Winning the information wars. Collecting, sharing and analysing information in asset recovery investigations
| Date | 16 October 2007 |
| Published date | 16 October 2007 |
| Pages | 372-404 |
| DOI | https://doi.org/10.1108/13590790710828136 |
| Author | Anthony Kennedy |
| Subject Matter | Accounting & finance |
Winning the information wars
Collecting, sharing and analysing information
in asset recovery investigations
Anthony Kennedy
Northern Ireland for the Assets Recovery Agency, Belfast, UK
Abstract
Purpose – Recognising that financially related, personal information is the raw material of
successful asset recovery investigations, the paper aims to examine the mechanisms which
investigators may use to gather such information and the legal barriers to information gathering.
Design/methodology/approach – The paper draws on the author’s own practical experience of
involvement in criminal asset recovery proceedings in the UK.
Findings – It is the State’s obligation to deliver criminal asset recovery in the most efficient and
cost-effective way, consistent with privacy rights and obligations, providing value for money in what
is delivered by law enforcement. Doing so will require making better use of financial information held
by public sector agencies. There must be no form of financial information which is beyond the reach of
an investigator in an appropriate case. If there is, criminals will utilize that weakness to place criminal
assets where information in respect of those assets cannot be obtained. If asset recovery is to be
successful, it is essential that – to use the metaphor of financial information as “dots” – investigators
are able to collect the dots, connect the dots and share the dots.
Practical implications – The paper identifies: the need to keep the legal tools used to obtain
information under regular review; eight core information skills which investigators must develop for
effective asset recovery; and the importance of a multi-disciplinary approach in analysing financial
information.
Originality/value – The paper explores UK criminal asset recovery from an informational
perspective.
Keywords United Kingdom,Crimes, Financial control, Asset protection
Paper type General review
Introduction
... it’s impossible to move, to live, to operate at any level without leaving traces, bits,
seemingly meaningless fragments of personal information. Fragments that can be retrieved
and amplified ...(Gibson, 1988).
Successful asset recovery requires the combination of these information fragments. An
information-perspective on asset recovery recognises that financially related, person al
information is the raw material of successful investigations[1]. While jurisdictions
create rules to protect information pertaining to their citizens, criminals seek to benefit
from those rules to prevent information regarding their criminal proceeds from falling
into the possession of financial investigators. The result is: the information wars.
Financial investigations are information-intensive. They involve both public and
private sector material, for example taxation records and bank-account information,
which demonstrate money movements, together with any relevant information as to
lifestyle. Any record that provides information concerning money may be significant.
The investigator seeks to discover where money came from, who obtained it, when it
The current issue and full text archive of this journal is available at
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JFC
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Journal of Financial Crime
Vol. 14 No. 4, 2007
pp. 372-404
qEmerald Group Publishing Limited
1359-0790
DOI 10.1108/13590790710828136
was received and where it was stored, deposited, or transformed into other forms of
property. Since, those who commit acquisitive crime continuously grow more
sophisticated in their laundering activities, this requires investigators to acquire new
and specialized financial investigation tools, designed to obtain and interpret
information which criminals wish to hide. This paper examines financial investigators’
need for information and how that information is obtained and analysed.
Financial investigations may be classified into two categories. Firstly, “follow the
money” investigations, where investigators seek to discover the location of specific
funds. This will take place, for example, where the proceeds of a fraud are being traced.
Secondly, “net worth” investigations where investigators seek to identify all property
owned by an individual. These will occur, for example, in a civil recovery or
confiscation investigation. A “net worth” investigation may contain several “follow the
money” investigations once specific sums of income have been identified and
investigators attempt to trace their history.
Both types of investigation have similarities in terms of the tools that investigators
use, but are different in that “net worth” investigations will be far more
information-intensive. Conducting a “net worth” investigation consists of weaving
together disconnected pieces of financial information to reveal broader patterns
regarding someone’s financial affairs. Seen from an information perspective (and using
the metaphor of information as “dots”) the role of a financial investigator is to “collect
the dots” “connect the dots” and “share the dots” (and in a form where they are
evidentially admissible) (Libicki and Pfleeger, 2004). A significant problem for
investigators is that the dots may exist widely separated from each other. This
is sometimes referred to as information being kept in separate “silos” or as
“compartmentalisation” of information[2]. The key to the initial stage of investigation
is bringing related but isolated facts into proximity with each other in order to help
analysts detect significant patterns or connections. A conclusion only becomes
possible once financial information from separate sources is combined.
Legal barriers to information gathering
While investigators will wish to obtain information, they must ensure that they do so in
a lawful manner. There are a number of legal barriers which restrict the transmission
of information, the principal of which are the duty of confidentiality, the Human Rights
Act 1998, the Data Protection Act 1998 and the issue of vires. These are not matters to
be considered sequentially, but rather impact on each other.
Duty of confidence
The law of confidence is a Common-Law concept. A duty of confidence arises when one
person is provided with information by another in the expectation that the information
will only be used or disclosed by the former in accordance with the wishes of the latter.
The duty depends on the broad principle of equity that a person who has received
information in confidence shall not take unfair advantage of it[3]. The tort of breach of
confidence deals with unauthorised use or disclosure of certain types of confidential
information and may protect it on the basis of an actual or deemed agreement to keep
the information secret. For a duty of confidence to exist, two characteristics must be
satisfied. Firstly, the information in question must have the necessary “quality of
confidence”. The nature of the information and the gravity of the circumstances are
Winning the
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373
relevant – the law will not intervene to protect trivial tittle-tattle, however
confidential[4]. With regard to personal information, it should therefore not be in the
public domain or readily available from another source and should have a certain
degree of sensitivity. Secondly, the information must be communicated in
circumstances giving rise to an obligation of confidence, although this may be
implied from circumstances. An obligation of confidence is imposed by law if
the circumstances are such that a person knew, or ought to have known, that the
information was to be treated confidentially.
The duty of confidence owed by bankers is well established[5]. Tournier v. National
Provincial and Union Bank of England[6] established that the bank owed its customer a
legal, and not merely a moral, duty of confidentiality. However, Tournier recognised
that the duty was qualified by four exceptions: where disclosure could properly be
made under compulsion by law; where there was a duty to the public to disclose;
where the interests of the bank required disclosure; and where the disclosure was made
by the express or implied consent of the customer. In some jurisdictions, the
confidentiality accorded to bank information exceeds that available under the usual
duty of confidentiality. Such jurisdictions are described as bank secrecy jurisdictions.
Bank secrecy laws have been criticised as “a criminally malevolent anachronism”[ 7]
and as “a godsend for the criminal”[8] and there are international pressures
against them.
Legal privilege is a particular form of confidentiality. It has been said that clients
seeking advice must be able to speak freely to their lawyers secure in the knowledge
that what they say will not be divulged without their consent and that, without this
privilege, clients could never be candid and furnish all the relevant information that
must be provided if lawyers are to advise their clients properly[9]. Privilege has been
held to be a fundamental condition on which the administration of justice as a whole
rests[10], a fundamental human right guaranteed by Article 8 of the European
Convention on Human Rights[11], and a part of European Community law[12]. Of
course, to extend privilege without limit to all solicitor and client communication upon
matters within the ordinary business of a solicitor and referable to that relationship
would be too wide[13]. Privilege therefore means that communications between a
solicitor and his client relating to the transaction in which the solicitor has been
instructed for the purpose of legal advice will be privileged, even if they do not contain
advice on matters of law, provided that they are directly related to the performance by
the solicitor of his professional duty as legal adviser of his client. Legal advice privilege
covers communications between lawyers and their clients whereby legal advice is
sought or given. It depends on there being a relationship of confidence between client
and lawyer and on there existing the “relevant legal context” for the advice and
confidentiality[14]. To try and ensure that legal privilege is not manipulated by a
dishonest client, privilege does not exist where the communication has been made with
a view to furthering a criminal purpose[15]. In Francis and Francis v. Central Criminal
Court[16] the House of Lords held that, even where the intention to further a criminal
purpose belonged to a third party, the communications were not privileged. The
privilege may, of course, be waived by the client and a practice of the authorities
requiring such a waiver has developed in certain US prosecutions[17].
From an asset recoveryperspective, certaindocuments held by a legal adviser may not
be covered by privilege. Importantly, this will include many conveyancing documents.
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