A businessman in the North of England, U.K., has had his £10 million ($12.2 million) property business seized by a crime agency until he can explain how it was funded.
It is the first time that authorities in the U.K. have used an Unexplained Wealth Order (UWO) against somebody suspected of being involved in serious organized crime.
UWOs allow crime agencies to seize the assets of “a person who is reasonably suspected of involvement in, or of being connected to a person involved in, serious crime,” according to the Home Office.
Andy Lewis, head of Asset Denial at the National Crime Agency (NCA), said the owner of these properties will now have to explain how they were financed.
“The NCA will not shy away from complex and detailed investigations against those suspected of serious crime,” Lewis said.
“Serious crime” could include drug trafficking, armed robbery or supplying firearms.
UWOs have been used twice since their introduction in 2018. Once to seize the £22 million ($27 million) London homes of Zamira Hajiyev, the wife of Jahangir Hajiyev, a jailed Azeri banker.
Of the other UWO, less is known other than it concerns £80 million ($98 million) worth of London property thought to have been purchased by fraudulent activities.
Stories of ill-gotten gains like these have captured the imagination of the public. Recently, a court in the U.K. heard how Hajiyev spent £16.3 million ($20 million) on shopping trips to Harrod’s department store.
There is also an association with popular TV shows such as the BBC’s McMafia, says Jonah Anderson, a partner at law firm, White & Case.
This case is different, however, Anderson believes: “The focus of previous orders has been on non-European PEPs [politically exposed persons] with U.K. assets, but these orders can be useful in disrupting domestic organized crime.”
UWOs are not the only tool in the box when it comes to fighting suspicious real estate purchases, however. HMRC has been asked to take a tougher stance on those selling properties. Estate agents have been labeled the “weak link” in money laundering crackdowns by Ben Wallace, the security minister at the Home Office.
However, Anderson believes that UWOs will be rolled out more readily. “Going forward, given the focus on PEPs in anti-money laundering law and regulation, I suspect that they may become the practical focus of the UWO regime.”