The Offshore Assets Play Book
Clients come to us all the time with the suspicion that their spouse has stashed assets offshore. The problem is that they are not sure where.
If there is one thing that is as difficult as getting money returned from an overseas location, it can be figuring out which overseas location we are even going search.
We recently had a client who thought her husband’s assets could be scattered over five Asian jurisdictions. Clearly she didn’t have the money to look at all five, so we recommended doing our normal triage to see how we could get her the most use from her limited budget.
Our methodology for triage:
- For offshore, start onshore. We wrote about this last year on this blog, and the advice still holds. The best clues you will often find for offshore finances will be in the U.S., where not only are public records more plentiful, but the documents tying a spouse to offshore assets could be lying around your own house or stored electronically on a jointly-owned computer. Our clients have found Liberian company documents stuffed in drawers and school bills paid by companies in Bermuda.
- Assess the ease of seizure. If you can’t look in every country, why would you start with a place that has slow-moving and/or corrupt courts? It’s not enough to find the asset; you have to be able to take it. I would much rather have a client spend money on a lawyer in the British Virgin Islands than in India or the Philippines. It will cost more, but it won’t take 10-20 years to win.
- Assess the probable size of the asset. This can be hard to do if there is an unknown amount of cash sitting in a bank, but cash is one of the hardest things to get your hands on unless you can win a freezing order. This is easier in jurisdictions with better rule of law but also more expensive court systems (see step 2). If you are looking at real estate, it may make sense to do a small amount of work to appraise it before you decide to spend much more to prove ownership and then try to seize it.
- Figure out whether the detection of the assets is more valuable to you as assets seized or leverage against the other side. If someone has stashed assets abroad and has not declared them on a tax return, that could motivate him toward a more generous settlement. On the other hand, if you filed taxes jointly, you too could be liable for evasion and should consult both a family law and tax attorney before proceeding further.
Other scenarios are less frightening. We once had a client whose husband turned out to have an offshore company as well as his publicly-traded company in the U.S. Our leverage was to figure out that he had awarded his offshore company a consulting contract with the public company, but hadn’t disclosed it as a connected transaction. This was not news his shareholders would have been happy to hear.
Only when you have taken a cold hard look at all the low-hanging informational fruit should you put investigative resources into offshore jurisdictions.
Want to know more?
- Visit charlesgriffinllc.com and see our two blogs, The Ethical Investigator and the Divorce Asset Hunter;
- Look at my book, The Art of Fact Investigation (available in free preview for Kindle at Amazon);
- Watch me speak about Helping Lawyers with Fact Finding, here.
