Asset Tracing

Asset tracing is the process of tracking assets or funds that are missing.

Typically this occurs when there is a suspicion or act of fraud, whether that is on a corporate or private (for example spousal) level.

Not all asset tracing occurs post the offence

Suspicion that an illegal activity might be happening or the concern to ensure that processes and procedures are in place to minimise the risk that it happens may in themselves be a catalyst for initiating an asset trace enquiry.

The skills required are part accountant and part investigator

Undoubtedly asset tracing is hard work. In the vast majority of cases the investigator is starting sometime after a fraudster has had access to the assets, time to plan the method of spiriting away the assets, covering their tracks and disposing of the assets.

Then there follows the conversion of the assets into other types of assets and cleaning the trail (commonly called money laundering).

The starting point in most cases is the legitimate owners of the assets, then how they lost them, what alerted them to the loss and the steps they have taken to recover the stolen assets (both through the courts and through any other means).

The investigator will become involved in both electronic data analysis as well as physical pursuit of the assets. As asset recovery is not an inexpensive process the costs of undertaking a trace and recover program need to be carefully weighed against the value of the assets, the views of any insured parties and the position adopted by any insurance company or underwriter involved.

Detection and apprehension of the fraudster will undoubtedly assist in tracing the assets however that will not necessarily result in any assets of significant value being recovered.

In our experience, the rate of dissipation of stolen assets, be it money or anything else, is correlated to the ease and frequency of the offending. The easier it is to steal; the faster the last amount stolen gets spent; the higher the expenditure levels are set by the offender with each subsequent repeat occurrence of the fraud/theft.

Prevention is the better option than having to trace and recover. However prevention is almost impossible to ensure. The best that can be hoped for in most cases is that processes of internal controls, physical security, overt attention to exceptions and an unwavering policy of prosecution of offenders combine to deprive the majority of those person so motivated of the opportunity to carry out the fraud in the first place.