Alleged ponzi schemes have permeated the financial landscape. Recovering losses for victimsrequires locating assets of the ponzi schemers or which were fraudulently acquired. Oftentimes, that requires litigation in foreign countries where the assets have been hidden. However, foreign-based litigation does not preclude a litigant from using US discovery in aid of foreign proceedings.

US federal law empowerscourts to permit any interested pary to obtain discovery for use in foreign proceedings from a person located in the district, even if this evidence could not be accessed under the rules of the foreign proceeding. 28 U.S.C Section 1782 (a) does not impose a foreign discoverability requirement nor must the foreign proceeding actually be pending. Section 1782 requires only that the discovery be useful.

In many foreign jurisdictions, discovery can be onerous from non-parties. For instance, in Canada, discovery will only be allowed if a) the moving party has been unable to obtain the information from other persons, b) it would be unfair to require the moving party to proceed to trial without the opportunity to obtain the discovery and c) the discovery will not entail unreasonable expenses or unfairness to the non-party. Canadian courts have viewed the use of Section 1782 favorably in proceedings pending there. In CC Chemicals Ltd. v. Sternson Ltd., (1980) 116 D.L.R. (3d) 239 (S.C.), the court permitted Section 1782 to fill a procedural gap since it did not otherwise interfere with the Canadian action. In Penty v. Law Society of British Columbia, (1999) 69 B.C.L.R. (3d) 159 (S.C.), the court concluded that a Canadian court will generally be reluctant to prevent a party from gathering evidence extraterritorially. Efforts to gather evidence in the US did not present a comity concern nor an overriding issue of unfairness.

From this perspective, Section 1782 offers litigants the unparalleled procedure to obtain discovery from US sources under broader discovery rules and yet still utilize the foreign courts to obtain the remedy over assets located in that foreign locale.