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Fraudsters cannot hide behind a corporate shield in Canada when they use a company for an "illegal, fraudulent or improper purpose." The Ontario Court of Appeals in Shoppers Drug Mart Inc. v. 6470360 Canada, Inc., 2014 ONCA 85, addressed the situation where Shoppers Drug Mart ("Shoppers") contracted with the defendant Energyshop Consulting to manage and pay utility bills for Shoppers' stores nationwide. Michael Beamish ("Beamish") described himself as President of Energyshop, but Energyshop was not incorporated. There was no formal…

Understanding Enhanced Asset Protection Structure in Bermuda It is important to know and understand the laws for asset holding when trying to recover claims. New legislation in Bermuda seeks to stimulate the trust industry and to attract international customers who wish to retain a certain level of control over their trusts. The Trusts (Special Provisions) Amendment Act 2014 enhanced the reserved power trusts where a settlor may retain fairly extensive powers over the trust. The new law adds specific provisions…

In a recent decision, Relfo v. Vasani (2014) EWCA Civ 360, the Court of Appeal was confronted with the Liquidator being unable to show evidence of each transaction transferring monies through various bank accounts and ultimately being received by the recipient. There, the Liquidator of Relfo sought funds belonging to Relfo, which were misappropriated and paid to accompany called Mirren. A director of Relfo had close ties to the Vasani family and at a time that Relfo owed substantial monies…

Section 550 of the US Bankruptcy Code allows for the bankruptcy trustee to recover for the benefit of the estate property transferred to an immediate transferee that can be avoided under other Code provisions. In a recent matter in the Madoff bankruptcy proceeding, Sec. Investor Prot. Corp v. Bernard L. Madoff Inv. Secs. LLC, 2014 U.S. Dist. Lexis 91508 (S.D. N.Y. July 6, 2014), the bankruptcy trustee sought to recover funds that had been transferred from Madoff Securities to certain…

There are numerous international banks with offices in New York or that do business in New York. Recently in Mashreqbank PSC v. Ahmed Hamad A1 Gosaibi & Bros., 2014 N.Y. Lexis 705 (N.Y. April 8, 2014), the Court of Appeals clarified the reach of jurisdiction in New York when a foreign national moves money through a bank in New York as a part of a fraudulent transaction. There, the Court of Appeals dismissed an action arising from an international swap…

When a case is brought in the Cayman Islands involving a disputed question of fact, a litigant is entitled to discovery of documents relevant to the issues raised in the dispute. Relevant means if the documents assist one party, however slightly, to advance his case. The definition of documents is broad to include, paper, computerized including metadata, audio or video, and contents of portable devices. The rules contemplate discovery to be given two weeks after the pleadings close and the…

When a fraud has occurred, a private investigator is often engaged by counsel to gather evidence about the fraud and the fraudsters. If events take you to Canada, one must understand the law surrounding privilege and privacy and be cautious to avoid prejudicing the case. An investigator must be retained "for the dominant purpose of litigation" for his work to be protected from disclosure by litigation privilege. Blair v. Wawanesa Mutual Insurance Co., 1998 ABQB 1025. To maintain the privilege,…

In the past, courts had decided that RICO's reach depended upon the location of the enterprise. European Community v. RJR Nabisco, Inc., 2014 U.S. App. LEXIS 7593 (2d Cir. April 23, 2014) redirected the focus to predicate acts. There, plaintiffs alleged that RJR Nabisco and related entities ("RJR") managed and controlled a global money-laundering scheme involving organized criminal factions in Russia and Colombia. Plaintiffs alleged that RJR employees travelled from the U.S. to Europe, Central America and other locations to…

A recent decision in the Southern District of New York, Wultz v. Bank of China, 2014 U.S. Dist. Lexis 1841 (S.D.N.Y. February 13, 2014), required a non-party bank to prepare a Rule 30(b)(6) witness with information that was only available overseas. There, the Bank of China subpoenaed Bank Hapoalim, a non-party Israeli bank, requesting documents pertaining to transactions and wire transfers involving an alleged Islamic Jihad leader. Bank Hapoalim moved to quash, arguing that Rule 45 did not require it…

On April 3, 2014, in Matter of Kapon v. Koch, 2014 N.Y. Slip Op 02327, the New York Court of Appeals clarified the standard for enforcing subpoenas to nonparties in civil litigation. There, William Koch commenced a fraud action in California and served nonparty subpoenas for deposition on two New Yorkers who moved to quash the subpoenas. The Court held that "so long as the disclosure sought is relevant to the prosecution or defense of an action, it must be…

Provisional remedies are a powerful tool for creditors. In New York, two recent cases have limited a creditor's ability to attach funds of a defendant at a foreign bank with a correspondent banking relationship with a New York bank. The premise of the attachment is that a foreign defendant has an attachable property interest in its "share" of its bank funds maintained with its correspondent bank in New York. In Toisa Ltd v. PT Transamudra Usaha Sejahtera, 13 CV 1407…

In Italy, Article 671 of the Italian Civil Code permits a precautionary seizure of property if a creditor has a "valid fear of losing the security for his claim." The order will prohibit the debtor from disposing of all of his assets and not just specifically identified ones. A freezing order can be granted if: 1) the Court is persuaded that the claim has a prima facie basis based on the documentary evidence presented, and 2) the Court is persuaded…