Unexplained wealth orders, touted as a tool for seizing high-end London real estate from overseas kleptocrats, may soon be put to use against midlevel drug dealers and other criminals fueling violence in the U.K. capital, a senior investigator told ACAMS moneylaundering.com.
UWOs, which place the burden on suspected criminals and politically connected individuals from outside the EU to demonstrate that their property, funds and other assets targeted for seizure by U.K. authorities derive from legitimate sources, have been in force for two years but to date have only been used in four cases, each brought by the U.K. National Crime Agency.
Details of the first UWOs obtained emerged in 2018, when the High Court in London dismissed a challenge to prevent the seizure of two U.K. residences worth a combined £22 million from the wife of a foreign banker jailed for fraud and embezzlement. The case enhanced the measure’s reputation for halting the flow of corrupt overseas wealth into the U.K. property market.
But according to Detective Chief Superintendent Mick Gallagher, head of the London Metropolitan Police’s Central Specialist Crime Command, the measure may prove useful against lower level criminals and help the force reduce violent crime in the capital, where fatal stabbings and other homicides reached a 10-year high of 149 in 2019.
The Metropolitan Police, or Met, is seeking to employ UWOs in roughly 20 investigations against drug traffickers and other criminals amid public concern that violence tied to illicit narcotics has spiraled out of control, Gallagher told moneylaundering.com, adding that two of the cases could advance to trial within months.
“There’s a very real space for looking at unexplained wealth at a low level, around drug dealers and people driving the violence on our streets,” he said.
Under the Criminal Finances Act 2017, the NCA, the Financial Conduct Authority, HM Revenue and Customs, Serious Fraud Office and Crown Prosecution Service can seek a UWO against any property of more than £50,000 if they have “reasonable grounds to suspect” a respondent’s “known lawfully obtained income” would not suffice to acquire the asset in question.
Regional police forces such as the Met must refer potential UWO cases to the CPS and show evidence that the individuals connected to the asset are involved in serious crimes.
“What we’re trying to influence going forward is a lower-level threshold use so we can target individuals that our communities see on the streets—people who seem to be doing well out of criminality,” Gallagher said.
Only the Met and one other regional police force routinely query data from suspicious activity reports to advance investigations into knife-crime suspects, an official with the U.K. financial intelligence unit told moneylaundering.com on condition of anonymity.
At least 90 of the 149 homicides recorded in London last year involved stabbings.
Andy McDonald, former head of the Met’s anti-fraud unit, told moneylaundering.com that the Central Specialist Crime Command, which tackles modern slavery, drug trafficking and a range of other serious crimes and employs dozens of experienced financial investigators, is well-placed to make good use of UWOs.
Moreover, most lower-level criminals lack access to the same caliber of legal representation available to wealthy foreign politicos, making them more likely to cede the property rather than opt for a protracted court battle, he said.
“They were always properly configured for kleptocrats and very significant money laundering,” said McDonald, now an independent consultant in London. “But if there’s a wider capability for use by appropriately trained investigators, [the power] will be tested far more frequently, and they’d make far more routine gains from it than the odd £60 million from a kleptocrat.”
The Met recorded its highest-ever recovery of criminal assets to date last year, seizing £101 million after seizing £94 million in 2018.
Met investigators also restrained a record £58 million in U.K. banks last year through account freezing orders, a power also introduced under the Criminal Finances Act.
“For us, it’s been a brilliant bit of legislation,” Gallagher said.
Contact Koos Couvée at email@example.com
|Topics :||Anti-money laundering|
|Source:||United Kingdom: National Crime Agency , United Kingdom|
|Document Date:||January 6, 2020|