News Updates

Now More Than Ever, Asset Searches Are Vital

New York, February 2009—The bad financial news proliferates. Bad times have replaced boom times. The credit crisis and con artists have killed the golden goose. Some of the world’s largest banks are on life-support from the U.S. Treasury, the Federal Reserve, and Congress. Banks in Europe and Asia are also reeling; their governments are propping them up.

A concerted effort is afoot by the leading industrial nations to avert a worldwide depression on the scale of the one precipitated by the Crash of 1929. Besides banks, investment firms, and insurance giants losing billions, individual investors have suffered horrendously. Many have lost everything: their entire net worth, including homes and other hard assets, as well as their entire IRAs, 401Ks and similar types of retirement accounts, sometimes in collective and institutional funds set up for this purpose. College endowments have incurred huge losses. Charitable trusts have been wiped out.

As in any crisis blame abounds. A theory exists that the entire free-market financial network is one gargantuan Ponzi scheme. Proponents of this theory regard the sub-prime mortgage lenders and the investment bankers who securitized their loans as collaborators in this monstrous fraud.

News stories describe efforts by federal agents to locate investment broker Bernie Madoff’s records, including sorting through cartons of files at a Bronx storage warehouse. These agents are trying to find records that indicate where any remaining assets have been hidden. A number of lawsuits—both individual and class action— are being initiated every day against investment firms and financial advisers who lost their clients’ money by investing, either directly or indirectly, in schemes like Madoff’s.

Knowledgeable bankruptcy law firms are doing a landslide business filing these lawsuits and to find assets squirreled away by fraudsters. When it comes to winning real compensation for their clients, the success or failure of these lawsuits will depend on one thing above all else: the effectiveness of the asset searches.

International private investigation firms, hired by the law firms, take the lead in finding hidden assets. In today’s complicated international financial network only a small number of elite investigation firms with global reach and a cadre of seasoned experts can do the job right. They employ former military and diplomatic officers, intelligence operatives, police detectives, forensic accountants and auditors, and investigative journalists. Such work is conducted at high levels where discretion is the guiding principle and secrecy and privacy are hallmarks of their methods. Ideally the subject of any investigation should be oblivious of its existence.

Equally, these firms know how to work hand in glove with their clients once the assets have been uncovered. It is pointless to conduct an asset search prior to setting up a mechanism to rapidly seize or freeze the discovered assets. Sometimes an injunction is required in the local jurisdiction; this has to be in place in advance of making any move.

Money today moves around the globe at warp speed, and can easily outmaneuver slow and costly legislation. The investigation firm must know local laws and customs around the world, most especially in the Cayman Islands, Channel Islands, Liechtenstein or Luxembourg. Corruption often poses a huge obstacle. Care must be taken. Convoluted money trails require expertise to track and experience to unravel.

An elite international investigation firm provides its clients with vital amounts of information. Such top firms always require clients to provide as much existing information as possible. Then the firm will do an initial analysis to prevent giving the client false hope: Good firms undertake only viable searches with a solid chance of succeeding.

A thorough international asset search can be costly because documenting money transfers and the like is expensive. Expenses are reduced and the chances of success enhanced by having the entire mechanism needed for asset recovery in place before the actual tracking down and isolating of the assets begins. Preparation counts. Reputable investigation firms discourage clients from commissioning a hasty “look-see” before undertaking an actual search. The “look see” can backfire by alerting the subject, who can then move funds, shift hard assets, and take other diversionary actions.

What can a good international asset search firm uncover? By following the money trail it can provide data on real estate, both personal and commercial; shares owned of real estate ventures; monetary assets, including information on checking, savings, brokerage, and retirement accounts; facts on business ownership; and relevant figures on money owed to the subject, in order that the client seeking recovery can factor this forthcoming income into any seizure or freezing litigation.

In these troubled time of bust following boom such skilled asset search firms are in high demand. Nothing enables the scammer like boom times of ready money, easy credit, and high returns. It is easy to see why not only corporate and class action law firms require the services of these elite asset search firms. Divorce lawyers increasingly need to call upon such professional investigators as well.

With words like “Ponzi,” “pyramid” and “scheme” in such frequent use in financial scandals, now more than ever assets are being hidden. And now more than ever an expert international asset search is vital.