Evidentiary Challenges In Cross-Border Financial Crime
1. Case 1: Nepalese Citizen Defrauding Foreign Investors
Background:
A Nepalese businessman was accused of soliciting investment from foreign nationals in a “tech startup” that never existed. Funds were sent from abroad to Nepalese bank accounts, then partially moved to India.
Evidentiary Challenges:
The funds originated overseas, so Nepal Police needed bank statements from foreign banks.
Evidence of emails and contracts were stored on foreign servers.
Witnesses and victims were in multiple countries, making testimony collection difficult.
Court’s Findings:
The Supreme Court emphasized that foreign evidence could be admissible if it is properly authenticated and translated.
The court allowed notarized electronic records from foreign authorities to be used.
Outcome:
The accused was convicted, but only a portion of the funds could be traced.
Highlighted the difficulty in tracing funds moved quickly across borders.
2. Case 2: Cross-Border Cryptocurrency Fraud
Background:
Several Nepalese individuals operated a cryptocurrency trading platform promising high returns. Investors from Nepal and abroad sent money, but the platform collapsed.
Evidentiary Challenges:
Transactions were on decentralized blockchain networks, making identification of account holders difficult.
Some wallet addresses were controlled by foreign nationals, complicating tracing.
Digital evidence from exchanges abroad required international cooperation.
Court’s Findings:
The court accepted forensic analysis of blockchain transactions as evidence.
It ruled that even if funds were moved abroad, the act of soliciting money in Nepal made the accused liable under domestic law.
Outcome:
The accused were convicted for fraud and money laundering.
The case emphasized the importance of forensic experts in cross-border digital evidence.
3. Case 3: Hundi/Informal Remittance Money Laundering
Background:
A network of individuals used informal hundi systems to transfer money from Gulf countries to Nepal. Investigators suspected it involved proceeds from illicit activities abroad.
Evidentiary Challenges:
There were no formal records, making it hard to trace the flow of funds.
Witnesses (brokers) were reluctant to testify.
Some funds were converted to gold and moved physically across borders.
Court’s Findings:
The court relied on circumstantial evidence, including witness testimony, intercepted communications, and tracing of physical assets.
The judgment highlighted that in absence of documentary proof, corroborated witness and pattern evidence can be sufficient.
Outcome:
Several operators were convicted for money laundering and violation of foreign exchange regulations.
Set precedent on using indirect evidence in cross-border financial crimes.
4. Case 4: Fraudulent Loan Scheme with International Funds
Background:
A Nepali NGO collected foreign donations promising development projects abroad. Donors were overseas, but the funds were diverted to private accounts in Nepal.
Evidentiary Challenges:
Bank statements and wire transfers were held in foreign jurisdictions.
Donor communications were stored on foreign email servers.
Need to show the misappropriated funds were used for personal purposes.
Court’s Findings:
Court allowed notarized copies of foreign bank statements and emails, confirmed by Nepalese consulate officials, as evidence.
Ruled that misuse of funds collected in Nepal, even with foreign origin, constitutes domestic criminal liability.
Outcome:
NGO directors were convicted for fraud and embezzlement.
Established the principle that foreign-origin funds under Nepalese control fall under Nepalese law.
5. Case 5: Money Hidden in Foreign Banks by Nepali Nationals
Background:
A wealthy Nepali businessman transferred millions of rupees to Swiss and Singaporean banks to avoid tax obligations. Domestic investigation sought to recover funds and prosecute for tax evasion.
Evidentiary Challenges:
Access to foreign bank accounts required international treaties.
Documents from foreign banks needed authentication and translation.
Need to prove these funds were proceeds of crime in Nepal.
Court’s Findings:
Court recognized evidence from foreign jurisdictions could be used if properly notarized and certified.
Circumstantial evidence, such as domestic assets and unexplained wealth, strengthened the case.
Outcome:
Partial recovery of funds, conviction of businessman for tax evasion and money laundering.
Highlighted the difficulty of recovering assets held abroad even after successful prosecution.
6. Case 6: Cross-Border Investment Scam Involving Multiple Jurisdictions
Background:
An investment company in Nepal promised huge returns through foreign stock trading. Investors from Europe, Nepal, and India transferred funds, but the company collapsed without traceable profits.
Evidentiary Challenges:
Multiple currencies, multiple jurisdictions, and digital records stored abroad.
Difficulty in authenticating foreign evidence and ensuring chain-of-custody.
Witnesses and victims scattered across continents.
Court’s Findings:
Court accepted detailed forensic accounting reports tracing partial funds.
Ruled that fraudulent intent in Nepal was sufficient to establish liability.
Outcome:
Several directors were convicted.
Case demonstrates the need for multi-jurisdictional evidence gathering and international cooperation.
✅ Summary of Patterns from These Cases
Foreign Evidence Authentication: Notarized, certified, and translated copies are essential.
Digital Forensics: For blockchain, email, and online platforms, expert testimony is crucial.
Circumstantial Evidence: In absence of direct records (like hundi or hidden accounts), patterns, witnesses, and indirect proof are admissible.
Partial Asset Recovery: Even when convicted, recovering funds held abroad is challenging.
International Cooperation: MLA treaties and consulate assistance play a central role.
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