MARKET INSIGHT
Critical risk: Extortion, blackmail and kidnap for ransom
John Chase and Brittany Damora, Schillings’ extortion, blackmail and kidnap for ransom specialists, set out the scope of the threat and what steps family offices and family businesses need to take when faced with this type of critical risk scenario
It’s all about the money Ideological narratives and beheadings dominate the news when it comes to the world of kidnap for ransom. However, financial incentives remain the principal driver for the crime across the globe. On 23 April this year, a Tel Aviv District Court
sentenced a man for hacking the Bank Yahav’s computer system and attempting to blackmail the bank for millions of dollars’ worth of Bitcoin. The individual accessed the bank’s database and compiled a list of its wealthiest clients with the intent to sell their information to the highest bidder on the dark net. Financial success and worldwide public exposure
often force wealthy families and organisations into the spotlight and readily available online databases such as the Panama Papers, Paradise Papers and public registers, including the OECD’s Common Reporting Standard (CRS), only compound this exposure and increases the threat of extortion, blackmail and kidnap. At present, only 10-20% of extortions,
blackmails or kidnaps are reported worldwide, making the precise size of the threat impossible to determine. Nonetheless, privileged sources and anecdotal evidence estimate about 30,000 incidents of kidnap for ransom alone per year,
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with about 1,000 of these involving foreign nationals. In 2018, extortion, blackmail and kidnap
for ransom are extreme and endemic risks for individuals and businesses operating in many countries around the world.
It’s all online Not only is information on the wealth and personal activities of international families increasingly available in the public domain, but criminal gangs and terrorist groups are utilising this information to quickly identify, assess and track potential victims. Intelligent use of social media tools, along with a
level of trust when socialising and doing business online, have fuelled the ever-expanding presence of cyber-crime in extortion, blackmail and kidnapping activities across the globe. Social intelligence monitoring has replaced human
intelligence as the method in which extortionists are targeting and tracking their victims. Recently we advised on a case where a foreign national on secondment with their family was extorted after the children posted details—and unknowingly the precise location—of their relatively lavish, but temporary, home on social media.
Find the fix Extortion, blackmail and kidnap for ransom response often begins with an insurance policy. Policies are issued on an indemnity basis and can be sold by specialist brokers to businesses, organisations and individuals. They can be tailored to specific requirements which cover wealth owners, their spouses, extended family, guests and employees of the household. Coverage can encompass extortion, blackmail, kidnap, cyber-attacks, piracy, business interruption, illegal detention and any associated medical costs, property damage, legal fees and other financial expenses. Insurance companies often use the services of
specialist teams, including Schillings, to provide immediate advice and a collaborative response. The response team, which always works on
behalf of the client and not the insurer, employ experienced advisers to navigate an extortion, blackmail or kidnap for ransom incident. Utilising this type of adviser ensures a nearly perfect success rate for safely resolving these types of critical incidents.
ISSUE 73 | 2018
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