FraudNet, the ICC-sponsored international network of specialist fraud and commercial crime law firms, is starting to attract media interest. Journalist Alexander Hauk recently published this insight into its work in a German newspaper.
FraudNet, the ICC-sponsored international network of specialist fraud and commercial crime law firms, is starting to attract media interest. Journalist Alexander Hauk recently published this insight into its work in a German newspaper.
They work for governments, banks, companies and businessmen. Their task is to help victims of white collar crime. They specialise in pursuing misappropriated assets abroad and returning them to the owners.
Thirty-seven attorneys in 34 countries worldwide have built a network called FraudNet to fight fraud and corruption. In Germany, Attorney-at-law Mr. Bernd Klose from Friedrichsdorf represents the association: "Practically all major cases today are of a transnational nature. And we work at the transnational level, just as the criminals do," says Klose, as he and his four associates describe the cooperation and relate their experiences.
When Klose talks about his work, one cannot help calling to mind the image of a secret agent: large sums of money, overseas stays - for example in the Bermudas or British Virgin Islands, cases with a criminal background. In many ways, his work is indeed similar to that of an agent.
"In most cases, though, there is no violence," Klose says about FraudNet. "Neither is it a government agency," he explains. It is actually a network of attorneys specialising in white collar crime that was established in early 2004. Its parent organisation is the International Chamber of Commerce (ICC) in Paris, which has more than 7,500 members in over 130 countries.
Criminals have long since been 'working' internationally: "In one lawsuit, we were active in ten different countries," says FraudNet member Steven Philippsohn, whose law firm is domiciled in London. For contractual and legal reasons neither he nor his colleagues may specify any details. But he reveals that one of his many clients includes the British government.
"Nowadays, money can be transferred in a matter of seconds to accounts in other countries by a mere push of a button," says the legal expert. Victims of white collar crime, he says, accordingly need the help of a legal system that is able to respond quickly and at an international level. The cause of so many problems in international cases is the differences between legal systems, which are a challenge to the investigators. The translation of the necessary letters rogatory alone takes up so much time.
Whereas in Germany the prosecuting attorney also has executive powers in cases of fraud with damage in civil law, in countries with Anglo-Saxon legal systems, recovery assistance in the case of white collar crime falls under civil law. In the German legal system, recovering the misappropriated assets is not secondary, but the priority is finding the perpetrators.
According to Philippsohn, the Anglo-Saxon legal system that prevails in England, the US, Australia and Canada, and ironically most of the offshore sites that are a perfect hiding place, is best for dealing with the pursuit of misappropriated assets. Indeed, court requests for information and arrests can be made very quickly and without the knowledge of the perpetrator, in comparison with the law systems based on Roman law that are more common in Europe. "Sometimes within 24 hours of the assignment", says Philippsohn. In their work, the lawyers often resort to legal aids such as the Norwich Pharmacal Order (Information Injunction), the Anton Piller Order (Search Order) and the Mareva Order (Freezing Injunction). For example, with the Anton Piller Order, the experts can search the offices and residence of the suspect and seize evidence by court order, without a hearing of the opposing party. But what sounds easy in theory is highly complicated in reality. Ultimately, the judge has to determine on the basis of the information compiled by the FraudNet members that an offence was committed.
Cooperating with authorities
FraudNet members work together with the authorities as far as possible. "In general we have found that government authorities now tend to greater international cooperation," says FraudNet member Edward Davis. One reason for this is that the cases are becoming increasingly more international, and the other is that FraudNet is becoming better known to the government authorities, making the exchange of valuable information possible. "When we represent governments, the willingness of the authorities in other countries to cooperate seems to be even greater," the attorney from Miami observes.
Davis regards FraudNet as an expansion of his own law office: "I have contact with attorneys in other countries who I know have the right qualifications." The conditions for acceptance into the network of specialists are actually regarded as a challenge. "The Standards and Procedures Committee made up of members, a type of Chamber, sets the conditions for acceptance, examines and interviews the candidates applying for acceptance and makes the final decision regarding their acceptance," says Peter Lowe, Director of FraudNet and a founder of the network. The purpose of the strict selection is to ensure that only experts can profit from the network. In addition to the Chamber already mentioned, there is the Strategic Planning and Marketing Committee, whose FraudNet members search internationally for suitable candidates to be accepted into the network. One of Lowe's tasks is also the organisation of FraudNet conferences. Twice a year, members meet in different cities all over the world to exchange ideas and experiences and to get to know each other better.
Pursuing claims
In their work, they depend on each other. For Edward Davis, one of the most significant cases so far has been to represent the government of Trinidad and Tobago in a major corruption case. "We were able to handle the case with the help of FraudNet members from Liechtenstein, Switzerland, Panama and London."
An assignment usually takes between two to four years of work. Davis explains that the majority of clients find out about his law office through recommendations by other attorneys. He believes that the countries in the Anglo-Saxon legal system are more advanced in the area of fighting fraud than the legal systems of Continental Europe. "Whereas the countries in Continental Europe tend to rely on the work of government authorities, the countries in the Anglo-Saxon legal system make it possible for victims to pursue their claims directly."
Bizarrely, the attacks of 9-11 had a positive effect on the work of the FraudNet members. Since terrorists use the same channels as other criminals, numerous laws were made stricter in many countries as a consequence. "These laws now allow more aggressive action against defrauders, impostors and swindlers," explains Davis.
Large damages
FraudNet cases frequently concern large amounts of money. "Several members are currently working on a case of white collar crime against a bank in Brazil with damages of $3 billion and consequences in the US, Antigua and other countries," reports attorney Martin Kenney, who has a law office in the British Virgin Islands. Kenney calls for countries to have internationally uniform laws which obligate banks and other financial service providers to make their documents accessible to victims of fraud and white collar crime and their attorneys. "By allowing victims to inspect the bank documents, the perpetrator's chances of misappropriating the victim's assets can be considerably reduced," Kenney believes.
In their work, FraudNet members sometimes experience odd cases: "One morning I got an assignment against a perpetrator who was on his way to the airport to leave the country", says Philippsohn. While one of the attorney's colleagues applied to the court for an urgent arrest, Philippsohn drove to the airport, where the arrest order was faxed to him. With this paper in hand, he boarded the plane, which was ready for take-off and was able to persuade the perpetrator to get off the plane.
"Actually, he didn't really have to get off the plane, but it seems he was so stunned by the surprise visit," the attorney explains. Shortly thereafter, the case was able to be successfully brought to conclusion - another small victory for FraudNet and its defrauded clients.
FraudNet Brochure (download the PDF file)
Fraudnet Brochure Chinese translation (download the PDF file)
Fraudnet Brochure Russian translation (download the PDF file)
Fraudnet Brochure Portuguese translation (download the PDF file)
FraudNet presentation for the Dublin Fall 2012 Conference (download the PDF file)
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