Counterbalancing a criminal investigation

My colleague Ilse Engwirda wrote the blog “Na de FIOD inval” (after the FIOD raid) about what you can do immediately after an FIOD raid. This is usually followed by a long, uncertain period. Investigations often take more than a year. The long duration of a criminal fraud investigation feels like a war of attrition. Everything that was easy until then suddenly becomes difficult, especially if there has been publicity: banks, insurers and professional associations ask questions, visas for trips abroad are no longer issued automatically. During this period, what can you do yourself? Do you always have to wait idly by, or can you also take action and even regain some control?

Pre-trial detention

Pre-trial detention is a measure that is disruptive in all areas: family, work, income. Pre-trial detention is applied more often in police investigations than in FIOD investigations. But pre-trial detention should never be applied as an ‘advance’ on a prison sentence to be imposed later. There must be valid reasons to detain someone: risk of flight, risk of collusion (influencing witnesses or disposing of evidence or illegally obtained assets) or risk of recidivism. Sometimes the seriousness of the offence in itself is also a reason to detain someone but this does not easily come into the picture in fraud investigations.

The European Court of Human Rights (ECtHR) sets high standards for the application of pre-trial detention. After all, someone has not (yet) been convicted and then still depriving them of their freedom is a heavy measure. As far as the ECtHR is concerned, the Netherlands, and thus also the Dutch courts, apply pre-trial detention too easily and do not give sufficient reasons why pre-trial detention is appropriate. That makes challenging it worth considering. Sometimes bail, an ankle bracelet, certain travel restrictions or contact restrictions (with co-defendants) are sufficient to achieve the effect (desired by the prosecution). So, if a judge rejects that kind of proposal, he should give good reasons. By no means always does this happen. Then an appeal pays off.

What also matters quite a bit: where are you detained during pre-trial detention and are restrictions imposed? Being far from your family and friends (and lawyer) is not only inconvenient but also very unpleasant. And then if you are not allowed to make phone calls, read newspapers, watch television, or talk to others, it makes it all the harder. Such restrictions are sometimes imposed too easily or for too long. There too, it pays to remain critical, and you can request that the restrictions be ended.

Prejudgment attachment

My colleague Ilse Engwirda already wrote: try to avoid selling valuable goods that have been seized. We see in practice that cars are sold fairly soon after seizure by the prosecution. For jewellery and art, due to personal value, the policy is not to sell immediately, but sometimes this happens anyway. Since this is usually done at auction, proceeds are then often low and selling costs high. It pays to see if security can be provided: your car back if you pay an agreed amount. It is also sometimes possible to sell on better terms in consultation with the prosecution.

Cryptos are also usually sold by the prosecution soon after seizure. This does not take into account the price or price expectations. This can turn out badly – although we have also seen cases where a client actually benefited. If the seizure is later returned, you get back the value for which the crypto was sold. Lost profits because of price rises in the meantime are unfortunately not refunded, much to the frustration of many. Here, too, it pays to see whether consultation with the Public Prosecution Service is possible to achieve a better result.

Above all, also check whether too much has been seized. For instance, in tax cases it is fairly standard to attach 100% of the suspected tax loss while fines of that amount are almost never imposed. This while deprivation, for which a prejudgment attachment can also be levied, is not an issue in tax criminal cases: the Tax Administration has to deal with that itself by imposing assessments. Sometimes those assessments also arrive on the day of the FIOD raid or soon after. But that still does not make an attachment by the FIOD and the prosecutor as an aid to the Tax Administration lawful. And beware: those assessments, and sometimes their immediate collection, should be objected to in good time.

Another point of interest: third parties can also be seized. Sometimes this happens ‘by accident’ because the FIOD does not know who owns a watch, jewellery or a car. Moreover, in the case of married couples, the FIOD often assumes that there is a community of property, while this is far from always the case and in that case the assets of the spouse are seized unjustly. However, it also happens that third-party assets are deliberately seized because the FIOD suspects that the third party only has the assets in its name to make recovery more difficult; there must be sufficient indications of this. In all such situations, it pays to see whether it is necessary to file a complaint with the court against the seizure.

Nevertheless, the court is reluctant to lift criminal attachments because it only tests whether it is highly unlikely that a pecuniary punishment or measure will materialise in a substantive hearing. At the start of a criminal investigation, a judge almost never considers it ‘highly unlikely’. During the criminal investigation, when there is more clarity, a prejudgment attachment may indeed become disproportionate. This can be raised in complaint proceedings and must then be properly substantiated, the Supreme Court ruled in 2023.

Banks

Criminal investigations by the FIOD often lead to questions from banks where you hold accounts, have a mortgage, or purchase other products, see also the blog Tricky questions from the bank. Regularly, a bank responds to a press release issued by the FIOD or the public prosecutor, but the questions may also be prompted by the FIOD requesting information from your bank in the period leading up to the raid and because the public prosecutor has seized a bank account. Then, for the bank, one and one becomes two and they start asking for explanations. Under the Prevention of Money Laundering and Financing of Terrorism Act (Wwft), the bank may, to a certain extent, ask questions and, as a customer, you are also obliged to answer them. But especially if the criminal investigation is still ongoing, it is important to think carefully about how you answer the questions.

What we regularly see in practice is that bank account transactions, which could be related to criminal investigations, raise questions. For example: payments for security deposits to the Public Prosecution Service, (high) fines to the CJIB, but also payments to accounts of penitentiary institutions. Here, too, it is important to think carefully in advance about how those payments will be made and how questions about them will be answered.

If a bank concludes that the bank account was used for the factual complex that the FIOD is investigating, and where the FIOD suspects fraud, banks often want to get rid of their customer. Sometimes, for example in purely tax matters, they then wait for the criminal investigation, but for other suspected frauds, the bank does not always want to wait for that and wants to cancel the accounts in advance. For entrepreneurs, new products are sometimes refused pending the criminal investigation, such as new loans, new accounts, etc. Sometimes it then helps to seek timely accommodation with a new bank, which has not yet had questions from the FIOD, but if there has been media attention, that is usually not an option. In any case, it requires customisation to maintain good contact with the bank and see how to minimise obstacles to banking during the criminal investigation.

‘Counter-investigation’

Many of our clients feel the need to ‘go and explain’ to the FIOD. That is not always the right ‘mind-set’ as the FIOD is usually very well prepared. See my colleague Victor Langenburg’s blog about that. ‘Just explaining’ about matters that happened years ago is risky: before you know it, things have gone slightly differently in your memory than in practice. You have to avoid that being held against you later. And to temper expectations: ‘just explaining’ usually does not lead to a faster investigation because the FIOD just wants to form its own opinion anyway, and that is what may be expected of the FIOD.

Many clients also pin their hopes on witness statements, reports or (tax) opinions that might show that everything is not as the FIOD suspects. These are often witnesses who are already on the FIOD’s list, so (unfortunately) it remains to be seen what the FIOD will say. Having reports or (tax) opinions drawn up during a criminal investigation requires customisation – many experts are not keen on doing this in the context of a criminal investigation. The disadvantages are that, without proper questioning, it does not always come out as hoped or that the FIOD, the Public Prosecution Service and judges may overrule the opinions because they ultimately have to make their own decision on suspicion based on their own investigation and in doing so do not want to rely on these kinds of documents.

It often does pay to be critical of the official reports provided during the investigation: do they match the facts, is further investigation needed into (as a result of) what is in those official reports? But even then, it is important to weigh up when to give a response or request further investigation, and to whom. During the criminal investigation, further investigation can be requested from the examining magistrate, but he is often reluctant to grant it because he prefers to wait for the final official report first. Although you can appeal against a refusal by the examining magistrate to the court, it is equally reluctant.

In ‘pure’ money-laundering investigations, in which the source of income or assets is criminally investigated, it is important to make a timely and substantiated statement. My colleague Victor Langenburg also wrote a blog on this subject.

In conclusion

After a FIOD raid, a lot comes your way. In the short term, preparing for an interrogation is important and sometimes the assessment of pre-trial detention. If an attachment has been made, it is also important to prevent goods from being sold quickly – and at unattractive prices. Banks can also come up with all kinds of probing questions soon after a raid. Especially for entrepreneurs, the continuity of the business can then be at risk.

In the somewhat longer term, the seizures made remain a concern. If the investigation takes a long time, it pays to see whether the attachment should not be (partly) lifted because it was placed for too high an amount. And even in the longer term, it is important to be critical of the results of the FIOD investigation, and to see whether counter investigations are necessary.

Our specialists will be happy to help you with all these issues and the considerations to be made.