Technology and human expertise, fundamental to the asset recovery process - interview Martin Kenney

Monday 18 October 2021 08:54 CET | Editor: Mirela Ciobanu | Interview

Ahead of RiskConnect, The Virtual Risk & Compliance Conference, The Paypers sat with Martin Kenney, founder and managing partner of Martin Kenney & Co, Solicitors, in the BVI, to find out what asset recovery is.

Martin Kenney will be a keynote speaker at the upcoming RiskConnect conference, scheduled for 26 October, organised, and brought online by Web Shield. RiskConnect is the conference for the unsung heroes of payments: the risk professionals, compliance officers, and anti-fraud experts.

Martin, you are one of the world’s leading asset recovery lawyers and one of Who’s Who Legal Global Elite Thought Leaders for 2021. What professional experience and personal skills enabled you to earn these impressive titles?

I have been practising as a lawyer in the field of investigating international fraud and asset recovery for over 30 years. During this time, I have fought many battles, including those linked to some very high-profile cases, such as the USD 5.5 bln Stanford International Bank (Antigua) Ponzi scheme and more latterly the USD 200 mln case of Nissan Motor Co v former Chairman / CEO Carlos Ghosn. It is this experience and expertise that draws clients to my firm. We very rarely need to canvass for business.

On a personal level, I see myself as a pragmatist. Once my team becomes immersed in an investigation, we are unrelenting. The secret to success involves (a) reading the papers at our feet (b) building a case-specific investigative model (c) running an inquiry under the protection of utmost secrecy and with the assistance of judges in what are most usually multiple jurisdictions (d) knowing how to react dynamically to the ever-shifting ocean of evidence we find, and (e) pre-emptively freezing concealed assets in multiple venues at once. As a firm, we try hard to ensure that clients do not throw good money after bad.

If during the investigation we identify an inherent weakness in the case, then we ensure the client is made aware and, if necessary, advise them to drop the matter. Prospective clients at our level will have done some work researching our firm before approaching us. They want excellent asset recovery lawyers to represent them. The fact that they can trust us to be forthright is as important as our technical ability to represent them.

What is asset recovery?

Quite simply, it is righting serious wrongs by delivering economic justice. If you fall victim to a fraudster and lose a lot of money, you want it back. However, economic criminals will often launder that money via layered corporate structures, using it to purchase assets such as a yacht, a luxury property, etc. Our role is to pursue the criminal through the courts in each relevant jurisdiction where those assets are held and seize them before returning the value back to victims. We also sue deep-pocketed facilitators of fraud (such as banks, law firms and accountants), for damages when they cross the line.

What role does technology, human expertise, industry collaboration, regulators’ involvement, and banks play in asset recovery?

I see all of these elements as being fundamental to the asset recovery process. Some of the technological systems we now use would have been considered rocket science only 10 years ago. In terms of expertise: I would suggest that this can only arise out of experience. In terms of collaboration, we all have a role to play in protecting victims, sometimes from themselves. A banker, for example, may be faced with an elderly client wishing to transfer large sums of money to an account under questionable circumstances. If we can prevent this from happening, then we have no victim. I have a few issues with the role of financial services regulators, in that they are often toothless tigers. Their goals are admirable but may not have the tools to enforce and ensure that people are doing what they should be doing.

Sir Rob Wainwright, a former director of EUROPOL, estimates that only 1% is recovered annually from money laundering. Why are criminal profit recovery rates so low?

This is primarily due to a scarcity of resources in criminal or civil asset forfeiture or recovery. Without adequate resources, the regulators, overseers, law enforcement and the financial institutions cannot safeguard the systems that enable money laundering. It is a huge problem, and we are effectively waving a white flag in the face of the enemy. Politicians can make a song and dance about the problem, but unless they invest in a robust preventative infrastructure, the problems will carry on unabated. Finally, until such time as the courts sentence the culprits in the context of the severity of their crime, the crooks will continue regardless, as the risk vs. reward calculation weighs heavily in their favour.

What usually happens with the recovered assets?

In civil cases, the assets are realised (sold to cash) and the value returned to the victim. In criminal matters, the same applies, but some illicit value is forfeited to the state in which the asset recovery takes place. Where cases involve no particular victim, such as drug trafficking, the recovered value becomes property of the state. In turn this value should find its way back into the public purse in the form of lower taxes or investment in public services.

Who should pay/should be held accountable for economic crime?

Everyone who knowingly, recklessly, or negligently facilitates criminality needs to be sued for damages to the extent they have the means to pay for their conduct. Obviously, we have to punish the criminals, but we also need to hold professional facilitators to account, too. The globe is blighted by bankers, accountants, and lawyers who, at best, are ethically challenged and, at worst, complicit in money laundering processes. We cannot continue to operate our financial systems where ignorance is bliss (and profitable).

Many agree that we need more industry collaboration to detect, stop, and prevent financial crime. If it is already happening, what are its signs, and if not, what prevents it?

Acquisitive crime has been around in one form or another for millennia. Sadly, I do not see this ending anytime soon, unless governments have the political will to change the laws and empower those who can influence the problem. We are already over-regulated, so what is the answer?

To my mind it is quite simple: we must severely punish the criminals when they are caught. Often sentencing is light due to fraud being seen as a ‘victimless crime’. It is not. As Plato said: ‘Good people don’t need laws to tell them to act responsibly and bad people will find a way around the laws’.

I think Plato’s teaching is an oversimplification. I prefer the adage from a study of the psychology of fraud: 10% of us will always make an unethical choice when given the opportunity; 10% never will; and 80% of us are at risk of making bad choices if we are left unsupervised.

I submit we need to up our deterrent and supervision of regulated persons. Without it, we can legislate and regulate until we are blue in the face, but nothing will change.

About Martin Kenney

Martin Kenney is one of the world’s leading asset recovery lawyers, specialising in multi-jurisdictional economic crime and international serious fraud. He is one of Who’s Who Legal's Global Elite Thought Leaders and is ranked by Chambers & Partners as one of the world’s top-ranked asset recovery lawyers.

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Keywords: financial crime, compliance, fraud prevention, risk management
Categories: Fraud & Financial Crime
Countries: World
This article is part of category

Fraud & Financial Crime

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