Asset Recovery Handbook: A Guide for Practitioners

Front Cover
Contents
Acknowledgments
About the Authors
Abbreviations
Introduction
Methodology
How to Use the Handbook
References
1. Overview of the Asset Recovery Process
1.1 Introductory Remarks
1.2 General Process for Asset Recovery
1.3 Legal Avenues for Achieving Asset Recovery
1.4
Recovering Stolen Assets in the Context of Legal Actions Initiated by Foreign Jurisdictions
1.5 Use of Asset Recovery Avenues in Practice: Three Case Examples
References
2. Strategic Considerations in Developing and Managing a Case
2.1 Introductory Remarks
2.2 Gathering the Facts: Initial Sources of Information
2.3 Assessing Legislation and Considering Legal Reforms
2.4 Developing a Case Strategy
2.5 Establishing a Team, Unit, or Task Force, and Conducting Joint Investigations with Foreign Authorities
2.6 Establishing Contact with Foreign Counterparts and Assessing Ability to Obtain International Cooperation
2.7 Securing Support and Adequate Resources
2.8 Addressing Legal Issues and Obstacles
2.9 Identifying All Liable Parties
2.10 Specific Considerations in Criminal Cases
2.11 Case Management
References
3. Securing Evidence and Tracing Assets (1): Investigative Measures
3.1 Introductory Remarks
3.2 Developing an Investigative Plan
3.3 Creating a Subject Profile
3.4 Obtaining Information, Financial Data, and Other Evidence
References
4. Securing Evidence and Tracing Assets (2): Relevant Data and Financial Documents
4.1 Introductory Remarks
4.2
Identifying Relevant Data: Examples from Commonly Sourced Documents
4.3 Organizing Data: Creating a Financial Profile
4.4 Analyzing Data: Comparing the Flows with the Financial Profile
4.5 Garnering International Cooperation
References
5. Securing the Assets
5.1 Introductory Remarks
5.2 Terminology: Seizure and Restraint
5.3 Provisional Order Requirements
5.4 Pre-Restraint or Pre-Seizure Planning
5.5 Timing of Provisional Measures
5.6 Exceptions to Restraint Orders for Payment of Expenses
5.7 Ancillary Orders
5.8 Third-Party Interests
5.9 Alternatives to Provisional Measures
References
6. Managing Assets Subject to Confiscation
6.1 Introductory Remarks
6.2 Key Players in Asset Management
6.3 Powers of the Asset Manager
6.4 Recording Inventory and Reporting
6.5 Common Types of Assets and Associated Problems
6.6 Ongoing Management Issues
6.7 Consultations
6.8 Liquidation (Sale) of Assets
6.9 Fees Payable to Asset Managers
References
7. Mechanisms for Confiscation
7.1 Introductory Remarks
7.2 Confiscation Regimes
7.3 How Confiscation Works
7.4 Confiscation Enhancements
7.5  Third-Party Interests
7.6 Legal Challenges to Consider When Enacting Confiscation Legislation
7.7 Confiscation of Assets Located in Foreign Jurisdictions
7.8 Recovery through Confiscation for the Victims of Crime
References
8. Key Principles of International Cooperation in Asset Recovery and Informal Channels of Cooperation
8.1 Introductory Remarks
8.2
Comparative Overview of Informal Assistance and Mutual Legal Assistance Requests
8.3 Key Considerations for International Cooperation
8.4 Overall Process for Informal and Formal International Cooperation
8.5 Channels for Informal Assistance
References
9. Conducting International Cooperation and Mutual Legal Assistance
9.1 Introductory Remarks
9.2 Mutual Legal Assistance Requests
9.3 Cooperation in Cases of Confiscation without a Conviction
9.4 Cooperation in Civil Recovery (Private Law) Cases
9.5 Cooperation in Asset Return
References
10. Civil Proceedings
10.1 Introductory Remarks
10.2 Potential Claims and Remedies
10.3 Bringing a Civil Action to Recover Assets
10.4 Final Dispositions
10.5 Formal Insolvency Processes
References
11. Domestic Confiscation Proceedings Undertaken in Foreign Jurisdictions
11.1 Introductory Remarks
11.2 Jurisdiction
11.3 Procedure for Beginning an Action
11.4 Role of the Jurisdiction Harmed by Corruption Offenses in Foreign Investigations and Prosecution
11.5 Ensuring Recovery of Assets from the Foreign Jurisdiction
References
Glossary
Appendix A. Offenses to Consider in Criminal Prosecution
Appendix B. Explanation of Selected Corporate Vehicles and Business Terms
Appendix C. Sample Financial Intelligence Unit Report
Appendix D. Planning the Execution of a Search and Seizure Warrant
Appendix E. Sample Document Production Order for Financial Institutions
Appendix F. Serial and Cover Payment Methods in Electronic Funds Transfers
Appendix G. Sample Financial Profile Form
Appendix H. Possible Discussion Points with Contacts-Informal Assistance Stage
Appendix I. Mutual Legal Assistance Template and Drafting Tips
Appendix J. Web Resources
Appendix K. Overview of Lausanne Guidelines
Appendix L. Utilizing an Electronic Case Management System to Improve Management of Complex Investigation
Boxes
Box 1.1 Legal Framework for Asset Recovery
Box 1.2 Other Means of Recovering Assets
Box 1.3 Peru: Vladimiro Montesinos and His Associates
Box 1.4 Zambia: Civil Actions in Tort against Frederick Chiluba and His Associates
Box 1.5 Nigeria: Diepreye Alamieyeseigha
Box 2.1 Role and Contribution of Financial Intelligence Units in Asset Recovery Cases
Box 2.2 Allegations of “Caviar Diplomacy” against European Politicians
Box 2.3 United Kingdom: Register of “People with Significant Control”
Box 2.4 Brazil: The Introduction of “colaboração premiada”
Box 2.5 The Lausanne Guidelines
Box 2.6 Tunisia: Establishment of Coordination and Investigative Bodies for the Case against Ben Ali and His Family
Box 2.7 Malaysia: Domestic and International Coordination in the 1MDB Investigation
Box 2.8 Obstacles to International Cooperation in Asset Recovery
Box 2.9 Uzbekistan: US Jurisdiction over the Gulnara Karimova -Corruption Case
Box 2.10 Equatorial Guinea: Immunities in the Case of Vice President Teodoro Nguema Obiang Mangue
Box 2.11 Brazil: “Foro privilegiado” and the End of Impunity
Box 2.12 Zambia: Liability of Lawyers in the Case of Former President Frederick Chiluba
Box 2.13 Brazil: Identifying Liable Parties in the Lava Jato Case
Box 2.14 Prosecution of Accounting, Records, and Internal Control Provisions in the United Kingdom and United States
Box 3.1 Understanding Connections and Financial Flows: The Use of Shell Companies in the Brazilian
Lava Jato (Car Wash) Case
Box 3.2 Uzbekistan: Beneficial Ownership of Shell Companies in the Gulnara Karimova Case
Box 3.3 Checklist of Basic Information for a Subject Profile
Box 3.4 United Kingdom: Investigative Techniques Applied against Joshua Dariye
Box 3.5 Equatorial Guinea: Civil Society Support in the Teodorin Obiang Investigation
Box 3.6 The Role of the Egmont Group in Asset Recovery Cases
Box 3.7 Considerations Regarding Information Sources to Show Reasonable Grounds or Probable Cause to Obtain a Warrant
Box 3.8 Important Items to Seize in an Investigation
Box 3.9 Documentation to Request from Financial Institutions
Box 3.10 Retention Orders
Box 3.11 United Kingdom: Requirements for Issuance and Execution of Unexplained Wealth Orders
Boc 4.1 Forms and Documents Related to the Wire Transfer Process
Box 4.2 Brazil: Odebrecht’s “Department of Bribery”
Box 4.3 Red Flags in Contracts, Payment Documentation, Payment Records, and Payment Mechanisms
Box 4.4 Nigeria: Red Flags and Controversies in Awarding the OPL 245 Oil Block
Box 4.5 The Moldovan Bank Fraud Scandal
Box 5.1 Nigeria: Asset Freezing and Civil Forfeiture in the Case of a Former Oil Minister
Box 5.2 Drafting Affidavits
Box 5.3 Swiss Federal Council’s Emergency Powers to Freeze Assets Related to the Arab Spring’s Fallen Regimes
Box 5.4 Nigeria: Freezing of Assets in the OPL 245 Case
Box 5.5 Brazil: Freezing of Lava Jato Assets in Switzerland
Box 5.6 Ukraine: Freezing Orders Imposed on Viktor Yanukovych’s Assets
Box 5.7 A Hypothetical Example of Pre-Restraint Planning Decisions
Box 5.8 Peru: Proactive Freezing of Vladimiro Montesinos’s Assets in Switzerland
Box 6.1 France: Agency for the Management and Recovery of Seized and Confiscated Assets
Box 6.2 China: Confiscation of US$14.5 Billion in Assets from Zhou Yongkang and Associates
Box 6.3 Some Confiscation Issues Related to Virtual Assets
Box 7.1 The EU’s 2014 Directive on the Freezing and Confiscation of Instrumentalities and Proceeds of Crime
Box 7.2 Historical Background and Recent Developments in Confiscation Laws
Box 7.3 Malaysia: Civil Forfeiture in the Case of 1Malaysia Development Berhad
Box 7.4 United Kingdom: Guidance on Asset Recovery Powers for Prosecutors
Box 7.5 1Issues in Confiscating the Commingled Proceeds of Crime: A Case Example
Box 7.6 Using “Related Activities” to Capture the Full Benefit of Crime: A Case Example
Box 7.7 Haiti: Presumption of Illicit Origin under the Swiss Restitution of Illicit Assets Act in the Case of Jean-Claude “Baby Doc” Duvalier
Box 7.8 Preventive Confiscation in Italy
Box 8.1 Operação Lava Jato (Operation Car Wash): Collaboration between US, Brazilian, and Swiss Authorities
Box 8.2 The VimpelCom Case: Collaboration among Prosecutors and Regulators from 20 Countries
Box 8.3 Connecting with People: A Case Example from Peru
Box 8.4 Channels for International Cooperation
Box 8.5 Disclosure Obligations: A Barrier to Mutual Legal Assistance?
Box 8.6 Facilitating Informal Assistance
Box 8.7 Law Enforcement Agencies with Investigative Mandates in France, Switzerland, the United States
Box 8.8 International Cooperation for Exposing Corruption Scandals: The Panama Papers
Box 8.9 France’s Central Registry of Bank Accounts: FICOBA
Box 8.10 Spontaneous Disclosures from Switzerland
Box 9.1 Selecting a Legal Basis to Include in the Formal Mutual Legal Assistance Request
Box 9.2 Overcoming Dual Criminality: Illicit Enrichment and Corruption of Foreign Public Officials
Box 9.3 Bank Secrecy and Fiscal Offenses: Prohibited Grounds for Refusing Mutual Legal Assistance Requests
Box 9.4 Avoiding Rejections of Overbroad Mutual Legal Assistance Requests
Box 9.5 Worldwide Provisional Orders in the United Kingdom
Box 9.6 Requirements for Direct Enforcement of Mutual LegalAssistance Requests for Confiscation in the United States and the United Kingdom
Box 9.7 Asset Recovery Pursuant to a Mutual Legal Assistance Request in France
Box 9.8 Global Forum on Asset Recovery’s Principles for Disposition and Transfer of Confiscated Stolen Assets in Corruption Cases
Box 10.1 Case Examples of Actions to Claim Ownership of Assets
Box 10.2 The US Racketeer Influenced and Corrupt Organizations (RICO) Statute
Box 10.3 Compensation for Damages Where Assets Are Misappropriated
Box 10.4 Fyffes Group Ltd. v. Templeman and Others (2000)
Box 10.5 National Iranian Oil Company v. Crescent Petroleum Company International Ltd. & Gas Corporation Ltd. (2016)
Box 10.6 Guinea: Rescission of Contracts for Mining Rights in Simandou Iron Mine
Box 10.7 World Duty Free Company Limited v. Republic of Kenya (2006)
Box 10.8 Examples of Legislative and Administrative Measures Providing Alternative Remedies to Contract Nullification
Box 10.9 Disgorgement of Profits: Practice in the United States
Box 10.10 The Libyan Investment Authority v. Société Générale SA and Others (2016)
Box 10.11 United Kingdom: The Oxford Publishing Ltd. Case
Box 10.12 Circumstantial Evidence Considered in Federal Republic of Nigeria v. Santolina Investment Corp., Solomon & Peters, and Diepreye Alamieyeseigha (2007)
Box 10.13 Requirements for Restraint Orders in France, Panama, and the United Kingdom
Box 10.14 Macao SAR, China: The Ao Man Long Case
Box 10.15 Enforcement of Judgments When the Defendant Is Absent from the Proceeding
Box 11.1 Establishing Jurisdiction Where Limited Acts Have Occurred in the Territory
Box 11.2 Establishing Jurisdiction over Nationals in the United Kingdom and the United States
Box 11.3 Jurisdiction to Prosecute Money-Laundering Offenses in Brazil, France, Switzerland, the United States
Box 11.4 Examples of Information Sources for Confiscation Proceedings Initiated by a Foreign Jurisdiction
Box 11.5 Haiti: Important Role of the Jurisdiction Harmed by Corruption
Box 11.6 Direct Recovery in Practice
Box 11.7 Kazakhstan: A Memorandum of Understanding as the Legal Basis for Establishing the BOTA Foundation
Box 11.8 Nigeria: An Asset-Return Agreement between the United States, Nigeria, and Jersey to Repatriate Assets Stolen by Former Nigerian Dictator General Sani Abacha
Box 11.9
Asset-Return Options in Switzerland: Use of a Memorandum of Understanding in the Abacha Case
Box A.1 Illicit Enrichment Provisions in France
Box F.1 Responses to Wire Transfers That Hide Originating Customer Information
Box F.2 Monitoring Records from Financial Institutions
Box I.1 Mutual Legal Assistance (MLA) Drafting and Execution Tips
Figures
Figure 1.1 Process for Recovering Stolen Assets
Figure 2.1 Standards of Proof in Asset Recovery Actions
Figure 3.1 Five Important Questions to Ask in an Asset Recovery Investigation
Figure 3.2 Sources of Preliminary Information from Government Agencies
Figure 4.1 Basic Cross-Border Wire Transfer Process
Figure 4.2 Sample SWIFT Message Format and Code Interpretation
Figure 4.3 Sample Flowchart of Investigated Networks and Flow of Funds
Figure 4.4 Sample Chart of Relationships and Assets Linked to an Investigation Target
Figure B4.5.1 Carousel Borrowing Scheme in a Fraud Scandal
Figure 7.1 Confiscation of an Asset in a Foreign Jurisdiction
Figure 8.1 Integration of Asset Recovery Phases through International Cooperation
FIgure 8.2 Flowchart of International Cooperation in Asset Recovery Cases
Figure 8.3 Informal Assistance and Formal Mutual Legal Assistance Requests: What Can Be Requested?
Figure 9.1 Flow of an MLA Request in the Presence of a Treaty or Domestic Legislation
Figure A.1 Criminal Charges to Consider for Asset Recovery
Figure F.1 SWIFT Serial/Sequential and Cover Payment Processing Methods
Figure L.1 Core Tabs for Investigative Case Files in Excel
Figure L.2 Sample Front Sheet for a Case File
Photo
Photo 6.1 High-Value Vehicles, Rapidly Depreciating in a Police Yard
Tables
Table 2.1 Criminal Charges to Consider for Asset Recovery, by Category
Table 2.2 Key Evidentiary Challenges in Establishing the Elements of Selected Criminal Offenses Pertaining to Asset Recovery
Table 5.1 Considerations in Partial Control or Limited Restraint of an Asset—For
Example, a Hotel
Table 8.1 Differences between Informal Assistance and MLA Requests
Table L.1 Sample Investigation Log
Table L.2 Sample Standard Format for a Subject Profile
Table L.3 Sample Subject Profile Data from Social Media and Other OSINT Sources
Table L.4 Initial Financial Data to Include in Subject Profile
Table L.5 Sample Standard Format for a Financial Profile
Table L.6 Sample Format for Calculating Value of Assets in Subject’s Financial Profile
Table L.7 Sample Format for Liability Calculation in Subject’s Financial Profile
Table L.8 Sample Income Data in Financial Profile
Table L.9 Sample Expenditure Data in Financial Profile
Table L.10 Sample Format for Calculating Change in a Subject’s Net Worth
Table L.11 Sample Preliminary Evidence Matrix
Table L.12 Sample Extension of Evidence Matrix, Listing Key Evidence by Element
Table L.13 Sample Standard Format of Exhibit Register
Table L.14 Sample Event Timeline Format
Table L.15 Sample Format of Persons and Companies of Interest Lists
Table L.16 Sample Items to Include in a Case Closure Check Sheet
Table L.17 Information for Inclusion in “Lookup” Tab