Inside High-Tech Asset Tracing Investigations with I-On Asia

Finance Monthly recently spoke with Oliver Laurence, Managing Partner - EMEA and Australia at I-OnAsia, whose rich background in police work and government investigations offers a unique perspective to explore this field. His diverse experiences spanning fraud, money laundering, international love scams, and various financial crimes have culminated in a comprehensive understanding of illicit asset movements. As we navigate the complexities of modern financial transactions, technological evolution, and the use of tangible assets for hiding wealth, Mr. Laurence sheds light on the strategies and principles employed to unearth concealed assets and the challenges posed by the ever-evolving landscape of asset tracing.

Mr Laurence, given your tenure with the Police and your involvement in government investigations, how have these experiences influenced your asset tracing techniques? Would you say that this distinctive background provides you with a competitive advantage at I-OnAsia?

My government investigations work often spanned a wide range of criminal activities, including fraud, money laundering, international love scams, and other financial crimes. This diversity of exposure allowed for a comprehensive understanding of the myriad of ways individuals and entities try to hide or move assets illicitly.

My career in law enforcement and governmental investigations provided me with advanced training and access to cutting-edge technology and tools not available to the public. This included specialised software, databases, and forensic techniques designed specifically for tracking assets and uncovering illicit financial activities. This has been a huge help moving into the private sector with I-OnAsia working all over the globe.

Considering the reputation of I-OnAsia as a Chambers & Partners ranked leading investigations and intelligence firm operating now for more than 20 years, my background in police and government investigations has undoubtedly been seen as a competitive advantage to our clients, supporting our global team out of Hong Kong and New York.

Is there such a thing as a typical asset tracing investigation? Do you employ a broad set of principles in each case? If so, what are they, and how did they come about?

While every asset tracing investigation is unique, given the varying nature of cases we undertake at I-OnAsia, underlying assets, jurisdictions involved, and the methods used by entities to hide or move assets, there are some typical approaches and broad principles that can be applied.

For me, it’s about starting with a thorough understanding of the client's objectives and a review of all available information. This stage helps to determine the potential scale of the investigation and the assets in question. Gathering all relevant documents, which might include bank statements, property records, corporate records, contracts, and more. Analysing these can provide leads on the movement and location of assets or, of course, allow our team to start the investigation strongly with a good understanding of the subject and what we may or may not be looking for.

Our heat seeker capability introduced a few years ago into our firm has allowed us to build a rapid global footprint of our targets both commercially and privately. No longer do we just look for bricks and mortar. Asset tracing has developed into so much more. Lifestyle patterns and access to liquidity are all huge clues and indicators as to one's wealth and provide litigators and insolvency practitioners with a good idea of the subject person.

How have the intricacies of modern financial transactions and instruments, such as cryptocurrencies, made asset tracing more challenging?

The evolution of modern financial transactions and the introduction of new financial instruments, especially cryptocurrencies, have certainly added layers of complexity to the asset tracing process.

Cryptocurrencies operate on decentralised platforms, making them inherently resistant to control or regulation by central entities or governments. This decentralisation can make it difficult for investigators to retrieve pertinent data or enforce traditional methods of asset recovery.

Some cryptocurrencies, especially privacy coins like Monero or ZCash, prioritise user privacy, making transactions largely anonymous. While Bitcoin and many others operate on a pseudonymous basis (where users are identified by public keys rather than personal information), linking these public keys to real-world identities can be challenging. These are services that mix potentially identifiable or 'tainted' cryptocurrency funds with others, making the tracing of transactions far more complicated.

While these complexities present challenges, they also offer opportunities. The immutable nature of blockchain, which underpins most cryptocurrencies, means that all transactions are recorded permanently. If investigators can decipher the information or link pseudonymous data to real-world identities, they can uncover detailed transaction histories.

How has the evolution of technology, both as a tool for hiding and tracing assets, changed the landscape of asset tracing?

The evolution of technology has significantly impacted the landscape of asset tracing, presenting both challenges and opportunities for investigators. Technology has been a double-edged sword, serving as a tool for obfuscating assets and, conversely, a means to unearth hidden assets with unprecedented efficacy.

Advanced forensic tools can recover deleted data from devices, analyse digital trails, or even trace the origins of transactions on certain blockchain networks. The power of big data analytics, combined with artificial intelligence, allows investigators to sift through vast amounts of data quickly, spot patterns, and identify suspicious transactions.

In essence, while technology has introduced new avenues for hiding assets, it has also empowered investigators with tools that, when used adeptly, can unravel even the most sophisticated concealment techniques. The landscape of asset tracing has, as a result, transformed into a high-tech game of cat and mouse, with both sides continuously evolving their strategies.

How do individuals use real estate, art, or other tangible assets to hide their wealth? Are there particular "red flags" that suggest such methods?

Individuals seeking to hide or launder money often turn to tangible assets like real estate, art, and luxury goods because they can be easier to cloud and offer value storage in something relatively stable. Here's how these assets are commonly used:

Individuals may purchase properties through shell companies, trusts, or other legal entities that mask the true owner's identity. Purchasing real estate in foreign countries, especially those with strong property rights but weak anti-money laundering controls, can help hide assets.

The art market often allows buyers and sellers to remain anonymous, especially at auctions. The value of art can be very subjective, allowing for over- or under-valuation, which can be a means to transfer or hide large sums of money.

While the use of tangible assets for hiding wealth can be subtle, there are certain "red flags" or indicators that can suggest such methods, If properties or art pieces are frequently bought and sold, especially in a short timeframe, it might indicate an attempt to confuse the paper trail. Purchases that seem disproportionate to an individual's known source of income or wealth can be suspicious.

The use of multiple layers of corporations, trusts, or other entities, especially if they're based in multiple jurisdictions, can be a sign of an attempt to hide the true ownership or origin of funds.

Detecting and proving the illicit concealment of wealth requires a multifaceted approach, combining the scrutiny of financial transactions with a deep understanding of the behaviors and patterns associated with money laundering and asset hiding.

How do you prioritise your tracing efforts when time is of the essence, such as impending bankruptcy or potential asset transfers? What immediate steps can be taken to prevent impending asset transfers?

Identifying which assets are most vulnerable to being moved, hidden, or liquidated is always a priority for our global team, if you know they exist of course. If you don’t the search starts from the ground up.

While real estate and tangible assets can be of high value, they usually take time to sell. Bank accounts, stock portfolios, and other liquid assets can be transferred quickly and if we know about them, they become our primary focus.

Oliver Laurence JP Qual
Managing Partner – EMEA & Australia, I-OnAsia