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FraudNet members talk about working for victims in the world of complex fraud, asset tracing and asset recovery.The biggest misconception people have about complex fraud is:
When complex fraud cases arise, people may think that criminal proceedings are the only way to investigate the case, arrest fraudsters, and trace and recover the fraud-related assets/funds for the victims.
However, the threshold for Chinese police and prosecutor departments to initiate an economic crime case, including fraud, is relatively high. Generally, the Chinese police department is hesitant to take swift measures unless a fraud case has caused extensive and serious effects and even instability to the society as a whole. Even in this case, the priority and major focus of the Chinese police department is still to maintain the stability of the society and arrest the fraudsters rather than taking immediate measures to trace the fraudster’s assets. The criminal investigation and proceedings may take some time, sometimes years. When the criminal proceedings enter the final stage, the assets of the fraudsters may become much harder to be traced and recovered.
Therefore, in some cases, it may be more effective for victims to take measures immediately, i.e. file civil litigation and apply for preservative measures to freeze the fraudsters’ assets, rather than merely rely on the outcome of criminal proceedings.
The biggest misconception government officials have about complex fraud is:
As discussed above, while arresting and interrogating the fraudsters is crucial in investigating a complex fraud case, it is recommended, for not only the victim but also for the police and prosecutor department, to take immediate actions to trace and control the assets and funds of fraudsters, relevant suspects and their relatives or affiliates.
In this regard, it yields greater and more effective results when Chinese government departments work in close cooperation with the law enforcement departments in other jurisdictions involving assets transfer, even with private law practitioners in China and overseas, at the very beginning stage of the investigation of large, complex and cross-border fraud cases.
The greatest challenges in asset tracing and recovery in my part of the world are:
The difficulty obtaining assets information and to trace fraudsters’ assets transfer status.
Usually the fraudster started the transfer/concealment of assets and money laundering from the very beginning of their conduct of the fraud or Ponzi scheme. So the hardest part in investigating complex fraud cases is actually to trace and recover the fraud-related assets and funds. In this regard, it is important and recommended to conduct professional investigations and obtain judicial support from Chinese courts and other law enforcement departments in the relevant jurisdictions.
The greatest challenges worldwide are:
Closer and faster international cooperation needs to be strengthened in investigating large, complex and cross-border fraud cases and recovering the fraud-related assets and funds. In recent years, the large and complex fraud cases are usually cross-border cases. Fraudsters are frequently using international channels and tools to conceal huge amounts of fraud-related funds.
We are happy to see that the Chinese government has been endeavoring to build a worldwide network by cooperating more frequently with various foreign and international law enforcement departments in arresting fraudsters and investigating large cross-border fraud cases.
What I tell victims of fraud about the process of asset tracing and recovery is:
Facing the very crafty fraudsters who are using more subtle and hi-tech methods to cheat the victim and to transfer/conceal their assets/funds, it is crucial for the victims to seek professional advice to strategize the plan in tracing and recovering their assets and funds. In particular for the cross-border fraud cases, it would be very hard for individual victims to recover their funds without the assistance of law practitioners of relevant jurisdictions.
The most challenging day I’ve faced on a case was:
When we applied for interim measures with the court with evidence that might not be sufficient enough for granting such measures given the strict standards. Meanwhile the client/victim could lose huge amount of funds if such measures were not taken in a timely manner.
The best day I’ve ever had working on a fraud case was:
When we successfully persuaded the judge to adopt preservative measures on the assets of affiliates of a company which conducted a complex and organized fraud. The evidence revealed afterwards proved that the company transferred its assets together with illegal proceeds to those affiliates. The victims finally recovered those transferred assets.
And when our strategy of tracing and preserving fraudster’s assets in multiple jurisdictions worked well and imposed great pressure on the fraudster, which resulted in a settlement in favor of our clients.
I, became a member of FraudNet, because:
With fraudsters increasingly transferring/concealing assets and illegal proceeds in multiple jurisdictions, international cooperation among practitioners and experts in the area of assets tracing and recovery is crucial to helping victims to trace assets and realize the goal of assets recovery. ICC FraudNet calls together the top lawyers and practitioners in the field of assets tracing and recovery from the world’s major economies and jurisdictions, as well as leading offshore wealth havens, and constitute an excellent international cooperation network to help victims on asset tracing and recovery.
Asset tracing and recovery is a chosen part of my work, because:
The victims of complex fraud cases suffer huge losses and it is very difficult for them to recover their assets and funds without professional assistance. Law practitioners, professional investigators and anti-fraud experts are in a good position to use their expertise and experience to help victims of large, complex and cross-border fraud cases to trace and recover their assets and funds to the best possible extent.
Christine Yi Kang is a partner of Jun He Law Offices (“JunHe”). She has significant experience in international commercial dispute resolution, including international commercial arbitration and litigation, both in China and abroad for over 15 years. She also practices extensively in corporate compliance and ant-commercial bribery investigation. She joined JunHe in 2011 after practicing with international law firms and with China International Economic and Trade Arbitration Commission (CIETAC) for over ten years. Established in 1989, JunHe is one of the first private partnership law firms in China and has grown to be one of the largest and most recognized Chinese law firms. JunHe has nine offices around the world and a team comprised of more than 600 professionals, including over 180 partners and legal counsel, as well as over 420 associates and legal translators. JunHe provides first-class full services on Chinese Law, as well as legal services on local laws through its overseas offices. Due to its outstanding client service and excellent reputation, JunHe is the only Chinese law firm to have been accepted for membership in Lex Mundi and Multilaw, two leading associations of independent law firms around the world. Through such alliances, JunHe is able to extend its premier legal services efficiently and consistently to every corner of the globe.
ICC FraudNet is an international network of independent lawyers, who are leading civil asset recovery specialists in each country. Recognized by Chambers Global as the world’s leading asset recovery legal network, our membership extends to every continent and the world’s major economies, as well as leading offshore wealth havens that have complex bank secrecy laws and institutions where the proceeds of fraud often are hidden. Founded in 2004 by the Paris-based International Chamber of Commerce (ICC), the world’s business organization, FraudNet operates under the auspices of the ICC’s London-based Commercial Crime Services unit.