Cross-Border Fraud: The Legal Remedies That Actually Recover the Money

The first question is not legal. It is how many hours have passed.

When a company discovers it has been defrauded across a border, the instinct is to reach for a lawyer. That instinct is correct eventually, and almost always too slow to matter for the money itself. The funds move through the banking system on a clock that has nothing to do with litigation timetables, and the single largest determinant of whether anything is recovered is how quickly the payment is flagged to the institutions that still hold it.

The FBI's Internet Crime Complaint Center runs a mechanism built entirely around this reality. Its Recovery Asset Team, established in 2018, operates what it calls the Financial Fraud Kill Chain: on a fast-enough report, it coordinates with receiving banks to freeze fraudulently induced transfers before the funds are moved on. In 2024 the team attempted recovery on 3,020 complaints representing $848.4 million and froze $561.6 million — a 66% success rate on the cases it was able to act on.

That success rate is the encouraging number. The sobering one sits beside it: total losses reported to the IC3 in 2024 were $16.6 billion. The overwhelming majority of defrauded money is never frozen at all, and the difference is very often that nobody reported it fast enough for the mechanism to work.

So the first hour matters more than the first month. Notify the originating bank and ask it to initiate a recall; file with IC3; and preserve every instruction, header, and account detail exactly as received. This is the same evidentiary discipline described in how a cross-border fraud investigation works — and it is the foundation everything below depends on.

Why the border itself is the problem

A domestic fraud and a cross-border fraud are not the same problem with a longer flight. Domestically, one legal system governs the wrongdoer, the bank, the court, and the enforcement officer. Across borders, those four can sit in four jurisdictions, each with its own rules about what can be frozen, what can be disclosed, and whose orders it will honour.

This is visible in the design of the recovery mechanisms themselves. The kill chain began as a domestic instrument — a way to reach receiving banks inside the United States — and only extended to domestic-to-international transactions in April 2024, through an international variant coordinated with foreign partners. The reason is structural: a U.S. agency can ask a U.S. bank to hold funds; asking a bank in another jurisdiction to do the same requires a relationship, a legal basis, or both.

The practical consequence is that every hop the money takes across a frontier lengthens the recovery timeline and narrows the available remedies. Funds that pass through two or three jurisdictions before landing are not merely harder to find; they may be sitting somewhere that will not recognise the order you eventually obtain.

Freezing the assets: the remedy most people assume exists

The instrument everyone has heard of is the worldwide freezing order — the English Mareva injunction, which restrains a defendant from dissipating assets while a claim is decided. It is a genuinely powerful tool, and it is one of the reasons London and other common-law jurisdictions attract cross-border fraud claims.

It is also substantially narrower in United States federal court than most claimants expect. In Grupo Mexicano de Desarrollo, S.A. v. Alliance Bond Fund, Inc. (1999), the Supreme Court held that a federal district court has no authority to issue a preliminary injunction freezing a defendant's assets pending adjudication of a claim for money damages, because that remedy was historically unavailable in equity. The plaintiffs there alleged the defendant was insolvent and preferring other creditors; the injunction was still improper.

The distinction that survives Grupo Mexicano matters enormously in practice. Where the claim is equitable — where the claimant asserts an interest in specific property, such as funds traceable to the fraud itself — asset-preservation relief remains available. Where the claim is simply for money owed, it generally is not. This is one of the strongest reasons to invest early in tracing: establishing that particular funds in a particular account are the proceeds of the fraud can be the difference between a remedy and none.

State courts and other jurisdictions offer their own attachment and injunctive procedures, and the analysis differs again where a receivership or an insolvency process is available. The general point holds: in a cross-border case, where you can freeze is often a more important question than whether you are right.

Getting the evidence: Section 1782 and its recent limits

One of the most useful and least understood tools in cross-border fraud sits in the United States Code. Section 1782 of Title 28 allows a party to foreign proceedings to apply to a U.S. district court for discovery — documents and testimony — located in the United States, for use abroad. Because American discovery is broad by international standards, it can produce material a foreign court could never have compelled itself.

In a fraud case this is frequently decisive. Correspondent banking means that a dollar-denominated payment between two non-U.S. parties often leaves records with a U.S. institution, and Section 1782 is the route to those records. It is a common way of establishing where money actually went when the defendant's own disclosure is unreliable.

The statute's reach narrowed in 2022. In ZF Automotive US, Inc. v. Luxshare, Ltd., a unanimous Supreme Court held that Section 1782 reaches only governmental or intergovernmental adjudicative bodies — resolving a circuit split and closing the statute to private international commercial arbitration. The Court also declined to extend it to an investor-state panel that, although constituted under a treaty, was not itself created by governments or exercising sovereign authority.

The planning consequence is concrete: if a dispute is headed to private arbitration rather than a foreign court, this avenue is likely closed, and the evidence strategy has to be built differently from the outset. That is a decision to take before the forum is chosen, not after.

The criminal route, and its honest limits

Where the conduct is criminal, a parallel machinery exists. Mutual Legal Assistance Treaties allow prosecutors in one country to request evidence, and in some cases asset freezing and forfeiture, from another; in the United States these run through the Department of Justice's Office of International Affairs. For corruption-related losses, Chapter V of the United Nations Convention against Corruption establishes asset recovery as a treaty principle, and the World Bank and UNODC's Stolen Asset Recovery Initiative exists to support exactly this work.

Two honest caveats belong with that description. The first is that MLAT requests move on government timetables, not commercial ones — months is normal, longer is common — and they are made by prosecutors, not by victims. A company can refer a matter and cooperate; it cannot direct the request or control its priority.

The second is that a criminal forfeiture recovers assets to the state, and whether a victim is compensated depends on the restitution or remission process that follows. Criminal referral is often the right thing to do, and it can unlock evidence and freezes that civil process cannot reach. It is rarely, by itself, the fastest route to getting the money back — which is why serious matters usually run a civil and a criminal track in parallel.

Winning is not collecting: enforcement where the assets sit

A judgment is an instrument, not a payment. In a cross-border matter the court that hears the case is frequently not the place where anything collectible is located, and a domestic judgment has no automatic force abroad.

Recognition of a foreign money judgment is governed jurisdiction by jurisdiction — in much of the United States by state adoptions of the Uniform Foreign-Country Money Judgments Recognition Act, and elsewhere by local statute, treaty, or reciprocity practice. Some jurisdictions will not enforce at all absent a treaty relationship. Arbitral awards travel considerably better: the 1958 New York Convention obliges its contracting states to recognise and enforce awards subject to narrow exceptions, which is a substantial and often decisive advantage of an arbitration clause in a cross-border contract.

This is why collectability belongs at the beginning of the analysis rather than the end. Before a claim is filed there is a question worth answering honestly: if we win, what will we enforce against, and where is it? Where the answer is unknown, an asset trace is not an optional refinement — it is what determines whether the litigation is an investment or an expense.

It is also the question that decides whether to sue at all. A well-pleaded claim against a defendant with no reachable assets produces a judgment and a legal bill. That assessment is part of what litigation support work exists to provide before the decision is made.

How the pieces fit together

Set out as a sequence rather than a menu, the realistic path looks like this.

Hours: notify the banks, request a recall, report to IC3 or the local equivalent, and preserve the evidence intact. This is where most of the money that is ever recovered gets recovered.

Days to weeks: establish where the funds went and what is traceable. This determines which remedies are even available — particularly whether an equitable claim to identified property can be made out, which is the gateway to asset-preservation relief in U.S. federal court.

Weeks to months: choose the forum with enforcement in mind, secure evidence through Section 1782 where the route is open, seek freezing or attachment relief in the jurisdictions where assets sit, and refer criminally where the conduct warrants it.

Months onward: prosecute the claim, and enforce where the assets are rather than where the judgment was obtained.

None of this is a substitute for not being defrauded in the first place. The same verification that supports due diligence before contracting with a U.S. counterparty and diligence for foreign investors entering the U.S. market is materially cheaper than any recovery process described above, and considerably more reliable.

Where an investigator fits

Almost every remedy set out here has an evidentiary precondition. A freezing order over identified property requires tracing to that property. A Section 1782 application requires knowing which U.S. institution holds the relevant records and why. An enforcement strategy requires knowing what the defendant owns and where. A criminal referral is far more likely to be taken up when it arrives organised and documented rather than as a complaint.

That work sits with investigators rather than with counsel, and it is generally counsel who brings them in. Fortaris works alongside litigation teams on precisely this: establishing the movement of funds, identifying the entities and individuals behind them, and assembling a record that will survive scrutiny in whichever forum ends up hearing it — including the law firms that carry the matter forward.

The firm's cross-border and international due diligence practice is built for matters that cross jurisdictions, where the answer depends on reconciling records from several systems that were never designed to talk to each other.