generally is a highly effective device, however typically corporations are capable of declare trustees or additional offshore corporations as their UBOs. As such, skilled investigators are nonetheless required for artistic methods to unravel counterparties’ makes an attempt to cover their property.

How ought to investigators overcome the jurisdictional points which might be typically related to asset tracing?  

Asset tracing is usually a worldwide train. We hardly ever see instances the place a topic has all their property situated in a single jurisdiction. It subsequently turns into a problem to litigate in opposition to a topic in a single place, figuring out that they’ve helpful property elsewhere. As investigators, we are going to at all times search to achieve a holistic image of a topic’s asset portfolio. Limiting analysis and assets to the jurisdiction the place authorized proceedings are being introduced is counterproductive as there isn’t a assure any property might be discovered there, or that we are going to establish enough property to cowl the quantum sought.

Thus, we undertake international asset tracing investigations adopted by an evaluation of these property which can usually deal with jurisdiction, sort of asset and asset worth. Thereafter, deciding which property to pursue is determined by the place the proceedings are happening, the situation of property and the technique of the authorized crew. There are some jurisdictions the place recognising authorized proceedings from a international court docket is extra simple than others. Property in these locations could also be extra enticing prospects to pursue for restoration. There are additionally some jurisdictions the place statute dictates how home courts can help with info requests from international proceedings, for instance Part 1782 of Title 28 of the US Code (Help to international and worldwide tribunals and to litigants earlier than such tribunals). It stays the case that there’ll at all times be jurisdictional challenges with regards to asset tracing, however that essentially all good asset restoration methods depend on a detailed working relationship between artistic investigators and savvy authorized groups.

Are you able to focus on any current examples or case research during which K2 Integrity assisted an organization? 

We now have labored on quite a lot of difficult company disputes over the previous 12 months however two good examples of wide-ranging investigations spring to thoughts. Within the first case, we had been engaged by a European telecommunications firm to analyze a number of individuals who had acquired funds ensuing from a multimillion Euro fraud undertaken in opposition to our shopper. By means of evaluation of public information together with property paperwork, planning purposes, firm filings and genealogical info, we had been capable of set up that the beneficiaries of the fraud had been a part of a fancy community of relations and associates who had an extended historical past of conducting related frauds. Our proof was essential in demonstrating the conspiracy between individuals and aiding with the liquidation of entities concerned within the fraud.

In one other current matter, we assisted a Center Jap funding group by tracing the worldwide property of two individuals to assist the enforcement of a multimillion-dollar authorized judgment. We efficiently uncovered roughly USD 65 million of property managed by the themes together with offshore entities that held shares in public corporations, helpful European properties, and a household workplace with substantial investments. In a single occasion, we situated a well-hidden residence owned by one of many topics by means of examination of historic French cellphone books. Our findings vastly helped our shopper with their enforcement technique and led to a number of referrals for additional investigations.

What does a profitable final result appear like, what are the largest hurdles you face to a profitable final result, and the way can they be mitigated? 

In asset tracing, success primarily entails the presentation to our shopper of well-evidenced management of property by the topic of our investigation, in addition to a sign of the worth and any encumbrances of these property. Ideally, this permits our shopper to freeze property, implement a judgment or apply stress to deliver events to the negotiating desk. The place management of property is just not instantly clear, we could possibly present intelligence concerning the place property could also be uncovered by means of both additional investigation or focused authorized actions reminiscent of disclosure. This might embody, for instance, acquiring commentary by a former affiliate of the topic that they typically boasted about having cash stashed in offshore financial institution accounts, or surveillance displaying frequent visits to a specific accountancy agency.

Typically one of many greatest hurdles we face is that our shoppers could also be reticent to threat “throwing good cash after dangerous” by commissioning an investigation after they have already skilled a monetary loss, or the profitable final result of their authorized proceedings is just not assured. To mitigate this, we regularly suggest a step-by-step method the place we offer investigative phases with particular person budgets. An preliminary part might reveal that there are property which are literally or doubtlessly accessible, or it might reveal that the topic is being sued by a number of different events, is struggling financially, and any property are prone to be in unfavourable jurisdictions. By taking this phased method, we assist our shoppers management prices and assist them keep away from committing to giant budgets on the outset. We keep open dialogues with our shoppers all through investigations and maintain discussions on the finish of every part, the place potential methods for subsequent steps will be determined or concluding that additional investigation or beginning expensive litigation is just not worthwhile.

About Tom and K2 Integrity:

My title is Tom Stanley and I head the asset tracing apply at K2 Integrity. This apply, headquartered in London, consists of a specialist crew who work solely on asset tracing initiatives. We consider that having a core, skilled crew of senior investigators is essential in understanding the mechanisms by means of which individuals conceal property and offers our shoppers the very best probability of environment friendly restoration.

Jules Kroll, our founder and chairman, constructed the corporate on main asset tracing investigations, and is the daddy of the fashionable investigations trade. He carried out corruption investigations and asset searches in opposition to main figures together with Saddam Hussein, Ferdinand Marcos, “Child Doc” Duvalier and Arap Moi, amongst others. Our fashionable asset tracing apply follows this legacy, working for quite a lot of sovereign states, main firms, regulation corporations, and high-net-worth people.

We construct investigative groups round every case with assist from our in-house specialists all over the world. These embody jurisdictional specialists, former prosecutors, legal professionals, senior authorities advisors, regulators, regulation enforcement and intelligence professionals, forensic accountants, investigative journalists and know-how and crypto specialists. 

Tom Stanley
Managing Director, K2 Integrity
fifth Flooring, Cunard Home, 15 Regent Avenue St. James’s, London SW1Y 4LR
Tel: +44 (20) 7016-4215
Electronic mail:


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