Review by Kristy Zander

Lipman Karas LLP

London, UK

Co-chair: Martin Kenney, Martin Kenney & Co Solicitors

Co-chair: Colette Wilkins, Walkers

Dr. Alexander Stein, Dolus Counter-Fraud Advisors

Rod Sutton, FTI Consulting

 

This highly entertaining session on the last day of the conference considered fraud andasset recovery from a range of multi-disciplinary perspectives and treated the audience to clips from some of the best fraud and greed-related films around. Who knew that such a genre even existed?

The first question for consideration was: “What is greed?”. Audience members were treated to a short animated film entitled “Greed” by director Alli Sadegiani, in which the film’s protagonist must  deal  with  the  unusual  consequences  of cash-producing acne. Dr. Stein noted that there are three main elements of greed: insatiability, hostility and avoidance/distraction. Provocatively, he postulated that greed is a less central motivator of fraud than one might think. 

Mr Kenney and Ms Wilkins noted that greed fuels speculation and listed some examples of speculation bubbles through the ages, from alchemy and tulip mania through to land speculation and (possibly) bitcoins. Audience members were then asked to participate in a game of “name that fraudster” before being treated to clips from the films “Noble House” and, of course, “Wall Street”.

The discussion then turned to asset recovery and the importance of building a multi-disciplinary and multi- jurisdictional team in order to “get the wheels in line” (“The Italian Job”). As a practical tip, Ms Wilkins suggested having regular all-jurisdiction conference calls, to ensure that all parties understand the full picture. Mr Sutton also discussed cultural and practical issues he has encountered when tracing assets into countries such as China or Vietnam.

Dr. Stein noted that when investigating fraud it is important to consider the “ecosystem” of a fraudster including participants, employees and victims of the fraud, given that fraud does not occur in a vacuum. By reference to further clips from “Boiler Room”, “American Hustle” and “Catch Me If You Can”, the panel emphasised that the asset recovery team should try to access data to learn the personality of the fraudster, rather than his or her position on an organisational chart. It is important to understand the wider picture of what else is going on under the surface and, in particular, what might be motivating a fraudster or witness. It was suggested that the psychological characteristics of a fraudster might include that they are charismatic, fastidious in dress, lack empathy and seek to accumulate wealth. 

A discussion followed on the tools available to lawyers and liquidators to obtain information and preserve assets, including the enhanced powers of investigation available to insolvency practitioners  and  litigation  remedies  such  as Norwich Pharmacal orders, Mareva injunctions, Anton Pillar orders and tracing claims. Particular areas highlighted by Mr Kenney and Ms Wilkins included conflicting claims to legal professional privilege and the importance of maintaining secrecy by obtaining extensive “seal and gag” orders and making simultaneous applications in multiple jurisdictions. A clip from “Margin Call” was shown to emphasise the lengths that fraudsters will go to for self-preservation. 

Dr. Stein then briefly discussed the use of 3-D profiling software to map out the matrix of individuals, relationships and organisational infrastructure involved in the fraud.

Finally, the session concluded with two more clips from “The Italian Job”, entertaining enough to forgive the perhaps tenuous segue to a discussion about the additional psychological barriers faced by a client who has been the victim of a fraud.

This was an entertaining and informative session, presented by a well-qualified multi-disciplinary panel who held the audience’s attention and interest throughout.

 

Published in INSOL World – Second Quarter 2014.