Did you miss the CRA Annual Conference? We’ll be sharing articles over the coming weeks on each of the panels from the conference, written by ChatGPT.
Dealing with Financial Crimes in Restructuring and Receiverships
CRA Annual Conference 2025 | St. Louis
Panelists: David Castleman (Moderator, Otterbourg), Ted Hartl (Ballard Spahr), Randel Lewis (Foundation Ltd.), Carin Sovrik (Newpoint Advisors), Jolene Wee (JW Infinity Consulting)
Introduction
Financial crime poses a significant challenge in the world of distressed businesses and receiverships. At the CRA Annual Conference 2025, the panel “Dealing with Financial Crimes” brought together legal, financial, and advisory experts to discuss how fraud manifests in insolvency cases, the investigative process, and strategies for recovery.
Understanding Financial Crimes in Distress
Panelists opened the discussion with an overview of the most common schemes encountered in restructuring and receivership work:
-
Embezzlement – misappropriation of funds or assets.
-
Looting – insiders stripping a company of resources.
-
Ponzi schemes – fraudulent investment operations reliant on constant new inflows.
-
Exploitation – taking advantage of vulnerable stakeholders
Dealing with Financial Crimes.p…
.
These activities often come to light only after financial collapse, leaving professionals to untangle the damage while pursuing accountability.
The Investigative Process
Investigating potential financial crimes requires both technical expertise and clarity in communication. Panelists emphasized several key steps:
-
Turnover of records and evidence must be secured early.
-
Findings should be presented in a way that is easily understandable to the court.
-
Receivers and advisors can play a critical role in assisting discovery efforts.
-
When appropriate, cases must be prepared to transition to prosecutors for further action
Dealing with Financial Crimes.p…
.
Disclosure and Recovery Considerations
A recurring challenge in these cases is determining how much to disclose and when. Panelists highlighted the delicate balance between transparency and strategy.
Key considerations include:
-
Distinguishing between incompetence and fraud—not every failing is criminal.
-
The importance of speed to recovery in order to preserve value.
-
Recognizing that in many cases, there may be a crime, but not always a viable solution
Dealing with Financial Crimes.p…
.
Evolving Nature of Fraud
The panel noted that fraud is constantly evolving. As oversight and compliance systems improve, so too do the schemes designed to circumvent them. Professionals must remain vigilant, adaptive, and collaborative—leveraging both financial expertise and legal tools to uncover wrongdoing and pursue remedies
Dealing with Financial Crimes.p…
.
War Stories and Lessons Learned
Perhaps the most engaging portion of the session came as panelists shared war stories from their own experiences dealing with financial crime in receiverships. These real-world accounts highlighted both the creativity of wrongdoers and the persistence required by professionals to bring resolution.
Conclusion
The “Dealing with Financial Crimes” panel underscored that while fraud and financial misconduct can devastate distressed businesses, there are pathways for investigation, accountability, and recovery. By understanding common schemes, streamlining investigative processes, and balancing disclosure with strategy, receivers and advisors can better protect stakeholders and restore trust in the restructuring process.