Asset Tracing

There are many tools at the disposal of an asset tracing professional, however; the benchmark is always Open Source Intelligence and Human Source Intelligence (HUMINT).

OSINT

What is OSINT? – Definition: Open-Source Intelligence [OSINT]

Open Source Intelligence is the collection and collation of intelligence from public domain resources. To maximise the utility of OSINT requires a detailed analysis and understanding of the requirements for using it and the all-important search and investigation criteria.

In the intelligence community, the term “open” refers to overt, publicly available [domain] sources, as opposed to “closed” resources, restricted to government intelligence and law enforcement personnel.

OSINT is used by intelligence and law enforcement agencies and expert practitioners alike and subject to local jurisdictional rules and data accuracy, is a necessary and often valuable precursor for an investigation.

OSINT Advantages

One of the biggest advantages of using OSINT is cost, as it is typically less expensive than other more traditional information gathering tools such as surveillance. It therefore offers a potentially greater return on investment, which is particularly relevant for organisations with a limited intelligence budget.

In addition to the cost advantage, OSINT is reasonably easy to access and at a basic level, sources such as social media can be legally and easily shared.

OSINT Disadvantages

While this is a mainstay in the Asset Tracing professional’s armoury, it has its limitations. Whereas it can be easy to amass data, the end product still requires a large amount of analytical work from investigators to validate the accuracy of the findings and can fluctuate significantly between platforms and from country to country.

Another disadvantage is the potential for information overload; filtering genuine intelligence from the ‘chaff’ can be time-consuming and this why leading asset tracing practitioners have developed their own proprietary systems and protocols to automate much of the process.

The biggest limitation of OSINT is that it will not find assets that people have gone to length to conceal. Although a useful start point for any investigation, OSINT typically has to be combined with additional intelligence sources.

BASIC OSINT AIDE MEMOIRE

Jurisdiction dependent, data that can be obtained via OSINT includes:

• Name and Address Searches
• Email and Telecoms
• Associated and Linked Addresses
• Social Media Monitoring
• Credit checks
• Land Registry
• Property Valuation
• Boat Register
• Private aircraft
• Directorships
• International Company Officer Searches
• Specialist Offshore Company Officer Searches
• Open and Historic Litigation
• Bankruptcy and Insolvency
• Deep Web Searches

HUMINT

What is HUMINT? – Definition:  Human Intelligence (HUMINT), or Human Source Intelligence, is the collection of information from people. It is probably the most well-known intelligence collection method deployed by the government intelligence agencies, however; the use of HUMINT in Asset Tracing is also prevalent.

HUMINT in Asset Tracing

Most credible asset tracing practitioners already have established HUMINT networks, however; they typically take years to establish, as sources have to evidence the validity of their information before they can be regarded as a ‘trusted source’.

Most investigations will commence with OSINT and then progress to HUMINT as the investigation becomes more focussed, or greater penetration is required.

The most obvious disadvantage of HUMINT is that people lie and this is why several sources are often used to cross-reference and validate information.

Every form of investigation must comply with local laws and care is required to first ensure complete understanding of local legislation before an asset trace is initiated. Failure to do so would render any information gained inadmissible in court and possibly jeopardise the entire case.

The information which can be obtained within a country varies from jurisdiction to jurisdiction. As an example, company ownership can be checked in the U.K. by searching Companies House, however; no such facility exists in most African countries, where records are mostly held in paper and often with questionable accuracy.

Where complex multi-jurisdictional disputes exist, it is essential to employ an established, professional Asset Tracing firm with a proven track record in the specific jurisdictions of interest.

Transparency of ultimate beneficial ownership varies significantly from jurisdiction to jurisdiction and whereas the ‘owner’ is often known to the other party, proving this is seldom easy.

In some jurisdictions it is possible to obtain information from a corporate registry, however; when offshore jurisdictions are involved things become opaque. Ideally, a lawyer would be instructed to obtain the information from the relevant corporate registry, but secrecy laws in many jurisdictions prevent even this. The reality is that in some cases, it is simply not possible to prove beneficial ownership.

Offshore is typically defined as business activities that take place anywhere else in the world outside of an individual’s own home country, or away from home shores in another jurisdiction, meaning a sovereign territory, country or region within a country, that has its own legal structure and governing body. However, the true definition is commonly misinterpreted. Many such jurisdictions are based on islands, which has brought about the terminology in a literal sense.

The opacity of most offshore jurisdiction makes the burden of “proof” of ultimate beneficial ownership difficult to say the least, which is why many criminals use them to hide their assets. They often utilise numerous trust and corporate structures across multiple offshore jurisdictions to layer and hide ownership.

The main challenge of asset tracing in such jurisdictions is the myriad of data protection and secrecy laws, treaties and legislation specifically designed to secure such assets from being traced, let alone recovered.

An asset-tracing investigation must be costed proportionate to the matter in hand. As a general rule, if the assets recoverable are less than the total cost of the asset tracing investigation and recovery costs then there is no efficacy in commissioning such an action.

The most important consideration in any case is transparency and management of expectation. At Matrix, we always conduct a preliminary investigation, at no cost to the client, so that we can make an assessment as to the likely budget required, jurisdictions involved and likelihood or recoverability. Occasionally, the advice to the client is that it is no financially prudent to pursue a case.

At a very basic level, a general investigative report can start from as little as £750, however; a complex asset trace across multiple jurisdictions can run into a six-figure sum.

On a large assignment it is becoming increasingly common practice to charge a retainer and then agree a commission based on assets recovered.

The time required to conduct an asset tracing investigation is entirely dependent upon the complexity of the case; jurisdictions involved, number of parties etc.

A simple trace could take a matter of weeks, whereas a complex one will run into many months. The truth is that it is often impossible to place a timeline on a case, as there is no way of knowing at the outset how many layers (corporate entities and off-shore jurisdictions) are involved. To use a common analogy; it is a bit like peeling an onion, as you never know quite how many layers remain underneath.

Most investigations commence with OSINT to establish as many data points as possible. Utilising these results, an experienced investigator can develop a prioritised strategy, commencing with those jurisdictions in which assets are most likely to be found and also, crucially, in which they can be recovered. This is particularly important in insolvency cases, where there is typically limited funding available for an investigation.

Asset Tracing is conducted by both lawyers and investigators on behalf of clients; usually jointly. The selection of each should be based upon their expertise and track-record of success in similar cases within the jurisdictions of interest.

Surprisingly, there is no specific law or legislative trade body in existence to monitor the asset tracing profession. Whereas there are many good corporate intelligence firms in the sector, there are also a lot of unscrupulous ones and care should be taken to establish the experience and track record of a company/individual before engagement.

Most intelligence firms will not conduct work on a purely contingent basis. The rationale for this is simply due to the facts that: investigations can be expensive, protracted litigation cases can take years to conclude and the recoverability of assets is inextricably linked tied to the ability of the skill of the client’s lawyer/s.

Most investigations are conducted on a fixed fee basis, however; on large assignment sit is becoming increasingly common practice to charge a retainer and then agree a commission based on assets recovered.