Martin Kenney has been selected as one of @ ‘Thought Leaders: Global Elite’ for 2019.
Martin is a specialist fraud investigation and asset recovery lawyer based in the BVI and a member of ICC FraudNet. Accolades include holding an ACFE Cressey award for lifetime achievement in combatting fraud. OffshoreAlert says: “Martin is perhaps the best-known fraud and asset recovery attorney in the world.” Wired magazine asserted he is one of the “world’s sharpest fraudbusters”. The 2017 edition of WWL named Martin a Top 40 Thought Leader globally, and in both 2017 and 2018 the number one asset recovery lawyer in the offshore world.
WHAT ATTRACTED YOU TO SPECIALISE IN FRAUD AND ASSET RECOVERY LAW?
In 1991, I was an associate at an English firm in New York. I was tasked with a fraud and asset recovery case perpetrated on an institutional victim in Canada. Using a multidisciplinary and multi-jurisdictional model, and an array of pre-emptive remedies, we successfully turned a “sow’s ear” into a “silk purse”. I chose to specialise in fraud and asset recovery as it is professionally challenging.
HOW HAS THE AREA DEVELOPED SINCE YOU BEGAN YOUR CAREER?
Twenty-five years ago, no one called our specialism “fraud and asset recovery”. One improvement we have seen is the accessibility to third-party funders willing to take a risk on behalf of a victim of fraud who ordinarily would be denied justice. Other significant developments include the anonymity of moving money in the blink of an eye across the world with globalisation, the introduction of a global standard in the fight against money laundering, big data analysis by artificial intelligence, and the internet as a store of vast data.
WHAT WAS THE MOST CHALLENGING PART OF ESTABLISHING YOUR OWN FIRM?
Fraud and asset recovery, as a practice area, was unheard of in 1995 when I set up my own firm for the first time – in New York City where I lived then. We faced a deficit in understanding by clients, lawyers and judges for the area. The practice lies in the intersection between cross-border insolvency; comparative pre-emptive remedy law (to secretly find and freeze assets); complex transnational commercial litigation; and the law of private investigations. A major development was the establishment of ICC FraudNet in 2004 by the International Chamber of Commerce. Now my boutique of 20 people in the BVI has surge capacity and global reach with 75 specialists in 65 countries in the discipline.
WHAT CAN CREDITORS AND VICTIMS IN LARGER DEVELOPING NATIONS DO TO BECOME BETTER ACQUAINTED WITH THEIR RIGHTS TO RECOVER VALUE?
I have witnessed how little creditors know of their rights abroad in countries such as Brazil and India. Creditors in jurisdictions with historical rule of law challenges have negative expectations of how they will be treated abroad; as a result, many creditors in emerging markets take no action to recover assets as they believe it to be pointless. It is incumbent on experienced asset recovery professionals to educate and show creditors in developing nations that their rights can be vindicated abroad.
ARE THERE ANY TECHNICAL DEVELOPMENTS IN RECENT CASE LAW THAT ARE OF IMPORTANCE TO THE FIELD?
We have been conducting some work in India regarding “wilful defaulters”. Our team provided technical assistance to the draftsman of the new Indian Bankruptcy Code. This Code has transformed the old bankruptcy laws, levelling the playing field. Previously, tactical bankruptcy in India favoured the defaulter, but not any more.
As a team, we identified potential weaknesses in the Code and we provided our input on a pro bono basis.
JURISDICTIONS SUCH AS DUBAI, SINGAPORE AND HONG KONG ARE BECOMING INCREASINGLY IMPORTANT IN THE ASSET RECOVERY SPACE – WHAT WOULD YOU SAY IS DRIVING THIS TREND?
Fraudsters have identified weaknesses in these jurisdictions that favour their ability to operate. There are big opportunities to launder money and hide assets in Dubai and Singapore. Remedies for victims before “onshore” courts in Dubai are somewhat limited. Consequently, many of the UK’s largest “carousel fraudsters” have chosen to make a run for cover there. The UAE is not big on extradition, so it is unsurprising that the fraudsters are gravitating there.
WHAT IS THE MOST MEMORABLE CASE YOU HAVE WORKED ON?
A Canadian bank was victimised in a circular US$720 million cheque-kite scheme. The origin of the scam was in the Bahamas. The culprit was the son of a wealthy deceased Montreal businessman. The suspect traded on the good reputation and wealth of his late father, persuading the bank to give his offshore company immediate credit for cheques drawn on its account in Nassau. Despite there only being a US$100 credit balance at the beginning of the fraud, he eventually uttered 1,552 rubber-cheques, totalling US$720 million in value and allowing him to take US$1.4 billion of risk on the stock market. The bank got nervous and shut down the concession, minimising the loss to only US$5 million (potential losses were as high as US$60 million). Within 180 days of being engaged by the bank, I was able to effect a full recovery of the bank’s loss through asset freeze orders, search orders and an aggressive campaign of litigation in New York, Florida and the Bahamas.
WHAT IS THE BEST PIECE OF CAREER ADVICE YOU CAN OFFER TO OTHERS?
Work hard. Read the papers at your feet. Conduct a thorough preliminary open source information (OSI) inquiry. Build a recovery model bespoke tailored to the facts. Accurately budget for costs. Use a multi-disciplinary team. Make each team member accountable for tasks and time. Use secrecy orders to find and freeze concealed assets. Be unrelenting.
Don’t be naïve. In our line of work, we are in a battle of wits with clever adversaries. By their nature, fraudsters are highly intelligent. Whenever it appears they are about to lower their guard, it is time for you to raise yours.