Crypto assets use a variety of technologies including but not limited to blocklattice, blockchain and distributed ledger technology. The fact that these sources of technology are accessible to the public and are permanent, makes tracing and tracking these transactions possible. However, privacy coins as well as other unique and obscure features of particular crypto assets remain attractive to individuals who seek to make payments or hide wealth without a trace.

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Sources of Information

Sources of Information in Asset Tracing and Recovery

The relevant set of sources of evidence in asset-tracing and recovery when considering an engagement involving crypto assets is unique. It differs from the traditional methods of asset-tracing and recovery and frequently includes the following:

  • Electronic evidence (emails, text messages, phone records, etc.)
  • Internet searches
  • Cold storage devices
  • Banking records (as an asset-tracing tool, not recovery)
  • Investigations into hidden private keys
  • Blockchain, Block Lattice and Distributed Ledger Technology asset-tracing tools
  • Tracing the flow and sequence of crypto assets to exchanges and freezing exchange held accounts
  • Review of discord, online crypto forums and groups

Legal Processes

Legal Processes to Assist in Asset Tracing & Recovery

At nagel + associates, we work with clients and their legal counsel by implementing a variety of tools, mechanisms and tactics in order to identify and track down funds and other assets in order to facilitate their eventual recovery. We have extensive experience in assisting legal counsel to obtain court orders, injunctions, and other nuanced examples of relief, including:

  • Norwich Pharmacal orders
  • Anton Piller orders
  • Mareva injunctions
  • Wagg motions
  • Certificates of Pending Litigation

We support our clients and legal counsel by:

  • Drafting and reviewing orders to ensure that all potentially relevant financial records are included
  • Preparing reports, affidavits, and schedules in support of motions
  • Assisting legal counsel with the execution of orders
  • Performing forensic analysis on material obtained through legal proceedings in order to identify potential crypto assets, as well as tracing the movement and flow of funds to and from the crypto asset
  • Performing forensic accounting and computer forensic analysis of materials obtained through legal proceedings, and preparing reports, affidavits and schedules which lays out our findings based on this analysis
  • Working with our contacts in various foreign jurisdictions throughout the world, allowing us to trace assets globally

Money Laundering

Hiding Assets from Spouse

When it comes to matrimonial breakdowns, many individuals invariably attempt to hide assets from a spouse. This has become a common form of fraud, and must be managed with the same diligence and professional approach as other traditional frauds.

An individual seeking to identify assets or income hidden by their former spouse, as well as tracing the movement of these assets for purposes of recovery in the context of matrimonial proceedings, can be an especially unnerving task. Therefore, when assets are at risk of being dissipated or concealed, it is imperative that swift and decisive action is taken. The trusted forensic accounting firm of nagel + associates have the knowledge, experience, and capability to assist clients who seek to identify, trace and recoup their most prized assets, particularly in matrimonial disputes.

Like many matrimonial fraud schemes, Boaz never intended to conceal money from his wife Izzo. Of course, Boaz also never imagined that he would be getting a divorce. Their marriage had been on shaky ground for a prolonged period of time, and it was becoming evident to Boaz that a divorce was imminent.

Boaz concocted a scheme in order to hide and conceal money from his wife (and her lawyers) before the divorce proceedings commenced. He spent months researching all of the various ways he could accomplish this goal, while at the same time attempting to cover his tracks and leave as little of a footprint. He wanted to be sure that tracing his financial improprieties would be as difficult as possible.

Boaz considered: overpaying his credit cards; overpaying his lines of credit; overpaying the Canada Revenue Agency; and withdrawing small sums of cash over an extended period of time and subsequently hiding the money from Izzo. He also contemplated stashing funds in a family member or friend’s name, or moving assets and money overseas.

Finally, Boaz landed on Bitcoin, like so many others before him. This was a financial product that he had heard about for years, yet the underlying mechanics were quite unfamiliar to him. However, since Izzo was not tech savvy, he decided that he was going to hide his money by buying Bitcoin.

Boaz had no experience in cryptocurrency, and decided to research everything and anything about bitcoin. For example, how to purchase it, and where/how to store it. He performed countless internet searches, viewed YouTube videos on this topic, joined reddit and several discord crypto-related chat groups. He also downloaded different crypto-related applications onto his phone and bought the necessary cold storage hardware wallet in order to safely store the crypto asset (bitcoin) that he had decided to buy.

Boaz was now ready to start accumulating bitcoin and loading it onto his cold storage wallet. Naturally, Boaz did not want to keep all of this from Izzo, and so he purchased small amounts of bitcoin through his multiple credit cards. To further conceal his behaviour and to avoid arousing suspicion, he e-transferred funds directly from his personal bank account into applications where he could purchase bitcoin, located bitcoin ATM machines where he could purchase bitcoin directly and found individuals online who were anxious to meet him in person for peer-to-peer transactions.

Relevant Evidence:

  • Obtaining and reviewing banking records
  • Acquiring a forensic image of electronic devices

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