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Proving the provenance of assets

Service Area: Fraud

Member: Roger Isaacs

A family from the South West has had an £8.1 million property portfolio seized by the National Crime Agency (NCA) after a civil recovery and tax investigation.

Although the Davies family has not been convicted of any crime, they were unable to prove the provenance of the seized assets, which the NCA insist were acquired through mortgage fraud and the sale of controlled drugs.

According to the NCA’s investigation, the portfolio was acquired between 1998 and 2007 and, in 2009 alone, investigators claim it generated rental and commercial income of more than £2 million.

This is unsurprising, as most of the property was rented out and, as well as a villa in Tenerife, the portfolio included a seven-bedroom converted barn and mill complete with indoor swimming pool, jacuzzi and five bathrooms, an 18th Century Georgian townhouse in Bath and the former Midford telephone repeater station.

As one of the investigators commented, such obvious trappings of wealth, with no reasonable explanation for the means to acquire them, will raise red flags to any investigation.

Once flags are raised, the investigators will look at deeds of sale, bank statements and the general activities of the alleged criminals to ascertain where the money is coming from to make such purchases.

They may discover that there is a reasonable explanation for such wealth. However, in this case, once captured in the investigative spotlight, the family agreed to surrender the assets, having conceded that they were acquired using the proceeds of unlawful conduct.

Roger Isaacs, Forensic Partner at Milsted Langdon, said: “It is interesting to see that the National Crime Agency is using civil powers to confiscate assets from those suspected of fraud who have never been convicted.

“This shift in approach could mean that the skills and expertise of forensic accountants could be called on more regularly by authorities to investigate such cases.”

Author: Roger Isaacs
8 November 2019