What Is Asset Tracing?

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.

Consider this case that actually took place in England when a business partner suddenly emptied the company business account and absconded abroad. The asset involved was over £1 million in cash. In this particular case, the process of asset tracing is locating and recovering the money that is vital to the survival of the company. When the director-turned-fraudster was tracked down, he claimed to be without money. When our asset tracing team got involved, we provided invaluable intelligence to the other directors pertaining to the followings, allowing them to consider the next steps.

• 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?

Divorce is another common scenario that leads to an asset trace investigation

You are contesting a divorce settlement and suspect your former partner is concealing funds and property from your lawyers. The settlement offered is derisory and will not support you and the children in your custody. What do you do? Take it all on trust and suffer or check out if your partner has more assets than you thought?

Forensic accounting is key to asset tracing and often required in divorce proceedings. When our forensic accountants get involved, we look for any financial discrepancies and establish whether or not a partner is hiding assets from a divorce settlement. During the investigation process, we may also order the disclosure of documentation from third parties and/or request information from another jurisdiction.

What are traceable assets?

Assets are everything owned by a business or an individual. They can be many things: real estate, stocks and shares, possessions, undeclared bank accounts, intellectual property rights, company assets (eg property, plant and equipment), vehicles, livestock, yachts and, of course, money.

To recover any assets hidden in the UK and abroad, you first have to check if they exist and can be found. Otherwise you could be incurring expensive legal fees and unnecessary litigation costs. Asset tracing, put simply, is the identification of property or valuables that clients want to recover through the courts or by negotiated settlement.

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 organisations, 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.

Blackhawk Intelligence asset tracing investigators

To fully embrace the asset-tracing or asset-tracking service, hire a specialist asset tracing agency like Blackhawk Intelligence because we can carry out traces across the UK and EU, eastern Europe, the Middle East, and Asia cost-effectively. We have an internal asset tracing team and we are also backed by a wide network of partner agencies overseas where local knowledge of different jurisdictions is crucial in gaining fast and accurate results.

Wily fraudsters can squirrel away assets around the globe, so investigations have to be thorough, methodical and, of course, legal. Legislation in 2010 tightened up on rules governing what you can and cannot do to gain documents detailing hidden assets. Only in exceptional cases like bank statements are left unattended in the office or home, any deliberate attempt to obtain them via illegal means, such as an illegal download of data from a computer, can be dismissed as wrongful in court.

At Blackhawk, 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.

To cover most situations, we split our tracing operations into five categories:

• UK property: does your partner own a flat that they have just “forgotten” to tell you about you?
• Corporate assets and connections: your debtor could own companies, brands, trademarks, factories, offices, heavy equipment, stock, websites – anything of value owned by a business.
• Related party transactions (RPTs): business deals or arrangements between two parties linked beforehand through ownership, personal or family ties. Most RPTs are straightforward but some are used to misreport accounts and hide funds (eg the huge 2001 scandal involving US energy company Enron which used transactions to misreport accounts).
• Offshore assets and property: does your debtor own (secret) bank accounts, foreign companies, investment funds, property, land, and insurance policies outside their country of residence and thus enjoy often very favourable tax benefits?
• Directorships: researching a seemingly innocuous company position can often reveal a high salary plus share issues and other perks as part of the deal. 

Corporate fraudsters never sleep. They are constantly honing the latest, fast-moving digital manipulation and data processing techniques to hive off more assets than ever before. To counter this, Blackhawk’s dedicated tracing teams rely on speed and accuracy, specialised digital analysts and a vast network of partnerships across the UK, Europe, and globally to secure and realise your assets.

To contact an asset tracing specialist for a free and confidential discussion or simply to understand what asset tracing is and how it could help you, call Blackhawk Intelligence on +44 (0)20 8108 9317 or use the secure contact form on this page.