Funds tracing investigation

Background

FRP was instructed by solicitors representing claimants in UK High Court proceedings. One of the claimants had made a number of loans to fund property development activities that had only been partly repaid.

The claimants asserted that a substantial portion of the funds were not applied to the development projects as intended, but were misappropriated for the benefit of the defendants. The claimants also brought additional claims against the defendants of deceit, breach of fiduciary duty, dishonest assistance, breach of contract, unjust enrichment and conspiracy.

We were instructed to perform a funds tracing exercise in order to understand how the loans were used.

Action

The team undertook a review of electronic and hard copy documentation including bank statements, supplier invoices and payment confirmations. Using a methodology agreed with our instructing solicitors, we traced the loan monies from the claimants’ bank accounts through a number of entities and identified the ultimate recipients.

We identified instances where, shortly after receipt of the loans, the defendants used the monies to purchase goods or services for unrelated projects and/or their own benefit. We summarised and documented our findings in an affidavit, which supported the claimants’ application for a worldwide freezing order against the beneficiaries of the funds.

Outcome

A worldwide freezing injunction was successfully obtained. The parties settled the dispute and a substantial proportion of the loans was recovered for the claimants.