Estimates of the cost of fraud to the UK economy are in their billions, but the true burden of such a hidden crime can never be known until each instance is made public. When a major fraud is eventually discovered those companies taking part will most likely be forced to enter insolvency proceedings. This reduces the chance of civil asset recovery and often increases the difficulties in tracing and retrieving assets diverted by the fraudster. However, our combined approach to asset tracing using insolvency and forensic resources can provide an even better route for recovery in these cases of fraud.


Discovering fraud
Most fraud only comes to light when a company enters into formal insolvency proceedings. It is then, when its books and records are exposed to the external scrutiny of the Insolvency Practitioner, that systematic or opportunistic diversion of funds is discovered. Other times, uncovering a fraud will crystallise the insolvency of the business and call for rapid action before further losses occur.


Evidence gathering
The first step may simply involve forensic investigators and insolvency experts working together to conduct a business review. The objective of this review will be to determine whether or not a client’s lending is at risk and identify any immediate remedies to reduce exposure.

Understanding the mechanics of the fraud and establishing an evidential trial is vital to recovering the proceeds of the crime. Delay encourages those involved to falsify or destroy the records that will verify what they have been doing.

The prompt appointment of an Insolvency Practitioner as office holder to secure documents and initiate the recovery process is essential. However, by utilising increasingly sophisticated modern forensic investigation methods it is possible, though harder, to trace losses occurring years previously.

Immediately bringing in forensic investigative accountants allows the recovery team to get to grips with the function and purpose of the business and to understanding the way in which it was being managed, thus giving a head start to the investigation.


Forensic investigation
Reviewing and analysing the available documents, in order to identify the perpetrators of the fraud and understand the scheme used to divert funds, is only the first stage of the asset tracing and recovery process.

Information gathering continues alongside the analysis work in the form of robust interviews with directors, staff and suppliers of the insolvent company alongside intelligence gathering using public access databases and other sources such as regulatory and business network contacts. Recovery of deleted computer files using the latest forensic IT technology provides further material for the tracing process.

Securing digital evidence in an appropriate and timely fashion is crucial to the outcome of an asset recovery assignment.


Focused, robust, proactive
When a tenacious and unrelenting approach is needed with reticent directors or bankrupts, the best way forward will be to work closely with legal teams experienced in rapid response insolvency asset recovery work and complementing this with the full use of Insolvency Act provisions and fraud investigation techniques.

Our firm approach ensures that an uncooperative individual is quickly brought before a judge for questioning in court, under the provisions of s236 or 2366 Insolvency Act 1986 by our own expert examiners.


How we can help?
It is important for disadvantaged creditors in any fraud to decide their priorities going forward. These may include pressing for criminal prosecutions of the culprits or protecting their reputation in the market place. Recovering lost assets is likely to be high on, if not top of, their list.

We can provide expert asset tracing and recovery services to all cases of fraud using forensic investigation skills combined with Insolvency Act powers.

Our recovery teams work closely with tax investigation professionals and are also supported by computer forensic specialists. Our team of licensed Insolvency Practitioners use powers under the Insolvency Act to trace and recover misappropriated assets from fraudulent and criminal activity and to protect and realise business and personal assets