Seize and Desist podcast

S&D E1 - Demystifying the asset recovery sector: separating fact from fiction

Author
Lo Furneaux
Digital Content & Operations Coordinator

In this inaugural episode of "Seize & Desist" host Aidan Larkin (Co-Founder & CEO of) presents a compelling perspective on the challenges and significance of asset recovery.

This field might fly under the radar of mainstream discussions, yet it has an enormous impact on societal funding for essential services like healthcare, education, and infrastructure. With less than 1% of the estimated trillions in illicit financial flows being recovered around the world, there is a pressing need to examine why such a crucial sector is failing and what can be done to enhance its effectiveness.

Asset Recovery is not just about arresting criminals and publishing sensational headlines, it is the intricate process of returning stolen wealth to victims and the public purse. Aidan Larkin skillfully deconstructs the complexities of the industry, stressing the alarming fact that crime does pay — and pays well for criminals, due to the vast amounts of unrecovered assets.

The episode delves into potential reasons behind the inefficient recovery rates, from a lack of understanding and the fear of appearing ignorant to an overemphasis on the initial seizure rather than the subsequent economic restitution.

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Timestamps

01:00 | The global asset recovery sector is failing

03:00 | Less than 1% of global illicit financial flows are recovered

05:00 | Asset recovery affects victims and communities

09:00 |  Asset recovery in the context of digital and crypto assets

11:00 | Aidan Larkin’s background and unique perspective on asset recovery

13:00 | FATF's new focus on asset recovery

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About Our Host

Aidan Larkin is a prominent figure in the global asset recovery sector, boasting over 16 years of experience in the field.

With a professional background as a criminal tax investigator, he has a diverse history of working on the investigative side and managing seized assets. Aidan is the co-founder and CEO of Asset Reality, bringing a unique perspective to the industry given his personal experiences in Northern Ireland during the troubles and his involvement with community initiatives financed by proceeds of crime funding.

His international work with various government agencies equips him to offer an in-depth understanding of different jurisdictional approaches to asset recovery.

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Resources Mentioned

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Disclaimer

Our podcasts are for informational purposes only. They are not intended to provide legal, tax, financial, and/or investment advice. Listeners must consult their own advisors before making decisions on the topics discussed.

Asset Reality has no responsibility or liability for any decision made or any other acts or omissions in connection with your use of this material.

The views expressed by guests are their own and their appearance on the program does not imply an endorsement of them or any entity they represent. Views and opinions expressed by Asset Reality employees are those of the employees and do not necessarily reflect the views of the company.

Asset Reality does not guarantee or warrant the accuracy, completeness, timeliness, suitability or validity of the information in any particular podcast and will not be responsible for any claim attributable to errors, omissions, or other inaccuracies of any part of such material.

Unless stated otherwise, reference to any specific product or entity does not constitute an endorsement or recommendation by Asset Reality.

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Transcription

Speaker: Aidan Larkin

The global asset recovery sector is failing. That is the sad reality of the situation. 

About twenty billion dollars worth of assets are recovered from criminals all around the world, but that's only one percent of the trillions that is out there. 

Hello. I'm Aidan Larkin, and welcome to Seize and Desist, the first podcast dedicated to asset recovery and or seized assets. 

Our podcasts are for informational purposes only. They are not intended to provide legal, tax, financial and or investment advice. Listeners must consult their own advisers before making decisions on the topics discussed. 

It's probably the most important industry that never really gets talked about. It's a sector that has so many astonishing headlines that it continues to prove to us that truth is stranger than fiction. What is asset recovery? Why does it matter to me? You'll be hearing a lot more about this. 

In September 2022 the Financial Action Task Force, FATF as it's known, and Interpol, well, they launched a joint initiative to deprive criminals of their dirty money. It was a real turning point as they described it in the global efforts to recover illicit assets. And when we think about asset recovery, what are we actually talking about? Well, asset recovery affects everything, much more than you probably imagine, from the tax that you pay, funding hospitals, schools, roads, community projects. Everything. And one of the things very important to us and what we want to talk about a lot is not just money coming into society, but victims. And the whole point of asset recovery is getting money back from the people that shouldn't have it. 

So really the sector is everything from the corrupt politicians you hear about, seized super yachts, billion dollar crypto cases. And why is it important? And why do you need to know more about it and understand it better? The truth is the reality of the situation is that it's failing. You hear politicians and governments and anyone in this topic talking about how we should have campaigns to make sure that crime mustn't pay, and crime shouldn't pay, and how to ensure that crime doesn't pay, and all of these different descriptions. 

But the fact is crime does pay, it pays a lot for those involved. Some of the statistics and the reports are astonishing. Countries intercept and recover less than one percent of global illicit financial flows. Like, think about that for a second. Less than one percent is the estimate. And I know some of you out there will be sort of clawing your eyes out here and sort of scratching saying that it's not an accurate figure, it's an estimate. We talk about the one percent, but we don't investigate every crime, we can't get every asset back in every case. But the fact is it's such an enormous sector, and we haven't got a real control of it. We don't really understand all the different data opportunities and data sets. So the fact is all we can do is estimate it. And between the United Nations Office of Drugs and Crime, stats prepared by Europol, globally the estimate on generally accepted figures is less than one percent of global illicit financial flows. 

If we compare that to the estimates of illicit financial flows, what are they? Well they're estimated because these numbers are so large and mind boggling at times. Proceeds of crime is estimated to be around two to five percent of GDP. In real terms, that's two trillion dollars. All of that is up for grabs. That is the pot that we're talking about. When we talk about getting money back into the public purse, when we talk about getting money back to victims, that is the size of the opportunity. Literally over two trillion dollars. But all we're actually recovering is billions. And that's what we want to discuss. That's what we want to dive into. These are the questions we have to ask. Why does it matter to me? How has it got to this stage? What can we do to fix it? We can't tackle any of those issues unless we can actually understand the topic. 

Like, imagine this sector was anything else. 

Park asset recovery for a second. Let's say that in the world of investigating crime our success rate in identifying criminals and locking up offenders, let's say that that was less than one percent. We simply wouldn't stand for it. If all of our tax authorities around the world were only collecting less than one percent of available revenue that affects the tax that we pay, that affects the services we have, that affects the money we have to fund more law enforcement that keeps us all safe, we simply would have a bigger outcry. And I'm keen to understand why is this not talked about so much. Why do we not have this being debated and discussed? When this system isn't working the way it should be, victims are not getting their money back when they are scammed. Fraud affects everybody. We have in the UK, for example, the most widely reported crime type, but the least amount of resources proportionately committed to fighting it? When we don't have effective asset recovery systems, communities aren't being helped. Money isn't being reinvested into rehabilitation, into preventative measures, trying to stop crimes, trying to stop young people being dragged into life of crime. So there's all of these opportunities, and the stakes are so high, we want to talk about it and see how we can change things. 

It seems like there's so much attention on the actual arrests, and the investigations, on the headlines, the politicians proudly standing next to the seized boat. But we don't really ask as a society, what did we actually get back? The asset recovery part, the recovery itself often falls out of the public eye. We celebrate the indictment or the subpoena, or the court order, or however you want to describe it, we celebrate that first bit of activity. We then have the big arrest, all the headlines, assets seized, we've all seen it play out. 

As we record this we're seeing the 1MDB case, one of the biggest, if not the biggest corruption case in the history of asset recovery, where a former prime minister was convicted of his involvement as part of a much wider gang of billions of dollars being stolen from a country. But is there as much attention into what we actually recover in those cases, where all the headlines goes to the big celebrity seizures, the big vessels, the interaction of the expensive designer items, and the mega yachts. The media was more interested in talking about the celebrities that had their birthday parties on these big yachts than how much money did society actually get back in that community when they sold that yacht? 

So that's what we wanna get into. We want to peel back all of the endless headlines about the seizures and the arrests and the charges and actually talk about the recovery. We'll also dive into trying to figure out why has it gone on for so long? Why have there been so many problems about it? When you speak to any asset recovery practitioner, everybody knows about this issue. We wanna explore that. I don't think for one second there's one simple solution. I don't think there's one particular party or government or entity that we could hold to account or blame, that would be a simple, overly reductive way of looking at it. It's not like that. But there's probably a whole selection of feelings, that things that are going wrong, too many things fall into the too difficult box. There is too much confusion and not enough clear guidance or clear conversations. 

So there's a range of reasons. And a lot of that is underpinned by the fact that so many people are afraid of looking foolish. Nobody wants to look like they don't know. If we're all being really honest, most of us don't have the confidence to admit when we don't know the answer to a question or we don't understand the topic. I'm a huge fan of Simon Sinek. He has a wonderful YouTube clip that went viral a few years ago talking about, no, be the idiot or be the stupidest person in the room as he described it. We all have memories from times at school when we didn't understand something, and there was that one kid in class who always put up their hand and asked the question, and we were all probably so relieved that they asked the question. That happens today. That happens today in parliaments, in senates. That happens today when laws are getting passed. That happens today when court cases are being heard, when manuals and policies and procedures are being drawn up. So all of these things together and then you throw in the overly complicated topics like digital assets, crypto, virtual assets, all of this merges together into this asset recovery sector. 

So it's okay to be confused. A lot of it's really complicated. But our mission is to try and make it a little bit simpler and easier to understand. We want to be the person in the room that asks the questions, that asks for explanations when things don't seem clear, bringing in those experts who can walk us through and explain things. How does it all fit together? What is the intersection where crypto fits into all of this? Do we need to start again in the asset recovery process? Now do we have things like digital assets? Or can we look at it in a different way? All around the world government agencies have been seizing a whole range of assets for decades. Anyone that seized a diamond will tell you they didn't have to train to become a gemologist to do it, or anyone that seized a car didn't have to become a mechanic or an engineer. It's about knowing what's relevant to you in your lane and knowing when you have to get help. If you've already seized a car, you can seize the crypto asset. That's the reality of things. 

Also understanding that there's no such thing as a pure crypto crime. We often fall into this rabbit hole in the asset recovery sector, and it's something we wanna explore throughout this series. Did you know, for example, that crypto asset recovery is actually turning the tide on these low performing statistics? This is exactly the right time for us to be digging into this sector and understanding more. Billion dollar seizures are becoming an almost common thing in digital and crypto assets, so we want to explore why does it seem like it's succeeding over here against stories of victims having no chance of getting their money back in crypto fraud cases? And how does all of this come together in the asset recovery sector? How many people know what the right questions are and are willing to ask them? Let us be the idiot in the room for you. Let us ask those questions and try and keep things as simple as possible. I often think that so many people get swept up in looking and sounding clever, that they're afraid to ask those simple questions. That's our job in this show. We want to demystify the complex, we want to separate out the fact from friction, and we'll keep asking why. Why is there a problem with the asset recovery sector? Why does it matter to me? We'll also look at covering off the latest industry developments, the news, the impact, and how this sector needs to evolve to keep up pace with this really fascinating but ever changing space. 

And ask why me, Aidan Larkin, I'm the co founder and CEO of Asset Reality, and I'll be the host of Seize and Desist. 

Why am I so interested in this topic? Well for over sixteen years I've worked in this sector. I've been a criminal tax investigator, I've worked on the investigation side, I've worked in the seized asset side, I've been the person managing the seized assets, I've been the person selling those assets. And also personally, some of you may know that I actually grew up in the Troubles in Northern Ireland and actually personally benefited from proceeds of crime funding through community initiatives, and I've now had the pleasure of working with charities that receive proceeds of crime funding. 

So I like to think that I at least have a bit of a unique perspective in having been on both sides of the fence in terms of investigating these cases and seizing these assets and seeing how the money can be invested into societies. And I've been able to have the fortune of working all around the world with different government agencies, exploring how different jurisdictions have approached it. So whether you're new to the world of seized assets and asset recovery, or you're a seasoned professional who works in this space, we wanna explore and discover the untold stories, meet the heroes and the villains of this exciting and largely overlooked sector. 

Thank you for joining us on this episode of Seize and Desist. If you enjoyed today's discussion, please like and subscribe and share your thoughts on the discussions and the things we've been chatting about or give us your suggestions, we're really keen on hearing those for future episodes. Leave a comment or connect with us on all the usual channels.

And join us next time as we discover the motivations behind FATF's new focus on asset recovery with the former executive secretary David Lewis. I'm Aidan Larkin and you've been listening to Seize and Desist. 

The views expressed by guests are their own and their appearance on the program does not imply an endorsement of them or any entity they represent. Views and opinions expressed by Asset Reality employees are those of the employees and do not necessarily reflect the views of the company. 

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