Essential Intelligence: Fraud, Asset Tracing & Recovery

In recent years, the number of multinational fraud cases has increased significantly.

Companies and private individuals often find themselves suffering immense damages due to complex international fraud schemes in which the perpetrators reside abroad and assets are moved around internationally. Like many criminal law systems, German criminal law punishes fraud and regulates a whole range of special fraud offences. However, this alone is of only limited help to those affected. One of the main interests of damaged corporations or private parties usually is to recover their assets. Of course, German law also provides regulations for this purpose. However, before lost assets can be secured and recovered, they first have to be traced, which often proves difficult.

The problems associated with the tracing and recovering of assets are becoming more and more significant as the increasing use of technology constantly opens new ways for fraudsters to deceive their counterparties and enrich themselves. For example, cryptocurrencies are being used more and more to commit fraud offences. In addition, COVID-19 led to an increase in fraud crimes. Fraudsters took advantage of the exceptional situation at the time in a wide variety of ways. In Germany, fraud was, inter alia, perpetrated in the context of obtaining bridging loans or obtaining short-time workers’ benefits and COVID-19 aid.

Against this background, the investigation of criminal fraud and the associated tracing and recovery of lost assets is certainly a long-runner.

This chapter sets out to provide an overview of the tools for tracing assets, securing and recovering them. First, an overview of the legal framework is given before important steps in connection with fraud and the tracing and recovery of assets are discussed. This is followed by a discussion of the extent to which civil and criminal measures can be usefully combined to recover assets. Finally, the central challenges in connection with acts of fraud and asset recovery are addressed before the second part of the chapter deals with current problems and developments.

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