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UK’s first Unexplained Wealth Order maintained

Service Area: Fraud, Criminal and Regulatory

The woman in receipt of the UK’s first Unexplained Wealth Order (UWO) in 2018 has lost her battle in the Supreme Court to have the ruling overturned.

Zamira Hajiyeva, the wife of a jailed Azerbaijani banker, may now lose her £12 million London home and other assets if she is unable to explain where the money came from to buy them.

Mrs Hajiyeva, who spent £1 million a year at Harrods, using up to 35 different credit cards and even spending £600,000 in a single day, will be forced to give up her home, as well as an £11 million golf course in Berkshire unless she can explain the source of the cash used to buy her house, which was purchased by a company incorporated in the British Virgin Islands in 2009.

Mrs Hajiyeva became the first person to be subject to a UWO, just weeks after the power was brought in under so-called “McMafia” laws in 2018.

The Order allows a person’s assets to be seized if the owner is from outside the European Economic Area and cannot explain the source of their wealth. UWOs came in with the Criminal Finances Act, which introduced new measures to tackle money laundering and other financial crimes.

As with any investigation into suspected financial criminal activity, the investigators follow the money to find out where it originated.

Buying property and other assets with ill-gotten gains is a favoured activity for criminals but UWOs can help to investigate the source of the funds by placing pressure on parties to reveal their income.

Roger Isaacs, Forensic Partner at Milsted Langdon, said: “It is perhaps unsurprising that the Supreme Court has upheld the rulings of the lower courts and the fact that it has done so is likely to encourage further use of UWO’s by the prosecuting authorities.

For centuries English Law relied on the principle that innocence was presumed unless guiled was proved.  However, UWO’s like a number of related anti-money laundering provisions reverse the burden of proof.  That was why it fell to Mrs Hajiyeva to prove that she had acquired her wealth legitimately rather than the prosecuting authority having to prove that she had acquired it illegitimately.

In many cases, it is impossible to tell for certain what was the ultimate source of an individual’s wealth not least because those who engage in criminal conduct tend not to give their customers invoices or receipts.  Before the advent of UWO’s successful prosecutions were therefore almost impossible because it was very difficult to prove that wealth came from illegal activity.  Now that the burden of proof has been reversed, it is the alleged criminals who now face the challenge of demonstrating that the source of their wealth was legitimate.

Whether they act for the defence or prosecution, forensic accountants play a key role in tracing funds so that their source can be identified as legitimate or otherwise.”

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