This article was first published in Commercial Dispute Resolution. Written by Matt Taylor and Andrew Whelan. Reproduced with permission. © 2024 Commercial Dispute Resolution. For further use, please visit www.cdr-news.com.
The ever expanding and evolving online world requires the modern investigator to be constantly attuned to the many new tools and data sets at their disposal. Increasingly, aspects of investigations, such as searches of corporate or property records, that once took days or even weeks and often required lengthy and expensive travel can be conducted by the investigator sitting at their desktop thousands of miles away. And this is a trend that is going to continue, as an increasing number of countries move to digitise – and publicise – their official datasets.
While a good investigator must be aware of what is increasingly available online, they must equally be cognisant of the limitations of conducting research through online resources only – and be acutely aware of when it is time to get out from behind the computer screen and into the real world. Online portrayals of people and companies are often overly polished, reflecting an image of wealth and success that may be skewed to attract business partners, investors, or simply admirers. Offline information sources, many of which are often overlooked, can be critical in providing objective, evidenced, and up-to-date insight into the subjects of your investigation.
Paper Records and Archives
Public registries containing vital information such as corporate records or property deeds are increasingly online. However, many still offer only basic searches remotely, while others retain records solely in paper format, requiring in-person visits to inspect them and make copies. It is essential that investigators understand the availabilities and limitations of public records in different jurisdictions and how to maximise the results of research through efficient and effective methods. This is an understanding that can only be attained from experience working on international cases, speaking to country experts and picking up the phone to the public registries themselves.
In asset tracing investigations, knowledge of how and when to consult paper records can make a considerable difference to the outcome of the matter. In one previous case investigating the assets of an international businessman, it was discovered that he frequently made use of Bahamas-registered companies to hold both shares in US companies and properties in the UK. Suspecting that the businessman had stronger ties to the Bahamas than just financial links, investigators visited a local public registry and conducted a search of an index of property transactions within the jurisdiction. This revealed at least four properties owned by him, including two apartments in a luxury development worth a combined USD 10 million. At a time when the businessman was being pursued by multiple creditors in Europe, the discovery of these assets placed our client at a significant advantage.
However, despite knowing how to navigate paper records, the lack of digitisation of some registries invariably poses difficulties when tracing assets. For example, many registries deny the option to search by an individual’s name to determine if they are an officer or shareholder of a company. When wishing to conduct searches at certain registries, an investigator must already know the names of the companies they wish to obtain records for, rather than being able to easily identify a person’s network of interests through a search of their name, as can be done in the UK.
In instances where such name searches are unavailable, investigators must be creative and use alternative means to identify a person’s associated companies, enabling the targeted retrieval of relevant records. This could include a comprehensive review of local and international media in relevant languages for mentions of any business associations, analysis of legal records which may contain key details of a person’s commercial activities, or speaking to sources who may have insight, for example former employees or competitors. In one recent matter, a review of IP addresses and domain records revealed a wide network of companies in West Africa linked to the target individual, allowing corporate records and additional documentary evidence of company ownership and control to be subsequently obtained. This was then supplemented by site visits and on-the-ground record retrieval to reveal more information about the network and value of underlying assets.
But even in those countries where a significant amount of corporate information is available online, there is often more that can be obtained. Indeed, a common oversight in investigations is the assumption that, in jurisdictions with online company registries, the majority of records have been uploaded and little remains held elsewhere. In fact, many registries have – often overlooked – archives where additional records are stored. A phone call or email to the relevant registry can generally provide investigators with quick access to archived materials and thus allow searches of materials not available online. For example, in one former matter, an email to a regulatory authority in the UK provided a copy of a lawyer’s disciplinary proceedings, including mentions of property assets and Swiss bank accounts owned by a subject of our investigation.
Site Visits and Surveillance
In an age of ever-increasing utilisation of digital tools, one of the most old-fashioned investigatory methods – site visits to locations featuring in investigations – often remains, to this day, one of the most relevant. In one prior matter, a debtor had established several luxury property businesses in Hong Kong. They enjoyed a lavish lifestyle and would show use of private jets and expensive cars on their social media. However, a visit to the registered address of their companies in Hong Kong found a dusty office with mail piling up at the front door, as well as payment orders from multiple local creditors plastered to the exterior. The details of these orders led to several ongoing court cases in Hong Kong that revealed a history of non-payments by the debtor and identified a multitude of parties competing against our client to recover sums. This allowed Hong Kong to be reconsidered as a priority jurisdiction for recovery efforts and efforts to be focused elsewhere.
Another recent matter required investigation into whether a businessman had ties to a sanctioned Russian oligarch. It was discovered that the businessman had resided and established companies in a British overseas territory. The businessman had registered most of his companies to a building on a small street in the territory where ‘street level’ online imagery was unavailable. A visit to the address revealed several brass plates on the front door showing the names of the businessman’s companies and that they occupied a small office on the first floor. Additional brass plates bearing names of previously unknown companies were also shown, and further investigation uncovered that they were controlled by the businessman and the Russian oligarch.
Longer-term surveillance can also provide intelligence and evidence that is unavailable through online research, also helping to uncover assets that can be very difficult or impossible to confirm via other means. For example, in jurisdictions where vehicle ownership is not publicly available, demonstrated frequent use of a particular car by an individual could help build an argument that they likely own the asset and lead to disclosure through legal mechanisms. Surveillance can also reveal visits to residential or commercial properties, involvement in certain businesses, meetings with accountants, lawyers or other professional service providers, or displays of spending and a lavish lifestyle that are not commensurate with a person’s claimed net worth.
In a previous matter investigating a UK-based manager suspected of embezzling funds from his employer, during surveillance the subject and his wife were observed visiting investment properties in his local town, including a block of student accommodation and car parking spaces. As the manager was located in a jurisdiction where reverse property ownership searches by name are unavailable, surveillance was the only method to locate these assets – and, significantly, their value was considerably higher than the cost of the exercise.
Before using surveillance, as with all investigative methods, there are a number of key points for an investigator to consider. A good investigator should be able to advise their client on the risks involved, whether the high costs are worthwhile, and whether surveillance is even possible in the jurisdiction in question. Surveillance is illegal in many countries, and in others only possible for licensed professionals. However, when used sparingly, legally and precisely it can be a valuable route to new intelligence and to corroborate existing leads.
Human Source Intelligence
Despite the vast amount of information that can be obtained online, one of the oldest investigatory tools – human source intelligence – remains just as relevant today as it ever was. Human source intelligence – or, simply, speaking to sources – is a method used by investigators to obtain information that is not available in the public domain. If these non-public enquiries are conducted correctly, the information obtained as the ability to transform the direction of investigations by providing insight, context, depth and colour in a manner that cannot be replicated through any other means.
Human sources typically fall into two categories. The first is based around vast networks that investigators have collectively built over decades of their professional careers and through conducting thousands of previous investigations in professions including legal, media, law enforcement, finance, and professional services. The second category of sources comprise those individuals identified on specific projects. These sources are typically former employees or colleagues of the subject of the investigation, competitors or industry experts, or anybody else likely to possess unique knowledge of the target. Often, investigations involve a combination of both types of sources, and who is approached depends on the context and sensitivity of the specific investigation.
Human source intelligence is relevant in all types of investigations, ranging from pre-transactional reputational due diligence to complex cross-border asset searches. In a recent due diligence matter, an investor client wanted to better understand the leadership team of an energy company that it was considering acquiring shares in. As part of enquiries, a range of sources were spoken to including former colleagues of the principals of the target company. As well as identifying the various dynamics and management styles within the team, it was also ascertained that one principal had been forced to leave a former employer due to their personal manner and perceived ill treatment of more junior members of staff – none of which had ever been disclosed publicly. Similarly, during a complex multi-jurisdictional asset search, it was identified through public record research that the subject owned a fintech company in Central Europe. As the company was privately owned, had a limited public profile, and was located in a jurisdiction which required limited financial disclosures, it was impossible to gain any sort of understanding of the firm’s operations through public records. However, through speaking to well-placed sources, detailed insight into size, revenues, profits and expansion plans was obtained. As a result, an asset that was previously on the periphery of the investigation moved into the centre.
Conclusions
Investigators should recognise both the value and limitations of online information for their cases, remembering that offline sources such as paper records and archives still constitute a large proportion of the information held in the world’s public registries. As such, an investigator should always ensure they consider this and be familiar with how to maximise what information is available in each jurisdiction. Where search methods are restricted by a lack of digitisation, creative workarounds using other information sources, including those online, can assist in identifying relevant information.
It is important to remember that online portrayals of companies and people can be skewed to provide a false image of success and prosperity. Getting out from behind the computer to conduct site visits and surveillance can provide a more up-to-date and realistic version of events, as well as potentially locating assets that would be more difficult to uncover through alternate means.
In most circumstances though, the truly effective investigations incorporate online and offline information sources, both feeding into each other, with the ultimate goal of solving the client’s problem as effectively as possible always at their heart.
