USA – ILLINOIS Trends and Developments Contributed by: Kristofer Swanson, Andrew Bayer and Jordan Kraner, Hilco Global Professional Services
funds may already have moved far beyond immedi- ate reach. Jurisdictional structuring and investigative friction Modern fraud frequently exploits geographic and legal boundaries to create frictions in the discovery, inves - tigation and recovery efforts. A representative pattern illustrates the challenge: • a fraudulent insurance claim or payment request is initiated from Illinois, using legitimate credentials or a compromised internal process; • the claim is tied to activity in a second jurisdiction – for example, a fictitious vendor, repair facility or service provider that appears credible on paper; and • proceeds are directed to accounts, payment plat - forms or intermediaries located in a third jurisdic - tion, sometimes with additional layering through fintech channels or digital assets. Whether deliberately engineered or opportunistic, this structure creates immediate friction: • identifying the relevant actors requires co-ordina - tion across jurisdictions; • obtaining records may involve multiple institutions with different legal requirements; • preserving assets becomes more difficult as funds move through successive layers; and • early missteps can allow value to dissipate before a coherent response is in place. For companies, the lesson is not theoretical. Even relatively modest schemes can quickly become multi- jurisdictional problems, requiring co-ordinated investi - gative and legal strategies from the outset. Fragmented and expanding evidence sources The evidentiary landscape has also expanded signifi - cantly. Relevant information may now reside across: • personal devices and text messaging; • encrypted or ephemeral messaging platforms; • cloud-based collaboration tools and shadow IT environments; • enterprise systems and transactional databases;
• access-control logs and physical security systems; • video surveillance; and • AI and LLM-based platforms, including chat histo - ries, prompts, outputs and associated metadata. The emergence of LLMs introduces a new category of potential evidence. In some organisations, employees rely on AI tools to draft communications, analyse data or generate work product. These interactions may cre - ate records reflecting intent, knowledge, timing and decision-making context, depending on system archi - tecture and retention settings. In certain matters, LLM artifacts can corroborate or challenge other evidence, or provide insight into how particular actions were conceived or executed. At the same time, these records may be transient or sub - ject to platform-specific retention limits, making early identification and preservation critical. Taken together, these dynamics create asymmetry: organisations that respond quickly can preserve both evidence and value, while those that delay often lose both. Investigative opportunities: from inquiry to strategic leverage When fraud is suspected, companies are not limited to reactive investigation. The early stages of a matter present affirmative opportunities to preserve value, generate leverage and shape outcomes. These opportunities are most effectively pursued by integrated teams of white-collar attorneys and foren - sic experts operating under privilege, ensuring that legal strategy, fact development and evidentiary con - siderations advance in parallel. Key opportunities include the following. Early asset visibility and constraint Rapid analysis of payment flows, account activity and counterparties can determine whether funds remain within identifiable channels. Early engagement with financial institutions, payment processors, or interme -
diaries may allow companies to: • interrupt or reverse transactions;
397 CHAMBERS.COM
Powered by FlippingBook