High Court strikes down challenge to first unexplained wealth order case

Taxis waiting in a queue outside Harrods in London
istock_ultraforma_aw
Share this content

The wife of a wealthy banker has failed in a High Court challenge to the UK’s first ever unexplained wealth order, and must now provide evidence to the National Crime Agency that she was able to afford £22m worth of UK property.

In a judgment passed this week Justice Supperstone dismissed the attempt by ‘Mrs A’, who cannot be named for legal reasons, to strike off the National Crime Agency’s (NCA) application for two unexplained wealth orders.

Brought in via the Criminal Finances Act 2017, an unexplained wealth order (UWO) allows government agencies such as the NCA or HMRC to investigate the source of funds used to acquire an asset where its owner does not appear to have sufficient income to have made the purchase.

In February 2018 the NCA applied for two UWOs requiring Mrs A to explain how she had funded and purchased two properties in the South East of England, valued in the region of £22m. According to the NCA, one property was bought by an offshore company in the British Virgin Islands, allegedly using stolen funds, while the agency filed another UWO with the High Court against a UK property it believes she owns.

Mrs A is described by the NCA as a politically exposed person from a non-EEA country. During the trial hearing, the court heard that her husband had been chair of a partially state-owned bank in the same country, but is currently in prison after being convicted of fraud and embezzlement offences relating to the bank.

The court also heard details of Mrs A’s lavish spending habits, which included records showing that she spent £16.3m at luxury department store Harrods over the course of a decade.

In July 2018 Mrs A challenged the UWOs, but this week’s ruling dismisses that challenge in full. The properties remain frozen, and if Mrs A either fails to respond or provides an inadequate response this can be used as grounds to pursue confiscation of the properties through civil proceedings.

The UWO powers are intended to help UK law enforcement tackle the flow of illicit cash into the UK, and came into force earlier this year. This case is the first UWO filed by the NCA.

To obtain a UWO, a designated government agency such as the NCA or HMRC must apply to the High Court and show “reasonable cause” that the suspected person holds property or assets worth more than £50,000, and there are “reasonable grounds” for suspecting that the individual’s known income would not explain the ownership of the property.

In a statement released after the ruling Donald Toon, NCA director for economic crime, said he was pleased that the court dismissed the respondent’s arguments.

“This demonstrates that the NCA is absolutely right to ask probing questions about the funds used to purchase prime property,” said Toon. “We will continue with this case and seek to quickly move others to the High Court."

Transparency International has campaigned for the government to take stronger action against illicit wealth being hidden in the UK, and welcomed the outcome of the hearing.

 “We’re delighted that this investigation will continue and unexplained wealth orders are proving to be a valuable tool in the fight against corruption,” said its UK director of policy Duncan Hames. “This decision to hold this hearing in public is a welcome step that should reassure the public that action is being taken against dirty money in our economy.”

Transparency International has previously identified £4.4bn worth of property across the UK that it considers to have been purchased with suspicious wealth.

To date this is the only known case involving UWOs. The respondent has seven days to appeal this ruling.

About Tom Herbert

Tom is editor at AccountingWEB, responsible for all editorial content on the site. If you have a story that might interest us or wish to comment on the site's coverage get in touch via the site's private message function or Twitter DM (@AWebTom)

Replies

Please login or register to join the discussion.

avatar
04th Oct 2018 17:48

This could send shock waves through London's prime property market and result in a stampede of nervous sellers and large price falls.

One would have thought the conveyancing solicitor will have questions to answer (to the SRA) if they do eventually seize this woman's house.

Thanks (3)
avatar
to Justin Bryant
05th Oct 2018 23:48

.

Thanks (0)
avatar
to Justin Bryant
05th Oct 2018 23:49

Not if they did their job properly

Thanks (0)
avatar
05th Oct 2018 10:17

Perhaps the NCA could review the shenanigans of a certain MP for Leicester who amassed (allegedly) £4 million in property on just an MP's salary. When asked where a certain large deposit into his bank account came from he blithely replied he had no idea. Oh well no evidence of any wrong doing there - said the Standards Comittee!! We'll gloss over the rent boys and Peruvian White Jumping Powder incident.

Thanks (6)
avatar
05th Oct 2018 10:33

Extract above
'Brought in via the Criminal Finances Act 2017, an unexplained wealth order (UWO) allows government agencies such as the NCA or HMRC to investigate the source of funds'
The legalisation is 30 to late but its better than nothing, also why not name and shame this greedy individual who even challenged the National Crime Agency’s (NCA) application for two unexplained wealth orders.Such decadence, such arrogance, shows you just how she regarded the law.

Thanks (3)
avatar
05th Oct 2018 10:47

London is hub known to be a vehicle to clean dirty money. This revelation not good for establishment. London has nothing but sordid institutions, a bloated financial sector, unfounded housing and insurance sector at the cost of pension sector. London economy sleep walking in falsehood, with unfounded value of money and various types prostitution rackets. How many employers (umbrella companies) have abused various tax avoidance schemes ie 'contractors Loan' by deliberate defrauding the HMRC and now the employees have to foot the bill since 1999.
These type of stories sound all good but in fact nothing comparing to hip of black money circles around England. Vijay Malya made run from India with 100s of millions of pounds and now we gave his sanctuary. Phillip Green send over a Billion pound to his wife in Malta while leaving his company with £500 million pension deficit.
That Mrs A is and her £22 million is nothing but of course a lot for those who loves to dwell in soap.
Australia has taken a strong step over property ownership by non residents. UK can never take that step and neither UK has any willingness to do so. I feel very angry that in the UK Capital growth has surpassed the revenue. Without mummy-daddy or Govt equity loan no first time buyer can buy a home.
The story sounds so well for have not like us who works hard and not adequately paid. But this excitement shall not go far. Mrs A is wealthy and can buy her way out and UK shall allow it of course provided she agrees to share her illicit wealth with the lawmakers.
India is a good example. This is the best way of siphoning money from India.
UK Govt is powerful enough to stop this nonsense right now and bring a balance but it doesn't have the willingness. Because we don't have any avenues to make money.

Thanks (0)
avatar
05th Oct 2018 10:45

It is estimated there are up to 10,000 homes in the city of Westminster, which no one knows who the ultimate owner is, we may have found the owner of at least one of them.

Thanks (0)
avatar
By tedbuck
05th Oct 2018 12:52

A guy on the radio who had been shafted in a foreign country by a Mafia style government renowned for its current activities reckoned that the dirty money in the UK from said countries ran into £billions. Not surprising then that some of these people are now upping sticks and moving out so that their wealth is protected. Should help to reduce UK house prices - especially at the top end which presumably will wind its way down the chain.
No wonder said country is getting a bit uptight - think of all the Dosh they could lose.
I also wonder whether the lawyers will be looked at - as they will all be magic circle the answer is probably not, but they should be as a matter of course if it is shown that the money is dirty money. Father Christmas may tick a box but surely can't be taken seriously. Didn't I read that a certain prime minister of said country on a salary of £100,000 a year had been buying property here valued in the millions. I spent a week in their capital city a few years ago and was impressed by the standard of cars there - everything from Bentleys down and all driven by armed guards. No corruption there then.

Thanks (0)
avatar
10th Oct 2018 13:22

This is now a major story I note:

https://www.bbc.co.uk/news/uk-45812210

Thanks (0)