It’s well documented that legal entities are commonly abused to facilitate financial crime.
As far back as 2006, the Financial Action Task Force stated that “Shell corporations and nominees are widely used mechanisms to launder the proceeds from crime, particularly bribery”.
That’s why countless transnational investigations into financial crime have started or been enhanced by mining the kind of legal entity data that OpenCorporates provides.
Rob Wilson, a forensic accountant and financial crime investigator, has worked on many such investigations into illicit activity – including many high-profile ones that have hit the headlines.
We sat down with him to learn why – and how – he uses OpenCorporates’ data as the starting point to investigate bribery, corruption and money laundering.
What role does legal entity data play in anti-financial crime investigations?
“Legal entity data is the starting point of an investigation.
It’s where I go to find out what publicly available baseline information is out there about a company – from its financial records to its directors.
This has been true across any of the contexts I’ve worked in: from law enforcement at the Serious Fraud Office to in-house investigations at the likes of GSK, to more recently when I worked at a UK government agency investigating fraudulent claims amongst the covid business support programmes.
Most investigations are about gap analysis – you need to try to compare what you know against what you don’t know and fill in the gaps. With legal entity data, you can fill some of those gaps by looking at what people claim to be truth per official public records and then unpicking this data to see if it matches with reality”.
What is the value of OpenCorporates’ data in particular?
“OpenCorporates is a really good investigative resource. If I thought there was a better one, I would say! The data is helpful because it is:
- Openly available
All of the data is openly available for anyone to access on their website. Whilst those with more resources may want to use APIs or Bulk Data to conduct more sophisticated analytics, this openly available resource is incredibly useful in its own right.
- Global
As so much company data (from 140 jurisdictions, I am told!) is standardised and brought together in one place, you can identify linkages between legal entities across the world. For example: you can find common directors or addresses, which helps to build a bigger picture when you are tracing assets or investigating links to organised crime.
As a forensic accountant trying to trace money, I may have transaction data from companies, but it really helps the investigation when OpenCorporates can show that two companies are related in a way that often isn’t apparent. - Standardised
An accountant like myself wants reliable information in a standardised format and OpenCorporates brings together inconsistent data on legal entities from many countries into a single schema I can work with easily”.
What sorts of activities or investigations have you used OpenCorporates to support?
“I mostly use OpenCorporates’ data on international cases or where there are a lot of companies involved, for example, global money-laundering cases or bribery investigations. In a bribery investigation, I would use OpenCorporates to try to identify who is who and who is transacting with whom.
For example, an investigation I worked on found that a company in the Netherlands was illicitly moving money between linked entities around the world by pretending that these were sales transactions. We could not see a connection between these companies from the information we had, but OpenCorporates’ data provided the context to show us that these companies were, in fact, linked”.
What impact would it have on professionals like you if OpenCorporates did not exist?
“It would slow down my investigations immeasurably.
I do not know any other place I can go to that provides information in such a standardised and easy-to-access way.
There are company registries I just would not be able to access without going through a lengthy process of accessing, understanding and utilising their data. OpenCorporates has already been to all of these registries, sorted the data out and made it easily available in a useful format.
Global investigations would also be stymied without OpenCorporates and it would set back law enforcement activity on global criminality. While some company registries are excellent, like the UK’s Companies House, you cannot rely on one dataset in isolation. You need the global interconnected picture that OpenCorporates provides”.
How has the value and role of legal entity data changed in today’s environment? Has Covid-19 altered the landscape?
“Overall I am not sure that it has changed – fraud has been the same for hundreds of years. But the current circumstances have created new opportunities for fraudsters to get away with criminality as people are focusing on other things.
The automated formation of companies is a significant change though. People can create companies so quickly now. In one investigation I ran, companies were being formed and bank accounts were opened automatically so money could be moved between them at speed on a vast scale.
Technology enables fraud to happen more quickly. As a result, we need to be able to access the data more quickly and efficiently”.
What advice do you have for others looking to use legal entity data for investigations?
“The key thing is to determine what you know, what you want to know and how that will help you. If you have time, it’s fun to explore a dataset, following links and seeing where you end up, and sometimes you find little nuggets that can help. But if you are working to a deadline, you need to focus. You should start with the question or hypothesis you are trying to prove – what is the plan – and focus on finding the answer”.
About Rob Wilson
Rob is a Chartered Accountant who moved into fraud investigations and forensic accounting more than 20 years ago. Since then, most of his work has been focused on fraud, bribery and anti-money laundering investigations.
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