Global Fraud and International Asset Tracing and Recovery

Overview

BakerHostetler has “real depth and breadth of knowledge in cross-border fraud and asset recovery.”

– Legal 500

BakerHostetler’s Global Fraud and International Asset Tracing and Recovery team is recognized worldwide for its unprecedented success in international asset recovery. Over the past decade, the team has recovered tens of billions of dollars, created new law and been on the vanguard of this practice area.

Modern asset tracing and recovery efforts are multijurisdictional endeavors that require a keen familiarity with foreign legal systems and strong relationships with foreign legal experts. Our team is armed with profound depth of expertise in myriad jurisdictions – common law and civil law alike – and uses commercial and international litigators, insolvency practitioners, former prosecutors and tax attorneys to untangle complex frauds. As fraudsters utilize increasingly sophisticated tools and resources to hide assets, so too has our team developed new tactics, reinforced by out-of-the box thinking and creative solutions, to stay one step ahead. Our professionals are experts at deconstructing the complex tax structures, corporate shells and illegal trusts used to move money abroad and are relentless in their pursuit of recoveries.

The Global Fraud and International Asset Tracing and Recovery team at BakerHostetler has successfully represented its clients in hundreds of high-profile matters involving multiple jurisdictions and hundreds of millions of dollars. Our clients are our top priority. We protect their interests and their assets by rapidly responding to the discovery of misappropriated assets and acting as cost-effectively as possible, with a strong focus on crisis management. This team utilizes powerful tools such as asset freeze orders and other prejudgment remedies; discrete but calculated methods of discovering concealed assets and beneficial ownership information; insolvency remedies, piercing sophisticated offshore trusts and structures; negotiating and obtaining discovery across varying privacy regimes; multilateral cooperation agreements and international conventions; tax treaties; and even bringing direct claims against wrongdoers and third-party facilitators. In addition to handling some of the biggest cases in the world, the team has worked for and against some of the biggest companies in the world. Likewise, the team has both worked for sovereign entities and helped clients collect against sovereign entities.

Who’s Who Legal recognizes only 30 to 40 asset recovery attorneys in the United States each year. One of BakerHostetler’s team leaders, Oren Warshavsky, and two other team members, Gonzalo Zeballos and Brian Bash, have been among that group for the better part of the last decade.

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Who We Are

Our preeminent team includes attorneys who have served as ambassadors and members of Congress and have represented the U.S. on behalf of the Department of Justice, the Securities and Exchange Commission, the Department of the Treasury and the Internal Revenue Service, as well as other government entities. These lawyers bring considerable experience to the operational and policy aspects of international asset recovery and forfeiture, money laundering investigations, fraud investigations, and bribery and corruption matters. Our team also includes many foreign language speakers, which gives us the ability to review information and conduct asset discovery in the fraudsters’ and their co-conspirators’ native tongue, allowing deeper and faster access to critical information.

Creating a New Paradigm: The Global Liquidation of Bernard L. Madoff Investment Securities LLC

The biggest and most successful international asset tracing and recovery effort is that which arose in connection with Bernard L. Madoff Investment Securities LLC. When Madoff’s 50-year Ponzi scheme collapsed, investors collectively had lost about $19.5 billion in capital and over $64 billion in paper profits. BakerHostetler partner Irving Picard was appointed as Trustee under the Securities Investor Protection Act and BakerHostetler was the court-appointed counsel.

When the recovery effort began, most people thought that the recovery would be hundreds of millions of dollars. At that time, many claims traders were valuing the recovery at 5 cents on the dollar. Drawing upon BakerHostetler’s Global Fraud and International Asset Tracing and Recovery team’s diverse experience in complex commercial and international litigation, bankruptcy law, white collar criminal investigation, securities litigation, e-discovery and corporate finance, a team was created to unravel the fraud and chase assets around the world. The BakerHostetler team worked to understand 50 years of fraudulent activity without the benefit of firsthand knowledge. The team worked with investigators, forensic accountants and specialists in various jurisdictions. Ultimately, thousands of proceedings were commenced, including recovery actions, discovery proceedings and injunctions to freeze assets. The BakerHostetler team traced funds and participated in discovery and recovery efforts in over 50 jurisdictions, including Argentina, Austria, the Bahamas, Bermuda, Brazil, the British Virgin Islands (BVI), the Cayman Islands, Colombia, China, Cyprus, Denmark, Dubai, France, Germany, Gibraltar, Greece, Guernsey, Ireland, Israel, Italy, Jersey, Kuwait, Liberia, Liechtenstein, Luxembourg, Mexico, Monaco, the Netherlands, Panama, Russia, Singapore, South Korea, Spain, Switzerland, Taiwan, the United Arab Emirates (UAE), the U.K. and the U.S. In addition to appearing in international courts and tribunals, we have cooperated with local law and regulatory enforcement bodies around the globe, navigating unique legal systems and financial regulations. The BakerHostetler team is responsible for much of the law in the fraudulent transfer context, including for the landmark decision stating that the Bankruptcy Code applies extraterritorially to reach foreign transfers.

Although these proceedings have often been referred to as “the Madoff case,” there have been more than 1,200 separate litigations against over 2,000 defendants in more than 50 jurisdictions.

The BakerHostetler team has successfully recovered approximately $14.5 billion to date, with recoveries and distributions never dropping below $230 million in any calendar year. This has been the biggest, broadest and most successful asset recovery effort ever – and there is no close second.

Select Experience

  • Brought claims against a group of hedge funds and their management companies to recover fraudulently transferred assets. More than $1 billion was funneled through labyrinthine structures comprising various international trusts and companies affiliated with a small group of individuals, requiring piercing through beneficial ownership structures in financial and tax haven jurisdictions. Proceedings were held in various jurisdictions, including Bermuda, BVI, the Cayman Islands, France, Liberia, Monaco, Switzerland, the U.K. and the U.S. On behalf of our clients, we recovered over $860 million.
  • Brought claims to recover fraudulent transfers made to two related Cayman Islands-based hedge funds, one of which went into liquidation during the proceedings. In aid of the claims, we successfully froze assets in Austria, Italy, Lichtenstein, Switzerland and the U.K. while continuing parallel proceedings in BVI, the Cayman Islands and the U.S., as well as additional ancillary proceedings in France, Germany, Luxembourg and Monaco. The case involved working with various ministries of justice and appearances in criminal proceedings as a partie civile. On behalf of our clients, we recovered over $500 million.
  • Brought claims against a group of related hedge funds organized in Bermuda, BVI, Guernsey, Ireland and Switzerland. Brought parallel claims against the fund, the fund’s management and service providers in Bermuda, BVI, Ireland, Switzerland, the U.K. and the U.S. The team extensively used the Hague Convention procedures to obtain both documentary and testimonial evidence in Austria, France, Guernsey, Ireland, the Isle of Mann, Luxembourg and the U.K., successfully navigating issues of bank secrecy, local data protection laws, local blocking statutes and the General Data Protection Regulation. Through a series of settlements, we recovered $1.05 billion.
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Professionals

Name Title Office Email
Counsel Los Angeles
Partner Cleveland
Partner New York
Partner New York
Partner New York
Partner Cleveland
Partner New York
Partner New York
Partner New York
Partner New York
Partner New York
Associate New York
Partner New York
Partner Washington, D.C.
Partner Houston
International Counsel Washington, D.C.
Partner New York
Partner New York
Partner New York
Associate Houston
Partner New York
Partner Washington, D.C.
Partner New York
Partner New York
Partner New York
Counsel Chicago
Partner New York
Partner New York
Partner Washington, D.C.
Partner New York
Associate New York
Counsel New York
Partner New York
Partner New York
Partner New York
Associate New York
Counsel Washington, D.C.
Associate Houston
Partner New York
Partner New York
Partner New York
Partner New York
Partner New York

Experience

  • Brought claims against a group of hedge funds and their management companies to recover fraudulently transferred assets. More than $1 billion was funneled through labyrinthine structures comprising various international trusts and companies affiliated with a small group of individuals, requiring piercing through beneficial ownership structures in financial and tax haven jurisdictions. Proceedings were held in various jurisdictions, including Bermuda, BVI, the Cayman Islands, France, Liberia, Monaco, Switzerland, the U.K. and the U.S. On behalf of our clients, we recovered over $860 million.
  • Brought claims to recover fraudulent transfers made to two related Cayman Islands-based hedge funds, one of which went into liquidation during the proceedings. In aid of the claims, we successfully froze assets in Austria, Italy, Lichtenstein, Switzerland and the U.K. while continuing parallel proceedings in BVI, the Cayman Islands and the U.S., as well as additional ancillary proceedings in France, Germany, Luxembourg and Monaco. The case involved working with various ministries of justice and appearances in criminal proceedings as a partie civile. On behalf of our clients, we recovered over $500 million.
  • Brought claims against a group of related hedge funds organized in Bermuda, BVI, Guernsey, Ireland and Switzerland. Brought parallel claims against the fund, the fund’s management and service providers in Bermuda, BVI, Ireland, Switzerland, the U.K. and the U.S. The team extensively used the Hague Convention procedures to obtain both documentary and testimonial evidence in Austria, France, Guernsey, Ireland, the Isle of Mann, Luxembourg and the U.K., successfully navigating issues of bank secrecy, local data protection laws, local blocking statutes and the General Data Protection Regulation. Through a series of settlements, we recovered $1.05 billion.
  • Brought claims to enforce a $180 million default judgment issued in the Southern District of New York, pursuing defendants in Bermuda, BVI, the Cayman Islands, France, Gibraltar and Switzerland. Successfully obtained freezing orders in Gibraltar and Switzerland, freezing over $61 million and having that money repatriated to the United States Court.
  • After completing discovery, obtained a summary judgment ruling for a client on the issue of liability for fraudulent transfers, and then obtained judgment of over $79 million, which we proceeded to enforce against the defendants in Colombia, Costa Rica, Panama and the U.S., navigating competing liquidations in Delaware and New York as well as in BVI, the Cayman Islands and Panama.
  • Represented a defrauded creditor of an investment fund that claimed to invest in Mongolian securities. Helped place the fund into liquidation in Bermuda, and then brought claims against the fund’s management and service providers. Reached a favorable settlement with the fund’s service providers, which were held to account for a large portion of the defrauded creditor’s loss.
  • Represented a client going through divorce proceedings in Israel, whose husband disclosed marital assets of $4 million. Traced assets of over $120 million, including hidden bank accounts in Switzerland and the U.S. and shares in biotech companies in Canada and the U.S., allowing the client to resolve the matter for nearly $100 million.
  • Represented a UAE-based individual whose deceased son was defrauded by business partners. After pretrial discovery, helped mount proceedings in BVI, the UAE and the U.S. to recover the full amounts defrauded as well as damages for the fraud.
  • Represented an Asian sovereign wealth fund and its board of directors, which had lost billions of dollars. The team was required to develop strategies to both recover assets and bring claims against the individuals and entities that aided and abetted the theft from, and fraud committed against, the fund.
  • Brought a claim against investment companies and their management, and successfully froze money in Andorra, Cyprus, Gibraltar, Italy, Lichtenstein, Luxembourg, Monaco and the U.K., and then worked with local governments in connection with restitution efforts. Brought parallel proceedings and engaged in evidentiary proceedings and efforts in Bermuda, BVI, the Cayman Islands, Germany, Gibraltar, Italy, the U.K. and the U.S. On behalf of our clients, recovered over $200 million.
  • Representing a court-appointed receiver in an enforcement action arising from a $90 million Ponzi scheme orchestrated though a cryptocurrency hedge fund. Helping the receiver trace and recover the stolen assets in numerous jurisdictions, including in Australia, the Cayman Islands, China, the U.K., the U.S. and others.
  • Represented a victim of a multimillion-dollar fraud orchestrated by the fraudulent enterprise that took over certain offices of a well-known nonprofit in Switzerland and its Mexican affiliate. Obtained discovery under 28 U.S.C. § 1782 to trace the stolen assets and bolster foreign legal proceedings pending in Mexico, and obtained evidence from others defrauded.
  • Represent a Mexican entrepreneur who is owed millions of dollars by a U.S. company headquartered in Ohio, stemming from an illegal takeover of a Mexican printing company. Obtained discovery under 28 U.S.C. § 1782 to obtain corporate records that will aid the client’s legal proceedings in Mexico.
  • Represent Hellas Joint Liquidators in multijurisdictional bankruptcy proceedings and actions, including in Luxembourg and the U.K. and a U.S. Chapter 15 proceeding, in order to recover over €1.25 billion from various funds that liquidated Hellas and left it insolvent, to the detriment of its creditors. The case involves the unraveling of complicated transactions and the management of parallel proceedings brought by various stakeholders and creditors.
  • Represented a distressed debt investor in an asset recovery action associated with a series of properties and a luxury hotel chain and in a series of proceedings in BVI, India, Pakistan, the U.K. and the U.S. Withstood an aggressive attack by the wrongdoer, using a creative approach to recover the assets for the benefit of the client by utilizing international discovery and cross-border insolvency tools.
  • Represent a consortium of limited partners with investments of over $500 million in multijurisdictional actions to recover from various parties, including auditors, banks and management for assets dissipated due to these parties’ fraudulent activities, breach of duties and gross negligence.
  • Traced $200 million to Swiss bank accounts and convinced Swiss courts to release account information, which showed transactions between a Texas oil billionaire on the one hand and King Abdullah and his brother-in-law on the other hand, ultimately securing a $197 million judgment.
  • Traced $20 million through various jurisdictions, and ultimately froze an account in Luxembourg, leading to a favorable settlement.
  • Enforced a multimillion-dollar arbitral award against a Taiwanese company. Leveraging public and private information and working across jurisdictions, utilized information from the Taiwan and New York stock exchanges to seize shares of stock and successfully attached assets in BVI, New York and Taiwan.
  • Defended the Peruvian government in connection with collection efforts against numerous judgments, totaling over $10 billion, which were obtained and being enforced throughout the world.
  • Enforced a $10 million Canadian arbitral award obtained by an Indian charter company against a U.S. charter carrier.
  • Represent a Chinese company in its asset recovery action in Denmark, the UAE, the U.K. and the U.S. for money stolen as part of a scheme using well-known entertainers.
  • Represented a Chinese company against an Indian company in a successful recovery of stolen goods worth millions of dollars.
  • In connection with a three-way fight over ownership of Nazi-looted art, represented clients that claimed possession of well-known works by the artist Egon Schiele, including one piece valued at over $20 million. Developed provenance and recovery history through work in Austria and the U.S.
  • Worked on behalf of several clients to recognize and enforce foreign money judgments in various federal and state jurisdictions through the U.S. and around the world. The recognition actions adeptly present the civil procedures of the foreign jurisdictions to ensure that the client receives the full benefit of the foreign judgment.

Recognition

  • Three team members among a select group of attorneys in the United States recognized in asset recovery every year for more than a decade by Who’s Who Legal.
  • The Legal 500 United States: Dispute Resolution: International Litigation (2017 to 2020).
  • Latinvex Top International Law Firms in Latin America (2017 to 2021).
  • Recognized as one of the top law firms for client service, BakerHostetler was named to the 2020 BTI Client Service 30 for the sixth consecutive year.

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