Asset Recovery Handbook

Asset Recovery Handbook
A Guide for Practitioners
Jean-Pierre Brun
Larissa Gray
Clive Scott
Kevin M. StephensonAsset Recovery HandbookAsset Recovery Handbook
A Guide for Practitioners
Jean-Pierre Brun
Larissa Gray
Clive Scott
Kevin M. Stephenson© 2011 T e International Bank for Reconstruction and Development / T e World Bank
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ISBN: 978-0-8213-8634-7
eISBN: 978-0-8213-8635-4
DOI: 10.1596/978-0-8213-8634-7
Library of Congress Cataloging-in-Publication Data
Brun, Jean-Pierre, 1962-
Asset recovery handbook : a guide for practitioners / Jean-Pierre Brun and Larissa Gray.
p. cm.
Includes bibliographical references and index.
ISBN 978-0-8213-8634-7 — ISBN 978-0-8213-8635-4 (electronic)
1. Forfeiture—Criminal provisions. 2. Searches and seizures. I. Gray, Larissa. II. Title.
K5107.B788 2011
345’.0773—dc22
2010048779Contents
Preface xi
Acknowledgmentsxiii
Acronyms and Abbreviations xv
Introduction 1
Methodology 2
How the Handbook Can Be Used 3
1. Overview of the Asset Recovery Process and
Avenues for Recovering Assets 5
1.1 General Process for Asset Recovery 5
1.2 Legal Avenues for Achieving Asset Recovery 9
1.3 Use of Asset Recovery Avenues in Practice: Three Case Examples 14
2. Strategic Considerations for Developing and Managing a Case 19
2.1 Gathering Facts: Initial Sources of Information 19
2.2 A ssembling a Team or Unit, Task Forces, and Joint Investigations with
Foreign Authorities 22
2.3 Est ablishing Contact with Foreign Counterparts and Assessing
Ability to Obtain International Cooperation 25
2.4 Securing Support and Adequate Resources 27
2.5 Assessing Legislation and Considering Legal Reforms 28
2.6 Addressing Legal Issues and Obstacles 29
2.7 Identifying All Liable Parties 34
2.8 Specific Considerations in Criminal Cases 34
2.9 Implementing a Case Management System 38
3. Securing Evidence and Tracing Assets 41
3.1 Introducing a Plan and Important Considerations 41
3.2 Creating a Subject Profile 43
3.3 Obtaining Financial Data and Other Evidence 43
3.4 I dentifying Relevant Data: Examples from Commonly
Sourced Documents 61
3.5 Organizing Data: Creating a Financial Profile 71
3.6 Analyzing Data: Comparing the Flows with the Financial Profile 72
3.7 Garnering International Cooperation 744. Securing the Assets 75
4.1 Terminology: Seizure and Restraint 75
4.2 Provisional Order Requirements 76
4.3 Pre-restraint or Pre-seizure Planning 79
4.4 Timing of Provisional Measures 85
4.5 Exceptions to Restraint Orders for Payment of Expenses 86
4.6 Ancillary Orders 87
4.7 Third-Party Interests 87
4.8 Alternatives to Provisional Measures 89
5. Managing Assets Subject to Confiscation 91
5.1 Key Players in Asset Management 92
5.2 Powers of the Asset Manager 93
5.3 Recording Inventory and Reporting 94
5.4 Common Types of Assets and Associated Problems 95
5.5 Ongoing Management Issues 99
5.6 Consultations 101
5.7 Liquidation (Sale) of Assets 101
5.8 Fees Payable to Asset Managers 101
5.9 Funding Asset Management 102
6. Mechanisms for Confiscation 103
6.1 Confiscation Systems 105
6.2 How Confiscation Works 107
6.3 Confiscation Enhancements 114
6.4 Third-Party Interests 118
6.5 Confiscation of Assets Located in Foreign Jurisdictions 119
6.6 Recovery through Confiscation for the Victims of Crime 119
6.7 Disposal of Confiscated Assets 120
7. International Cooperation in Asset Recovery 121
7.1 Key Principles 122
7.2 C omparative Overview of Informal Assistance
and MLA Requests 127
7.3 Informal Assistance 131
7.4 MLA Requests 138
7.5 Cooperation in Cases of Confiscation without a Conviction 156
7.6 Cooperation in Civil Recovery (Private Law) Cases 157
7.7 Asset Return 158
8. Civil Proceedings 159
8.1 Potential Claims and Remedies 160
8.2 Bringing a Civil Action to Recover Assets 169
8.3 Final Dispositions 173
8.4 Formal Insolvency Processes 174
vi I Contents9. Domestic Confiscation Proceedings Undertaken
in Foreign Jurisdictions 177
9.1 Jurisdiction 177
9.2 Procedure for Beginning an Action 178
9.3 Ro le of the Jurisdiction Harmed by Corruption Offenses in
Foreign Investigation and Prosecution 179
9.4 Ensuring Recovery of Assets from the Foreign Jurisdiction 183
Appendix A. Offenses to Consider in Criminal Prosecution 187
Appendix B. Explanation of Selected Corporate V ehicles
and Business Terms 193
Appendix C. Sample Financial Intelligence Unit Report 199
Appendix D. Planning the Execution of a Search and
Seizure Warrant 201
Appendix E. Sample Document Production Order for
Financial Institutions 203
Appendix F. Serial and Cover Payment Methods in Electronic
Funds Transfers 209
Appendix G. Sample Financial Profile Form 213
Appendix H. Possible Discussion Points with
Contacts—Informal Assistance Stage 235
Appendix I. Mutual Legal Assistance T emplate and
Drafting Tips 237
Appendix J. Web Site Resources 241
Glossary 249
Index 253
Boxes
1.1 Legal Framework for Asset Recovery 10
1.2 Alternative Means of Recovering Assets 15
2.1 Role and Contribution of FIUs in Asset Recovery Cases 21
2.2 Obstacles to International Cooperation 26
2.3 S trategic Decisions in Peru—Legislation Allowing
Plea Agreements 28
2.4 P rosecution of Accounting, Records, and Internal Control
Provisions in the United Kingdom and the United States 36
2.5 Examples of Challenges in Establishing the Elements of the Offense 37
3.1 Checklist for Collection of Basic Information 44
3.2 Tracing and Recovering Assets—Efforts in the United Kingdom 46
3.3 Elaborating Sufficient Grounds for a Search Warrant 55
3.4 Important Items to Seize 56
3.5 Documentation to Be Requested from Financial Institutions 58
Contents I vii3.6 Retention Orders 59
3.7 Forms and Documents Related to the Wire Transfer Process 65
3.8 Red Flags in C ontracts, Payment Documentation, Payment Records,
and Payment Mechanisms 69
4.1 Drafting Affidavits 78
4.2 An Example of Pre-restraint Planning Decisions in Practice 83
6.1 Historical Background and Recent Developments in Confiscation 104
6.2 I ssues Encountered in Determining the Proceeds of
Crime—A Case Example 110
6.3 Using “Related Activities” to Capture the Full Benefit 118
7.1 Connecting With People—A Case Example from Peru 124
7.2 Contact Points for International Cooperation 125
7.3 Disclosure Obligations—A Barrier to MLA Requests 127
7.4 I nvestigative Jurisdiction in France, Switzerland, the
United Kingdom, and the United States 133
7.5 Facilitating Informal Assistance 134
7.6 Spontaneous Disclosures from Switzerland 137
7.7 Selecting a Legal Basis to Include in an MLA Request 139
7.8 O vercoming Dual Criminality—Illicit Enrichment and Corruption
of Foreign Public Officials 142
7.9 Bank Secrecy and Fiscal Offenses—A Ground for Refusing MLA? 146
7.10 Avoiding Rejections of MLA Requests That Are Overly Broad 149
7.11 W orldwide Orders in the United Kingdom 153
7.12 Req uirements for Direct Enforcement of MLA Requests for
Confiscation in the United Kingdom and the United States 154
7.13 Asset Recovery Pursuant to an MLA Request in France 158
8.1 Case Examples of Proprietary (Ownership) Claims 160
8.2 The U .S. Racketeer Influenced and Corrupt Organizations
(RICO) Statute 163
8.3 Compensation for Damages Where Assets Are Misappropriated 164