Domestic Asset Tracing and Freezing for the Forensic Accountant

• In Event: Bias in Asset Valuations, Stolen Identity and Domestic Asset Tracing

Abstract

The rate of recovery of stolen and hidden assets from fraud and other schemes is low. Scant attention has been paid in the forensic accounting literature to asset tracing,freezing, and other recovery steps to compensate fraud and hidden asset victims for their losses. This paper highlights and analyzes two important aspects of domestic (onshore) asset recovery: asset tracing and freezing. Detailed discussion is provided on the importance of legal counsel, parties to whom to trace assets and seek their recovery, conducting asset tracing by forensic accountants (non-law enforcement), including the mining of social media sites, places to search for information, use of information brokers/asset search firms, business asset searches and common places to hide assets. Asset freezing measures available in the U.S. such as attachment, replevin, garnishment, lis pendens, and injunctions are also discussed and analyzed. Numerous valuable websites and databases that are used by forensic accountants are noted throughout the paper. The article concludes with an analysis of the importance of the extension of the attorney-client privilege to non-testifying forensic accountants (since they are often hired by law firms).

Authors

• Carl Pacini, University of South Florida- St Petersburg

• Debra Taylor Sinclair, University of South Florida- St Petersburg

• William Hopwood, Florida Atlantic University