Civil Search Warrants: How They Are Used
In Fraud Cases
ACFE 2014 Canadian Conference
September 8, 2014
Rosanne Walters, CPA, CA, CFE, CBV
Michael Galambos, LLB , BA
Anton Piller Orders
Overview
Definition and History of the Anton Piller Order
Criteria to obtain the Order
Issues arising from Anton Piller cases in Canada
Supreme Court of Canada guidelines to conduct Anton Piller Orders
Connection with Mareva Injunctions
Use of Anton Piller Orders in recent fraud cases
Benefits of Anton Piller Orders
Opportunities for CFEs
Questions and answers
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Definition
The Anton Piller Order is a court order that provide the right to search premises
and seize evident without prior warning (ex-parte).
Essentially, it is a civil search warrant.
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First Case
Anton Piller KG v. Manufacturing Processing Ltd. (1976)
Anton Piller (a German company) sued Manufacturing (an English sales agent)
because of alleged leaks of copyrighted information to competitors. Anton Piller
was a major supplier to IBM.
This case established the criteria that must be met to obtain an Order.
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Criteria
• A strong Prima Facie case
•Misconduct causes serious damage to plaintiff, potential or actual
• Convincing evidence that the defendant has in it possession documents or
information that is incriminating
•A real possibility, factually demonstrated, that the defendant may destroy such
material before the discovery process can do its work in the normal course of civil
litigation
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Prima Facie Evidence
Prima Facie means..“At first appearance”
It does not need to be conclusive or irrefutable. Just strong enough to warrant
going to trial.
In the original Anton Piller case, the Prima Facie evidence was evidence that two
agents of the Defendant were corresponding with competitors about the
copyrighted information.
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Damages
Damages to the Plaintiff must be serious.
In the original Anton Piller case, there was a huge possibility that there would be
damages if competitors obtained copyrighted information, especially at the time
Anton Piller was going to market with some new innovations.
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Accounting Records
Possession of Evidence
There must be convincing evident that the Defendant has in its possession
incriminating evidence.
In the original Anton Piller case, the evidence suggested that the Defendant had
correspondence and other evidence to support the sharing of copyrighted
information with German competitors.
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Destroy Evidence
There must be a real possibility that the Defendant may destroy evidence.
In the original Anton Piller case, it was determined that there was grave danger
that the evidence of providing information to competitors would have been
destroyed if notice of the application was given.
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Issues Arising from Anton Piller Orders in Canada
•Privacy issues when a search occurred in a home
•Dealing with privileged documents
•List of contents removed from premises was not itemized
•Documents lost or destroyed after the Order carried out
•Subsequent litigation arose due to privileged documents
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Guidelines established by the Supreme Court for conducting
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•Normal business hours
•Defendant needs to be present during the search
•People who conduct the search should be specified and limited in number
•A copy of claim should be serviced on Defendant
•Defendant has right to contact a lawyer
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Guidelines established by the Supreme Court for conducting
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•A detailed list of evidence removed should be made
•Documents seized should be placed in the custody of a Supervising Solicitor and
the Defendant should have an opportunity to review them
•Contested evidence should be kept in the Supervising Solicitor’s custody
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Role of Supervising Solicitor during the search
•Act neutral
•Explain the Court’s Order to the Defendant
•Supervise the search for and seizure of evidence
•Objectively report to the Court
•Aid the Court and counsel for all parties in technical matters
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Role of Supervising Solicitor after the search
•The Order should make clear the responsibilities of the supervising solicitor after
the search
•File a report of the search within a time limit describing the search and evidence
seized
•Oversee the review of evidence
•Protect privilege
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Mareva Injunctions used with Anton Piller Orders
•This is an interim or interlocutory injunction made, in most cases, without notice.
•Prohibits the Defendant from disposing of assets pending the outcome of the
action between the parties.
•Must show a real risk that the assets may be disposed of.
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Recent Fraud Cases
•Commonly used for commercial files but increasingly being used in fraud files
•Especially, complex family law matters where information is being concealed
•Often the files are sealed, so frequency of use of the Anton Piller Order may not
be commonly known
•Due to the ease inwhich electronic information can be destroyed and/or
concealed, the ex-parte order helps preserve this evidence
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Recent Fraud Cases
•Family Law - Undisclosed income and assets (2013)
The Plaintiff knew the Defendant spouse earned substantial undisclosed income
from criminal activity. The defendant was profiled and electronic evidence was
obtained that supported that there was a strong possibility of undisclosed income.
An Anton Piller Order and a Mareva Injunction was ordered.
As a result of the civil search, significant cash was seized, as well as other
expensive assets and electronic data. The case settled prior to the electronic data
being analyzed.
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Recent Fraud Cases
Fraud Against an Estate – Theft of funds (2013)
An individual worked himself into the confidence of an elderly person who willed
him $750k to him and passed away. The rogue collected the funds.
The Police investigated the individual and found that he had committed the same
act with a second elderly person and was about to collect $250k on this other
estate.
Before the executor of the second estate paid out, the heirs to the first estate
brought a civil action and obtained a Mareva Injunction and Anton Piller Order.
The individual’s apartment was searched and paper evidence of existing bank
accounts was found. The bank accounts were frozen.
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Recent Fraud Cases
Family Law – Undisclosed Income for Support Purposes (2012)
The Plaintiff knew her Defendant spouse carried on an internet business. The
income from this business was not disclosed. Without an accurate determination of
income, spousal and child support could not be determined.
In order to gain evidence of the business income, an Anton Piller Order provided
access to the Defendant’s computer records. The Mareva Injunction prevented the
Defendant from using the income derived from this business until the litigation
matter was resolved.
During the search, computers, laptops and other electronic devices were seized.
Based on the analysis of these devices and other seized documents, an estimate of
the Defendant’s income was determined and support established.
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Recent Fraud Cases
Family Law – Removal of Family Assets from the Jurisdiction (2005)
The Plaintiff believed her husband had moved RRSP funds to Ireland and was
planning on moving there.
The Plaintiff attempted to obtain disclosure through a number of hearings. The
husband did not comply and was found in contempt of court.
An Anton Piller Order was ordered to search the home where the husband lived
and removed items to assist in the dispute.
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Benefits of using the Anton Piller Order
•Saves cost to litigants when the Plaintiff is in a position where it would take
numerous court applications to obtain the evidence
•Saves evidence from disappearing
•Serves as a motivator for the Defendant to settle
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Opportunities for Investigators
•Provide strong prima facie evidence
•Assist in conducting the search
•Analyze the information obtained in the search
•Provide expert witness testimony
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Experts Used
•Forensic Computer Experts (review online internet activity, copy hard-drives,
analyze data, attend search party)
•Forensic Accountants (provide evidence in Court, review and analyze evidence
obtained by the Order)
•Investigators (provide evidence for the Order, attend search party, provide ongoing evidence)
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Contact
Rosanne E. Walters
rwalters@bdo.ca
T: 604 646 4381
Michael Z. Galambos
mgalambos@wdwlaw.ca
T: 604 629 1052
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