Financial Investigations

Developing an investigative plan, subject profiles, analyzing and charting financial flows, preparing an evidence matrix and utilizing international cooperation channels provides the foundation to conducting an effective financial investigation.

About Financial Investigations

One of the biggest challenges in an asset recovery case is producing the evidence that links the assets to criminal activities (property-based confiscation) or establishes the amount of the benefit derived from an offense (value-based confiscation). To establish this link, practitioners must identify and trace assets or “follow the money” until the link with the offense or the location of the assets can be determined. 

Often, the assets have been moved around the world using schemes that involve offshore centers, corporate vehicles, nominees, intermediaries, “straw men”, and a variety of financial transactions to launder the funds and obfuscate this link. This therefore requires the use of a variety of investigative techniques to trace assets and analyze financial data, especially in order to secure reliable and admissible evidence to prove the elements of the offenses that are under investigation. 

Various investigative techniques followed around the world assist practitioners in these efforts, although jurisdictions may limit or prevent the use of some of these techniques. It is imperative that practitioners determine which techniques are authorized by law and ensure that all legal requirements, policies, and procedures are followed. 

Below is an overview of two core investigative products which should be produced and maintained during a financial investigation. These products are some of those covered during the StAR technical assistance program which combines the theory with case-based exercises designed to apply the learnings by analyzing actual financial case documents.  

Subject Profile

In all investigations, an essential first step is the creation of a subject profile. Practitioners collect and record all basic information related to the target within the case folder and ensure that it is regularly updated. In multijurisdictional cases, subject profile information will help to establish the link to the jurisdiction and is expected to be shared with foreign counterpart agencies. 

Practitioners should collect and maintain the following information during the early stages of an asset recovery investigation:  

  • Name (including aliases), date, and place of birth of target; copies of birth certificates; and passports and national identity cards  
  • Names (including aliases) and dates and places of birth of spouses, children, parents, new partners (if divorced or separated), siblings, spouses of siblings, immediate relatives (uncles, aunts, cousins, grandparents, grandchildren), and spouses’ relatives  
  • Relevant telephone numbers (business, home, mobile), email addresses, and any other contact details which, in some jurisdictions, may be obtained from subscriber information provided to an internet service provider (ISP)  
  • Recent photographs of all targets and associates (including government issued identification)  
  • A fingerprint card  
  • Results of a criminal record search  
  • Academic records, employment history, and association memberships  
  • Results of public-source searches on targets, associates, and affiliated companies, using internet search engines, social media sites, local and international media reports, and libraries  
  • Information from government agencies  
  • Salary statements of the subject from a relevant government employer, if applicable  
  • Real estate records including purchase agreements, mortgages, loan applications, and appraisals  
  • Information identifying banks or bank accounts and other entities that may hold business records. 

As targets are identified and profiles established, practitioners will need to obtain information and financial data on those targets and to ensure that reliable, admissible evidence is secured for trial.  

Collecting Financial Data & Other Evidence Sources 

Depending on the investigation plan, the financial data may include all assets and liabilities, income, and expenses of the targets and their businesses. Documents and other leads need to be gathered from a range of sources, including the internet and other publicly available sources: government agencies; financial institutions, including e-banking facilities; money service providers; law and accounting firms; trust and company service providers; real estate agents; art dealers; insurance companies; business competitors; travel and other reward programs; businesses, relatives, employees, and associates of the targets; and the targets themselves.

Practitioners must also keep in mind that the use of one technique can provide leads or information that will become grounds to take additional measures and create the links to foreign jurisdictions.  A search of a business or residence may reveal evidence that links the target to a domestic or foreign account; evidence that can support a subsequent order to obtain bank account information, having demonstrated the nexus with the target. Physical surveillance may reveal a potential gatekeeper or professional intermediary to be investigated. And documents obtained through a production order on a bank may reveal the names of bank officials or individuals involved in a transaction who may be able to provide additional leads if interviewed. 

Open Source Investigations

Open-source information is generally defined as publicly available information that can be gathered by any legal means, including information available through social media or the internet for free, for a fee, or by subscription. Information from open sources and other government agencies can reveal assets held by targets, their families and associates, and associated businesses.  

Open-source information is used throughout the investigation; from helping to assess the credibility of allegations to submitting admissible evidence at trial. In the preliminary stages, open-source information may be used to develop the investigative plan, including assessing the difficulty of making a successful case and developing the subject profile. It can help in developing leads or identifying domestic or foreign assets held by targets, their families and associates, and associated businesses. It can also assist in identifying associates and potential witnesses and in compiling the subject profile or financial profile as well as laying the foundation for search and seizure warrants. 

Categories of open-source information include the following:

  • Official public records (domestic and foreign): records of incorporation or birth, death, marriage, real property  
  • Private, commercial, or law enforcement databases: property and credit reports; Due diligence or know your customer (KYC) databases
  • Civil litigation, divorce, and probate proceedings (if available)
  • Corporate registrations and corporate filings (including financial statements)
  • Patent and trademark applications 
  • Nonprofit organization registrations
  • Tax filings or retirement plan information (if available)
  • Moveable-asset tracking sites, regarding movement of aircraft,8 marine vessels, and motor vehicles
  • Social media postings 
  • News media (including newspapers, trade journals, society or gossip tabloids, or websites)
  • Educational records, publications of alumni organizations
  • Information describing the confiscation by legal authorities and relevant information from other countries through:
  • Investigative reporting and nongovernmental organization (NGO) reports, for example:

Evidence Matrix

The evidence matrix is a key investigative work product that ensures that the investigation remains focused and that the investigative steps being undertaken are directed at gathering evidence relevant to the alleged crime(s). In the initial stages, the evidence matrix looks to identify evidence the investigator has obtained and how it aligns with the elements of a criminal offense. With complex financial cases, especially where crimes have been committed in foreign jurisdictions, the investigator should expect gaps to exist in the case because the evidence-gathering exercise is not complete. The evidence matrix exercise helps identify those gaps and focus the subsequent work to be undertaken. 

Example of an Evidence Matrix 

Allegation 

(Who is under investigation and a brief description of the allegation being investigated) 

Offense  

Bribery by a Public Official (short title) 

Section  

(Section of the legislation) (Penalty) 

  

Element 

Avenue of Enquiry 

Task 

Who  

When 

An Official (What is the definition of “an official” in the law being applied?) 

Government gazette showing appointment as official 

Obtain certified copy of gazette 

Name of person to undertake enquiry 

When assigned 

Corruptly accepts or obtains (What is the definition and legal interpretation of “corruptly,” “accepts,” and “obtains?) 

  

  

  

  

Any bribe for himself or any other person (What is the definition of a “bribe” and “any other person?) 

  

  

  

  

In respect of any act done or omitted: (What is the definition of “any act done” 

or “omitted?) 

  

  

  

  

In his or her official capacity (What is the definition of “official” and “capacity”?) 

  

  

  

 

As the case develops, the same matrix is then used to summarize the evidence relevant to each element being proved and to provide a cross-reference to the exhibits supporting or providing that evidence. 

Example of an Evidence Matrix 

Allegation 

(Who is under investigation and a brief description of the allegation being investigated) 

Offense  

Bribery by a Public Official (short title) 

Section  

(Section of the legislation) (Penalty) 

  

Element 

Evidence  

Exhibit Reference  

Notes  

An Official (What is the definition of “an official” in the law being applied?) 

A description of the evidence obtained – citing specific statements made by witnesses or reference specific passages of documentary evidence  

Exhibit number – cross reference, with exhibit register. 

  

Anything that may be relevant to the piece of evidence. 

e.g for a document, you may want to reference who will need to produce the exhibit. 

The matrix is also useful as a means to brief newly assigned investigators as well as management on the progress of the investigation, identify where gaps in the evidence gathered may exist, and facilitate strategic decisions on the viability of continuing an investigation. As the case develops, the same matrix is then used to summarize the evidence relevant to each element being proved and to provide a cross-reference to the exhibits supporting or providing that evidence. 

The objective of fully completing the evidence matrix is to provide a succinct summary of the key evidence that will be produced in support of a charge and subsequent prosecution case and to ensure that gaps in the case are identified as early as possible and addressed.