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07 October 2020

Follow the money: Unexplained Wealth Orders explained

4 mins

The National Crime Agency recently revealed that their investigation into Mansoor Mahmood Hussain and successful application for an unexplained wealth order (UWO) against properties in his vast property empire, has concluded following a settlement agreement between the NCA and Ms Hussain’s lawyers for £10 million.

Mr Hussain, a businessman from Leeds, allegedly had links to serious criminals and was suspected of involvement in money laundering.  Although he has never been convicted of a crime, his alleged involvement in serious organised crime was enough to satisfy the High Court that a UWO was necessary to establish whether his property empire had been acquired by criminal means.

What is a UWO?

Unexplained wealth orders (UWO) are a relatively recent tool in the arsenal of the prosecution.  Introduced by the Criminal Finances Act 2017 on 31 January 2018, UWOs provide agencies, such as the National Crime Agency (NCA) and Serious Fraud Office (SFO) amongst others, investigative powers which require persons subject to UWOs to provide details of how they came to be in possession of their assets.  Although UWOs do not, by themselves, allow for the recovery of assets attributable to criminal activity, in conjunction with freezing and other civil recovery action, they were introduced as an important tool for enforcement agencies targeting ‘illicit finance’.

Law enforcement agencies can apply to the High Court for a UWO against any property (of a value over £50,000), where the person who owns the property is reasonably suspected of:

  • involvement in serious crime; or
  • being connected to a person involved in serious crime; and
  • there are reasonable grounds to suspect that a person’s lawfully obtained income would be insufficient to allow that person to obtain the property subject to a UWO

The High Court must also have reasonable grounds to believe that the order would protect the public by preventing, restricting or disrupting involvement by the person in serious crime.  The standard of proof is significantly lower than that required in criminal cases.  In applications for a UWO, Judges must only be satisfied of the above on the balance of probabilities.  Therefore, UWOs can be made in cases like Mr Hussain’s who has never been convicted of any criminal offences.   

Where the High Court directs that a UWO should be made, the UWO requires a person to explain:

  • the nature and extent of their interest in a particular property; and
  • how that property was obtained

Applications for UWOs will frequently be accompanied by freezing orders and a requirement that the person subject to the order responds within a certain amount of time. 

How to respond to a UWO

Responding to a UWO requires careful thought and preparation.  When responding to the NCA, Mr Hussain provided 127 lever arch folders and a 76-page statement explaining where his money came from.  Inadvertently, he provided the NCA investigators clues which resulted in a bigger case being made against him. 

It is clear that careful and considered legal advice is crucial for any person targeted with a UWO, particularly as the consequences for responding carelessly can be harsh.  Failure to respond may give rise to a presumption that the property is recoverable under subsequent civil recovery action under Part 5 Proceeds of Crime Act 2002 and a person commits an offence, imprisonable for up to two years, if they make a statement that they know to be false or misleading in a material way or if they are reckless in making such a statement when responding to a requirement under a UWO.  Evidence obtained through the UWO may potentially be used for any criminal investigation

Historically, UWOs have not been the most utilised of tools available to investigative agencies such as the NCA or SFO and they have had a fairly bumpy ride since their inception.  However, in light of the NCA’s success in settling their investigation into Mr Hussain, a highly unusual step in itself, perhaps the case of Mr Hussain will lead to further UWOs being pursued against other individuals who, like Mr Hussain, have not been charged with any criminal offence but lead a lavish lifestyle which they find hard to explain.

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