Monday, January 01, 2007Making the Move

Martin KenneyAn onshore leader relocates offshore

The idea of opening an office of Martin Kenney & Co., Solicitors, in the British Virgin Islands was first raised by Mr. Glenn Harrigan of CCP Financial Consultants Limited, a local firm of accountants and insolvency professionals, in 2004, and shortly after the BVI announced it would be putting in place new insolvency legislation. This legislation required that insolvency practitioners wishing to be recognized under the Act be resident of the BVI, and we, along with others who were observing the industry, felt that the law would cause several of the Big Four accounting firms to return to the BVI. It was also a place that we thought we should be, in part because much of our work has brought us to the Eastern Caribbean over the years.

The results of an initial scouting trip were positive. The business environment was welcoming, and the islands were captivating. Our Managing Director for Forensics, John Bagalini, who led the scouting team, was so impressed that when he returned, his proposal was not just for us to open a branch office in the BVI—he wanted to move the whole operation to Tortola instead.

After more of us visited the BVI, this became an easy decision. Ours is not a business that depends on local clients; our clients are international, and so is our work. We trace multi-million-dollar frauds through a large number of jurisdictions. In many respects, our location does not matter. But in others, of course, it does. Some of our staff were not especially enamoured with the weather in Ireland—we were located there due to the tax benefits and Ireland’s proximity to some of the jurisdictions relevant to our work. So a move to beautiful Tortola held great appeal for many of us because of the lifestyle we could lead in the islands. Add to that the business advantages of being located in the middle of a thriving financial services jurisdiction, the presence of upwards of 700,000 offshore companies (some of which are relevant to our work), and it was not difficult to make the decision to move.

We moved in 2005, and opened our Tortola office in August in temporary offices. In March 2006, we moved into our own offices in Flemming House in Road Town. Moving went quite smoothly, and setting up our business and offices were easier here than they had been when we moved to Ireland from New York in 1997. We worked with a range of excellent vendors—from the contractor to the information technology firm—who ensured that we were open and operational in a matter of days. The business infrastructure here is quite near to what you would have in a major U.S. or European city, and I am hopeful that in the coming years with the liberalization of the telecommunications market, the infrastructure will become even better for business.

I believe that one of the reasons why our move to the BVI went as smoothly as it did – and why we were able to obtain the necessary licenses with minimal trouble – was because, arguably, we are not in direct competition with any company, law firm, or other business that is already present in the BVI. Although we are, strictly speaking, a law firm, we do not take on local clients and our business is highly specialized in fraud detection and recovery.

Martin Kenney & Co., Solicitors, concentrates on representing persons who have been harmed by economic crime in a multi-jurisdictional setting. We use a combination of traditional and extraordinary measures to gather evidence of serious wrongdoing, and to recover substantial value in many places concurrently. We also represent clients in building investigative models to solve a diverse set of extreme-fact problems caused by dishonest conduct. We employ a multi-disciplinary team of professionals, including lawyers, investigators, forensic analysts, and accountants. Traditionally, victims of fraud would have had to employ two, three, or even more specialists to look into their case: comparative pre-emptive remedy lawyers, forensic accountants, and investigators at the least. But our three-in-one model allows us to provide all the services required to obtain meaningful remedies for the victims of fraud or bad dealing, optimally.

Our clients range from national governments (in grand corruption matters); to banks; to bankruptcy trustees; to large groups of individuals – and even to aggrieved spouses in matrimonial property disputes. The frauds that we investigate are of a minimum of seven-digits in value and more—in short, the stakes in these cases are high. And because of the multi-jurisdictional nature of the wrongs, and the tremendous amount of time and resources required to investigate them, victims are often unsuccessful in enlisting the help of their local law enforcement agencies.

One of our greatest strengths is exclusive membership of Fraudnet, a specialist network of leading fraud and business crime lawyers of the Commercial Crime Services Division of the International Chamber of Commerce in London. As the exclusive member of Fraudnet for the BVI, we have access to the services of our fellow Fraudnet members around the world. This means we can act quickly and professionally in multiple jurisdictions for the benefit of our clients. In the Caribbean region, only the Cayman Islands and Bermuda also have Fraudnet representation.

Our practice is highly disciplined. In every case we carefully examine the apparent facts and develop a strategic and tactical model to guide our approach. The strategic model is a roadmap that sets out how we will achieve our overarching goal: to bring meaningful remedies to the victim of the fraud by discovering, preserving and recovering concealed value from primary and tertiary targets. The tactical plan is efficient and cost effective, as well as focused, implement able, and measurable. At all times we base our plans on the specifics of the case involved, and tailor all of our plans to the facts of the case and the apparent modus operandi of the fraudster. Detailed cost plans and budgets are developed, and a plan to manage the risk of the process of recovery follows from this.

The methods of investigation that we employ vary greatly according to the jurisdictions, types of frauds, and individuals involved. We typically employ several techniques, such as ex parte civil disclosure orders, that allow us to obtain information without the knowledge of the apparent fraudster. Since Sept. 11, 2001, the policies of the United States government (and, separately, of the Financial Action Task Force of the G-8) have been the impetus for cutting off many avenues for alleged fraudsters and terrorists to launder money around the world. And while it is still too easy for someone to conduct a multi-million dollar fraud, it is also getting to be less difficult to track that fraud, prove it, and recover the assets involved.

By being in the BVI, we have also been able to better serve some of our Caribbean regional matters. In one such case, where we act for 125 US investors in an apparent US$19 million Christian affinity Ponzi scheme and real estate investment fraud based in St. Kitts, we have been able to appear in approximately ten hearings in the past year in the High Court of St. Kitts – being only one hour away from Tortola. We have a similar case on the go in Dominica for over 600 US investors; where the value lost by fraud exceeds US$45 million; and where the work involves actions and investigations in Jamaica, the Bahamas, the US, Canada, Singapore, Antigua, the BVI and elsewhere.

Our presence in the British Virgin Islands does not signify that the BVI has an unmanageable problem with fraud or money laundering—certainly not more so than major jurisdictions such as the United States, the UK, or Canada. Instead, our presence here signifies the strength of the BVI’s financial services sector and the growing role it is playing in the international business world. It also represents the BVI authorities’ commitment to maintaining a good reputation for responsible business. In short, we would argue that our presence means that it is now harder than ever to get away with fraud in the BVI.

Since we relocated to the BVI in August 2005, the size of our business has doubled. We have hired on additional staff, and we expect to hire more in the coming months and years, including BVIslanders.

Our decision to move to the BVI has proven to be a positive step. While local clients do not drive our business, our presence in the BVI allows us to be a part of one of the most dynamic and exciting international business centres in the Caribbean. Our employees are happier, and we are pleased to be a part of the BVI community. It has been—in short—a good move for us all.

Oyster Publications Inc, PO box 3369, Road Town Tortola, British Virgin Islands, VG1110