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International Forensic Accounting: Cross-Border Asset Tracing for U.S. Litigation

By Joey N. Friedman, CPA, ABV, MAcc, MIB — President, Joey Friedman CPA PA. This article is published by Joey Friedman CPA PA, a Florida professional association. All forensic accounting, business valuation, expert witness, and litigation support services described herein are provided by Joey Friedman CPA PA. Mr. Friedman’s professional credentials and experience are exercised in his capacity as an officer, agent, and licensed CPA practicing under and on behalf of Joey Friedman CPA PA.

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International forensic accountant tracing cross-border assets
International Forensic Accounting: Cross-Border Asset Tracing for U.S. Litigation 1

International forensic accounting traces assets, income, and ownership across multiple jurisdictions using bank records, tax filings (FATCA, FBAR, CRS reports), corporate registry data, and treaty-based discovery tools. Common engagements include cross-border divorce (offshore accounts, foreign trusts), shareholder disputes involving international subsidiaries, FCPA investigations, and forensic accounting in international arbitration. A qualified forensic CPA understands the limits of US discovery abroad, coordinates with foreign counsel, and produces evidence admissible in both US and foreign courts.

The U.S. forensic accounting framework assumes domestic records, domestic banks, and U.S. legal process. When the financial matter crosses borders — assets in Canada, accounts in Europe, business holdings in Iceland, transfers to Asian financial centers — the framework changes substantially.

This article addresses international forensic accounting from the perspective of a working Florida forensic CPA with active matters across borders. It covers what’s actually possible, what isn’t, and how attorneys should think about scoping an international engagement.

Why International Forensic Accounting Is Different

Three factors make international forensic accounting fundamentally different from domestic work:

Jurisdiction. U.S. subpoenas don’t reach foreign banks. To compel production of records in another country, U.S. counsel must use mechanisms recognized in that country — typically Mutual Legal Assistance Treaty (MLAT) requests, Hague Convention letters rogatory, or direct subpoena to a U.S. branch of a foreign bank.

Different reporting frameworks. U.S. accounting standards (GAAP) and tax reporting (Form 1040, FBAR, Form 8938) provide a baseline of disclosure. Other countries use different standards (IFRS in most jurisdictions, country-specific in others) and have different disclosure regimes.

Different banking secrecy. Some jurisdictions (historically Switzerland, Cayman Islands, Liechtenstein) have or had strong banking secrecy laws. Some have softened in recent decades under international pressure (OECD Common Reporting Standard, FATCA agreements with the U.S.). Some remain strict.

The Cross-Border Discovery Toolkit

For U.S. litigation involving suspected international assets, several discovery tools apply:

1. Direct Subpoena to U.S. Branches

Many international banks have U.S. branches subject to U.S. legal process. A subpoena to the U.S. branch of HSBC, Barclays, Deutsche Bank, etc. can compel production of records held in the bank’s global system (subject to challenges based on customer location).

2. FATCA Reporting

The Foreign Account Tax Compliance Act (FATCA) requires foreign financial institutions to report U.S. account holders to the IRS. The reports themselves typically aren’t directly discoverable by litigation parties, but the existence of FATCA reporting can be inferred from tax return disclosures.

3. FBAR Filings

The Report of Foreign Bank and Financial Accounts (FBAR) requires U.S. persons with foreign accounts exceeding $10,000 in aggregate to file annually with FinCEN. FBAR filings are obtainable through legal process and provide a record of declared foreign accounts.

4. Form 8938 Disclosures

The IRS Form 8938 (Statement of Specified Foreign Financial Assets) requires disclosure of foreign assets above certain thresholds on the tax return itself. These disclosures are visible to anyone receiving the tax return through discovery.

5. Mutual Legal Assistance Treaties (MLATs)

The U.S. has MLATs with many countries that establish procedures for one country’s law enforcement to obtain records from the other. MLATs are typically used in criminal matters but can sometimes support civil matters through coordination with U.S. enforcement.

6. Letters Rogatory (Hague Convention)

For civil matters, U.S. courts can issue letters rogatory under the Hague Convention on the Taking of Evidence Abroad. The letter requests the foreign court to take evidence (typically depositions or document production) under the foreign country’s procedures. The process is slow (often 6-12 months) but is the standard mechanism for civil cross-border discovery.

7. Local Counsel Engagement

For specific countries, engaging local counsel (a lawyer licensed in that country) to request records under that country’s procedures is sometimes the most efficient path. The local lawyer files the appropriate request with local authorities or financial institutions.

Country-Specific Considerations

Canada

The U.S. and Canada have substantial financial integration. Many Canadian banks have U.S. branches subject to U.S. legal process. The two countries have an MLAT. Canadian courts will typically honor U.S. letters rogatory.

For Florida residents with Canadian assets, the typical pathway is:

  • Subpoena to U.S. branches of Canadian banks (RBC, TD, BMO, Scotiabank — all have U.S. presence)
  • Direct request to Canadian banks via local Canadian counsel
  • Letter rogatory if formal court-to-court process is required

Canada also has its own version of FBAR-like reporting under the Income Tax Act (foreign property reporting on Form T1135).

European Union

EU financial institutions are subject to substantial transparency requirements under EU directives. Most major European banks (BNP Paribas, Deutsche Bank, ING, etc.) have U.S. presence.

The EU has strong data privacy laws (GDPR) that can complicate U.S. discovery requests. Coordination with EU-licensed counsel is typically required.

Specific consideration:

  • Switzerland: Banking secrecy was substantially weakened by the 2009 UBS settlement and subsequent FATCA agreements. Records are now obtainable through proper legal process but require Swiss counsel coordination.
  • Liechtenstein: Strong secrecy historically; modern obligations under EU pressure are evolving.
  • Luxembourg: EU member subject to EU transparency framework, though local privacy laws can complicate discovery.

Iceland

Iceland has cooperated extensively with U.S. authorities on financial matters since the 2008 banking crisis. The country is now considered cooperative for financial discovery, though specific records require local counsel engagement.

Caribbean Financial Centers (Cayman Islands, BVI, Bahamas, Bermuda)

These jurisdictions have historically been used for asset concealment due to bank secrecy and tax benefits. Recent decades have seen increased cooperation with U.S. authorities, particularly under FATCA. Records are obtainable through proper legal process but the process is slower and more expensive than domestic discovery.

Asia (Hong Kong, Singapore)

Both Hong Kong and Singapore have substantial financial sectors with international integration. Discovery is possible through proper legal channels (MLAT for criminal matters, letters rogatory for civil matters, direct subpoena to U.S. branches of Hong Kong/Singapore banks).

Cryptocurrency Across Borders

Cryptocurrency adds complexity to international tracing. The blockchain is a public ledger, but identifying which wallets belong to specific persons in foreign jurisdictions requires:

  • Exchange records (subpoenas to crypto exchanges with U.S. presence)
  • Bank records showing transfers to/from exchanges
  • In some cases, requests to foreign cryptocurrency businesses

When to Use International Forensic Accounting

International forensic accounting engagement makes sense when:

  • A party to the U.S. litigation has clear international ties
  • Tax returns suggest foreign income or assets
  • Lifestyle inconsistent with reported income suggests offshore concealment
  • Business records show international transfers
  • The U.S. party has substantial international travel patterns
  • The U.S. party has connections (family, business, citizenship) to specific foreign jurisdictions

If none of these factors are present, domestic forensic accounting is typically sufficient.

Cost and Timeline Realities

International forensic engagements are more expensive and slower than domestic engagements:

Cost factors:

  • Local counsel fees in the foreign jurisdiction
  • Translation costs (foreign-language records)
  • Legal process fees (MLAT, letters rogatory)
  • Travel where physical document analysis or witness interviews are required
  • Currency conversion adjustments
  • Extended timeline = extended accountant time

Timeline factors:

  • MLAT requests: 6-18 months
  • Letters rogatory: 6-12 months
  • Foreign bank subpoena responses: 3-12 months
  • Translation: 2-6 weeks per substantial document

A complex international forensic engagement can run $100,000-$500,000+ and 12-30 months.

What Mr. Friedman Brings to International Forensic Engagements

For transparency: Joey N. Friedman, CPA, ABV, MAcc, MIB, in his capacity as President of Joey Friedman CPA PA, has active forensic matters in Canada and Iceland and experience with European, Caribbean, and Asian financial center tracing. The Master in International Business (University of Florida) provided foundational training in international financial frameworks; subsequent practice experience built operational understanding of how to scope and execute international engagements.

The firm coordinates with local counsel in the relevant jurisdictions for legal process and document production. The forensic accounting analysis is performed by the firm; the legal mechanisms for obtaining records are handled by local counsel.

Frequently Asked Questions

Can you find money hidden in Switzerland or Cayman Islands?

Sometimes yes, sometimes no. The answer depends on:

  • Whether the U.S. person has properly reported the accounts (FBAR, 8938)
  • Whether transfers to/from the offshore accounts are visible in U.S. bank records
  • Whether U.S. legal process can compel the foreign bank’s cooperation
  • The strength of bank secrecy in the specific jurisdiction

In modern practice, most major financial centers cooperate with proper legal process — but the process takes time and money.

How does FATCA affect international forensic accounting?

FATCA requires foreign financial institutions to report U.S. account holders to the IRS. This means accounts that U.S. persons hold abroad are increasingly visible. The reports themselves may not be directly discoverable, but the existence of FATCA reporting suggests accounts that should appear on tax returns.

Can a forensic accountant work in a foreign country?

Forensic accounting analysis can be performed from anywhere; what requires local jurisdiction is the legal process to obtain records and the licensure to provide testimony in local proceedings. For U.S. litigation, a U.S.-licensed forensic accountant works with local counsel in the relevant foreign jurisdiction.

Are there countries where international forensic tracing is essentially impossible?

A small number of jurisdictions still maintain strong bank secrecy and limited cooperation with U.S. discovery. These tend to be specific Caribbean and African financial centers, plus certain Asian jurisdictions. Even in these cases, indirect evidence (lifestyle inconsistencies, bank records showing transfers to the jurisdiction) often establishes the existence and approximate magnitude of holdings even when the specific records aren’t obtainable.

How does international currency conversion affect the analysis?

Multi-currency analysis requires:

  • Identifying the original currency of each transaction
  • Establishing the conversion rate at the relevant date
  • Maintaining the analysis in a single base currency (typically USD for U.S. litigation)

A forensic accountant experienced with international matters handles currency conversion as part of the standard methodology.

Does Joey Friedman CPA PA handle these engagements?

Yes. The firm has active forensic engagements in Canada and Iceland and substantial experience with European, Caribbean, and Asian financial tracing in the context of U.S. litigation. International engagements are typically scoped jointly with the engaging attorney and local counsel in the foreign jurisdiction.

Working with a Forensic CPA on International Matters

If you are an attorney handling a U.S. matter that involves suspected international assets, transfers, or income — divorce, fraud investigation, partnership dispute, estate litigation — engaging a forensic CPA with international experience early is critical. The legal processes are slow; planning the engagement at the start avoids reactive scrambling near deadlines.

Joey Friedman CPA PA, through its President Joey N. Friedman, CPA, ABV, MAcc, MIB, provides international forensic accounting services to U.S. attorneys, with active matters in Canada and Iceland and capability across European, Caribbean, and Asian financial centers. Contact the firm to discuss your specific situation.

About Joey Friedman CPA PA

Joey Friedman CPA PA is a Florida professional association providing forensic accounting, business valuation, expert witness, and litigation support services. The firm is led by Joey N. Friedman, CPA, ABV, MAcc, MIB, who serves as the firm’s President.

All services described in this article are provided by Joey Friedman CPA PA. Engagement letters and professional services are issued by the firm. Joey N. Friedman signs in his capacity as the firm’s President — as an officer and agent acting on behalf of Joey Friedman CPA PA, not in any personal or individual capacity. Mr. Friedman’s professional credentials — including CPA license, ABV (Accredited in Business Valuation, AICPA), and ACFE membership — are exercised under the firm.

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Disclaimer: This article is for informational purposes only and does not constitute legal, accounting, or tax advice. Engagement of Joey Friedman CPA PA is subject to a written engagement letter executed between Joey Friedman CPA PA and the engaging party. No attorney-client or accountant-client relationship is created by reading this article.

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