'Extraordinary' spending suggests illicit income, UK police say in wealth order challenge

13 August 2018 7:55am

26 July 2018. By Ben Lucas.

A woman served with UK court orders probing her wealth had such lavish spending habits that it was highly likely to have come from illicit sources, a police agency told a London court today.

The National Crime Agency secured the "unexplained wealth orders" from the High Court in February to make the woman prove that funds used to buy two properties in southeast England for 22 million pounds ($29 million) were legitimate.

Unexplained wealth orders, or UWOs, are UK investigatory tools that came into force on Jan. 31 this year. They can be used to force non-European individuals, who are in the UK or linked to it, to show that assets they own and that are deemed suspicious were acquired with lawful funds.

The High Court today heard a third day of arguments in the NCA’s continued defense against attempts by the woman — known only as Mrs A due to reporting restrictions — to have the orders discharged.

The case is being closely watched in UK crime-fighting and legal circles as the orders in question are the first to be granted under the new UWO regime, and no judicial precedent exists as to how they might be successfully fought.

The NCA believes the two properties are ultimately linked to her husband, known as Mr A, whom it argues is a politically exposed person, or PEP — an individual with a prominent position in public life considered to present a higher risk of being involved in corruption. UWOs can be sought against individuals either suspected of involvement in serious crime or who are PEPs from outside the European Economic Area.

Jonathan Hall, representing the NCA, told the court yesterday that Mrs A spent 16 million pounds over a decade at high-end London store Harrods, 6 million pounds of which was made on credit cards belonging to the bank where her husband worked.

Mr A is currently in prison after being convicted of fraud in a non-European Economic Area country that has also not been identified for legal reasons.

Today Hall gave further details, explaining how on Nov. 25, 2012, Mrs A spent more than 150,000 pounds on Boucheron jewelry. The next day she spent 1,800 pounds on “wines and spirits,” he said.

This “extraordinary” expenditure, Hall said, was “strongly indicative” that the money was “not from a legitimate source, but an illegitimate source.”

Hall also told the court how a company linked to Mr A bought a $42 million private jet on finance during the period under scrutiny. “Even to obtain the finance would require assets and income far in excess of his income as a bank official,” said Hall.

James Lewis, representing Mrs A, called comments about her spending “prejudiced,” adding that it didn’t show any criminality. “All the spending shows is that she had significant money available to her. How she spent it is irrelevant,” he said.

— No risk of self-incrimination —

Lewis had yesterday argued that if she were forced to answer NCA questions about the properties under scrutiny there would be a real risk that she could incriminate herself and Mr A. Both are now subject to further proceedings in the country where Mr A is jailed, Lewis added.

But Hall today countered that there would be no risk as the rules on UWOs state that any evidence disclosed to the NCA couldn’t be used as evidence against them in a criminal case.

Hall said that if individuals subject to an order were permitted to invoke a right to not answer questions it would “utterly frustrate” the new regime.

Toward the end of today’s hearing, Judge Michael Supperstone said the definition of a PEP was possibly “the most important” point in this case, and stressed the novelty of proceedings around the UWO regime. “This is new legislation,” he said. “It’s difficult.”

The judge said he expected to issue a ruling in September.

Damage Limitation: Trucks & Cartel Claims