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Rise of the Unexplained Wealth Order

Service Area: Criminal and Regulatory

Member: Roger Isaacs

The Financial Times (FT) has explained how the National Crime Agency (NCA) is using an Unexplained Wealth Order (UWO) to investigate a woman suspected of having links to paramilitary organisations and a separate piece on the potential use of UWOs to tackle “domestic” organised crime.

UWOs were introduced by the Government last year in a bid to stem the tide of ‘dirty money’ flowing through the UK.

The Orders allow the NCA to ask anyone with assets worth more than £50,000 to explain how they came to possess them if their income appears to be insufficient.

According to the FT, the NCA has secured the UK’s latest UWO against a Northern Irish woman who financed the purchase of six properties, some in Northern Ireland, some in London, using money of unclear provenance.

As well as the UWO, interim freezing orders have been placed on the six properties she owns, blocking her from selling them until the end of the investigation.

In the second example covered by the newspaper, a UWO was granted in respect of properties linked to a businessman from the North of England, who is the recipient of the NCA’s first domestic UWO.

The link that connects UWOs, which invariably involve eye-watering sums of money, and ‘normal’ financial investigations, is doubt surrounding the provenance of assets owned by an individual or group.

In a business situation, if the books don’t balance and there is a member of staff who is suddenly living the high life, questions arise regarding their source of income.

In both cases, a forensic investigator can usually discover where the money came from to purchase expensive clothes, holidays or properties.

Roger Isaacs, a Forensic Partner at Milsted Langdon, said: “A UWO is an effective tool for the NCA in combatting money laundering, fraud, the financing of terror groups and other serious financial crimes.

“However, to be used effectively it is down to forensic investigators to look into the finances of an individual or group and make a clear case for a UWO to be issued.

“Forensic accountants are playing an ever-greater role in the justice system, while also supporting businesses with their concerns about financial impropriety.”

Author: Roger Isaacs 2 August 2019