Spear’s have published a blog that I wrote about Unexplained Wealth Orders. There is still a great deal of uncertainty about this relatively new kind of confiscation order, but they shouldn’t be seen as a risk for wealthy families. You can read the original text of the article here https://www.spearswms.com/unexplained-wealth-order/.
He had a glittering lifestyle of yachts, jets, and selfies with the likes of Beyoncé and Meghan Markle. But this week, Mansoor ‘Manni’ Hussain agreed to hand over a £10 million property portfolio, including a new apartment building in Leeds, to the National Crime Agency, apparently conceding that his wealth was ‘unexplained’. So, should others with valuable jewellery or a socialite lifestyle be worried?
The first Unexplained Wealth Order (UWO) was made in 2018, against the wife of an Azerbaijani banker, whose spending sprees in Harrods and other luxury boutiques around London were the stuff of legend.
She couldn’t produce an explanation of the source of her funds in a way which satisfied the court. The supposition was that her lifestyle derived from money missing from the bank of which her husband had been Chairman, but importantly, that didn’t need to be proved.
What’s controversial about these orders (introduced in 2017) is the fact that they reverse the normal burden of proof. Instead of the NCA having to build a case that a person is laundering money, for example, they only have to say that there is no obviously rational explanation for that person’s wealth, leaving them to prove that there is.
This all sounds alarming for those with evident trappings of wealth. But this doesn’t necessarily mean that wealthy individuals need to pack away their Ferragamos and move to a semi. All that glitters is not gold, and not all gold is a sign of wrongdoing.
In April this year, one case was dismissed because the individuals had indeed shown the court that there was an explanation for their wealth. Although the two defendants were family members of a (now deceased) Kazakh individual widely believed to be a crime ‘godfather’, the NCA’s assumption that his work was the source of the defendants’ wealth was found to be erroneous.
So who should be worried? The handful of cases to date show clear themes of overt and excessive spending, coupled with a clear link to a known or suspected criminal, and no sensible alternative explanation.
Those are not the qualities of most families, no matter how wealthy, and it’s fair to assume that the prosecuting authorities know that. For example, HMRC’s ‘snooper computer’ Connect system picks up a vast amount of information from car dealerships, estate agents, banks and others, and helps flag cases where spending is vastly out ofline with a person’s reported income or resources.
We can certainly expect to see more cases, but that’s not the same as saying that every person with a luxury lifestyle needs to see this as a risk.
This is not about confiscating a person’s assets, but about taking away assets that were never truly theirs. There might be plenty of reasons to lock up your Bulgari, but for most people, fear of a UWO needn’t be one of them.