Kate is a specialist private prosecutor having prosecuted some of the UK’s largest and most complex fraud, money laundering and corruption cases. She is instructed on overseas corruption matters, retained by States. In 2017, The Lawyer recognised Kate as one of the “Hot 100” lawyers in the UK, an award which acknowledges the “best lawyers in the UK” and “the most daring, innovative and creative”. Kate is the chair of the IBA’s Asset Recovery Committee.
What do clients look for when selecting an asset recovery specialist?
Ideally, they seek a lawyer who can deliver a cost effective, timely and favourable result, including obtaining justice and recovering money.
There is a world of difference between obtaining a judgement and obtaining the return of funds to the victim (in the criminal or civil arena). I think it’s incredibly important to utilise all tools at your disposal and to be open to other ways to obtain evidence – social media, public records, witnesses, investigative powers, lawyers and investigators in other jurisdictions, IT specialists and so on. Asset recovery is an incredibly creative and collaborative process.
To what extent is remote working as a result of covid-19 highlighting the importance of face-to-face interaction in private prosecutions, and to what extent will virtual preparation and proceedings become the ‘new normal’?
Personally, I have put off interviewing tricky witnesses (who may have important evidence about assets). Zoom does not allow me to “read the witness” in quite the same way.
In relation to court hearings, I think these are better (and more cost effective) during covid-19. It’s much more efficient to do schedule hearings and legal arguments virtually.
I cannot imagine criminal trials ever occurring virtually. Juries need to see other humans to “read them”. The words people choose to speak is such a small amount of the data we interpret when assessing truth.
Are you seeing new types of fraud emerge and develop during the covid-19 pandemic? If so, what?
We have seen significant increases in cybercrime on the vulnerable in financial and pension scams. People are at home more, they are on the internet more and they are bored and often lonely. We have also seen a spike in romance fraud – that’s certainly increased in lockdown!
How have Edmonds Marshall McMahon adapted in response to the challenges posited by covid-19?
We often work out of the office at client locations (often overseas) so are quite adept at working in different locations cohesively. We have home working days every week. Being effective or contactable hasn’t been a challenge.
Overall, I think lawyers are very lucky to have work which can be done anywhere which is tracked via billable targets. Easy to do and easy to track. That has never been more useful than during covid-19.
Is it your experience that frauds tend to emerge from insolvencies? What is your experience of this, how does it pan out in practice, and what is driving this trend?
I don’t necessarily think that frauds emerge from insolvencies but rather often create them. A fraud is a deliberate misrepresentation of the position as one knows it to exist - this can be to staff, shareholders, board members, auditors, suppliers, lending facilities and even to those at the very top of the company. I tend to see the worst of insolvencies, but I have rarely seen one where there has been a timeous and fair representation of the underlying financial position by those with the means to assess and communicate it.
What are the main issues associated with the need for cross-border cooperation with regulatory authorities?
Put simply, speed and efficacy. There is a lot of red tape in sovereign to sovereign requests. Communication is often so slow as to incapacitate lines of investigation. Sometimes such requests are simply ineffective – requests are made, and delivery of evidence is not. Enforcement of UK criminal court orders in other jurisdictions can be incredibly slow via mutual legal assistance.
What different or additional investigative methods are required for recovering funds which end up in cryptocurrency?
Cryptocurrencies are really difficult (but not impossible) to track. They require two extremely fast, parallel track investigations in order to avoid dissipation. A lawyer must build a complex picture of the individuals (so that when you find the money, you can also find the individual to provide the key to the bitcoin wallet for example). “Following the money” is no longer enough.
Contact details are easy to locate for banks and speaking to a human to freeze funds is easy. That is not the case for cryptocurrency organisations nor cryptocurrency exchanges. These funds are built to be anonymous and exchanges seek to allow trade to occur in such a way; it can be very stressful and frustrating to try and trace such funds at the speed required.
What skills and traits would you advise the next generation of asset recovery lawyers to nurture?
Creativity, an enquiring mind, honesty, dedication to your clients and hard work. Working in a creative and fast-paced field like asset recovery is not for procedural lawyers who like everything to be neat and tidy. It’s stressful, exhilarating, frustrating, long hours, creative and a great deal of fun. Honesty is really important too. Lawyers that do not critically analyse their clients’ answers or instructions are not doing their job. However, lawyers that never believe clients are equally unsuited to the wacky world of asset recovery!
Kate is a specialist private prosecutor. She has significant experience prosecuting (both publicly and privately) some of the UK’s largest and most complex frauds – particularly in complex, cross-jurisdictional fraud, and bribery and corruption matters. Kate is a founding partner of the UK’s only private prosecution firm. In 2017, The Lawyer recognised Kate as one of the “Hot 100” lawyers in the UK. This award acknowledges the “best lawyers in the UK – the most daring, innovative and creative”. The Legal 500 (2016) describes Kate as “a fearless and energetic prosecutor” who has “a relentless commitment to justice”.
What inspired you to pursue a legal career?
Like many lawyers, I have always been interested in justice and fairness. Injustice always has a profound effect on me – and I consider it to be useful to put anger to effect. I have also always had a need to “get to the bottom” of matters and to really see things as they are, which is something that my job as an investigative lawyer allows me to do – particularly in asset tracing, fraud and corruption investigation. Quite often, a good fraudster presents a compelling account of facts: a good lawyer needs to know how to “undo” that account.
What do your clients look for in an effective private prosecutor?
Ideally, it would be a cost-effective, timely and favourable process, including obtaining justice and recovering money. I think clients look for prosecutors who are really “on board”, someone who really understands how their business or industry works and believes in them. Defendants in our cases are often very dishonest but with a high degree of plausibility: clients are often very fed up with these fraudsters being viewed favourably and persuading others effectively, and, thus, able to repeatedly perpetrate fraud and dishonesty without being called to account. Too often, clients will have given the fraudster the benefit of the doubt many times and are incredibly frustrated when those fraudsters go on to get the benefit of the doubt from the court too – until conviction.
You have a distinguished track record as a prosecutor. How do you prepare effectively for the complex, high-profile cases that you work on?
Those that work with me might describe me as intense, controlling and obsessive about my cases – and they’d probably be correct! However, I am reasonably calm during the trial as itself. I prefer to be over-prepared for trial because whatever you’ve done will not be enough – no matter how well prepared you are, there will be unforeseen curveballs.
To counteract that, I prepare by obsessing over what defences a defendant might put forward, and try to gather as much evidence as possible to make sure we are prepared to deflect those – often to a level that others may consider unnecessary. I try to make sure witnesses are calm, familiar with their statements, and well informed. I make sure that I test our arguments and presentation on people around me who might be in the jury – friends or neighbours, or other mothers or fathers I might meet. What is obvious to a jury is different to what is obvious to highly intellectual counsel or lawyers. I firmly believe in challenging counsel, and encourage and empower my teams to do so; I think the best work product comes from constant critique and analytical team work. It’s not relaxing, but usually this sort of preparation is effective in the months of trial.
What is the most interesting case you have been a part of to date?
Currently, I am assisting a foreign investigative group with a number of corruption investigations. I am working with a highly experienced and dedicated team from our firm who have made real inroads in understanding not only the complex case issues, but also the difficulties and differences of investigation in other jurisdictions. It has been fascinating to watch the melding of two different groups into a more effective team. The cultural, economic, social and legal differences have made it utterly fascinating.
What challenges did you face when setting up your own firm?
I think the largest challenge was having no client base: we were a completely new firm, and we largely created a completely new area of specialism in the law. Tamlyn and I started at the firm directly from the civil service, and Andrew followed some years later from the Bar as a prosecutor. None of us had pre-existing clients to bring with us.
We also chose a market that didn’t exist: we spent a lot of those first years “educating” the market about private prosecutions and how they could be used to effect – especially alongside civil proceedings, which, to this day, lawyers have concerns about. However, most of the lawyers who really have their clients’ best interests at heart can now see that this is an effective route for justice and asset recovery, and recommend it.
How are you handling all steps of the investigations and asset recovery process in the covid-19 lockdown environment?
I think it’s been difficult. It’s tricky to get governments to process requests. Urgent hearings have been put off. Interviewing witnesses via Zoom, especially witnesses who may be reluctant to talk to you, is a handicap. I think it is a good time for fraudsters and a concerning time for victims.
What new types of fraud are you seeing emerge and develop during the covid-19 pandemic? How are you ensuring that you and your clients are well equipped to tackle them?
We have one of the largest and most experienced anti-corruption investigation teams in the UK, and we are preparing for a flood of corruption investigations and prosecutions. The unprecedented spread of the effects of covid-19 has seen an enormous global response to help fight the virus, improve health and safety, and respond to the economic impact of a worldwide lockdown. It is the scale of such events and the immediacy of response required that expose the increasing vulnerability of governments, non-profits and corporations to corruption and bribery. When money is passed out quickly and in vast quantities, with expedited checks and balances to match the hurried need for funds, control tends to be lax. Globally, the UN estimates that according to several studies, 10 to 25 per cent of all public contracts are lost due to corruption, and this is without the hallmarks of the crisis we currently face
Where, in your opinion, does the future of the practice area lie?
Complex fraud and corruption is simply not being prosecuted at the volume in which it is committed. Policing and state prosecuting is limited by staffing and budgetary constraints – many of the 43 policing areas in the UK do not have a dedicated fraud officer or have a skeleton fraud staff. Fraud across England and Wales accounts for one in three crimes, but only 2 per cent reach court, and despite nearly 2,000 fraud offences being committed daily in England and Wales, just one in 50 is prosecuted. In 2019, fraud reporting jumped by 15 per cent against otherwise static offending figures. These cases are notoriously difficult, expensive and time-consuming to investigate and prosecute. With ever increasing numbers of fraud and no one to investigate and prosecute it, private prosecutions will inevitably grow.
Kate McMahon is a founding partner of Edmonds Marshall McMahon, the UK’s preeminent private prosecution firm. She is an internationally regarded, dual-qualified prosecutor specialising in complex and serious fraud, money laundering, corruption, regulatory crime and asset recovery. Kate has extensive experience in global investigations and is considered to be a leading strategist.
After qualifying in Australia in 2004, Kate held impressive positions in the Government Legal Service (UK) and the Serious Fraud Office where she worked as a senior lawyer on some of the UK’s largest criminal cross-jurisdictional prosecutions and the UK’s first global plea agreement.
Kate has been described as “highly commercial”, “a formidable adversary” and “highly respected” by The Legal 500 and has been a recommended individual in the area of white-collar crime since 2013. She has been recognised in the Women in Law Awards (The Lawyer). Kate often appears on television and regularly speaks at international conferences on corruption, private prosecutions and asset recovery.
She is currently one of the selected solicitors to act with the government in a new City of London police initiative to tackle fraud. In 2017, Kate was named in The Lawyer’s "Hot 100" list of the 100 most influential lawyers in the UK. Kate advises governments internationally.