A challenge against an Unexplained Wealth Order (UWO) by a wealthy banker's wife has been dismissed by the high court, meaning she could lose millions of pounds in UK property assets.
Mrs A, who cannot be named for legal reasons was issued with an UWO in February 2018 after the National Crime Agency successfully applied for explanations to be provided as to how properties in the South East of England, valued in the region of £22 million, had been funded and purchased. Mrs A, a Political Exposed Person from a Non EEA country, sought to challenge the Order and the ruling yesterday dismissed that challenge in full.
The NCA’s legal team explained that Mrs A lived a lavish lifestyle which included spending over £16 million at Harrods over 10 years. The UWO was requested over a property bought for £11.5 million in 2009 via a BVI based company which was then subject to a £7.5 million mortgage from Barclays Suisse.
Mrs A, in applying for indefinite leave in the UK in 2015 told UK officials that she was the beneficial owner of the BVI company, however BVI tax authorities told their UK counterparts that in fact, her husband (Mr A) was. Mr A had previously served as chairman of a non EEA state owned bank before he was accused of “misappropriation, abuse of office, large-scale fraud and embezzlement”, and convicted at trial and jailed.
Mr A will now have to explain how she acquired the property and failure to do so could potentially result in civil proceedings being initiated to seize it.
Donald Toon, NCA director for economic crime, said the ruling "demonstrates that the NCA is absolutely right to ask probing questions about the funds used to purchase prime property. We will continue with this case and seek to quickly move others to the High Court. We are determined to use the powers available to us to their fullest extent where we have concerns that we cannot determine legitimate sources of wealth."
However, Ben Rose, a founding partner at criminal law firm Hickman & Rose, warned that the ruling could mark a “turning point in our justice system that could have a significant negative impact on people who don’t spend £16 million at Harrods.”
Mr Rose said the “key problem” was that UWOs “invert the burden of proof”.
“English law has,” he explained, “for centuries, relied on the principle that an accuser as to prove guilt. Unexplained Wealth Orders mean the accused now has to prove their innocence.
“At the moment the public seems to accept this radical change. Perhaps it is because of who is being accused in this case and others like it. But if this principle were to be applied to ordinary people, in other areas of law, there would be outcry.
“Someone accused of committing a historic fraud might be obliged to provide banking paperwork dating back 20 or 30 years, for example. The allegation may be a complete fabrication. But if the accused can’t show the paperwork, they could be found liable.
“The facts of this particular case may be unpalatable. But there’s a real principle of law at stake.”
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