written on behalf of Feigenbaum Law
An Azerbajani woman recently became the first person targeted by a British procedure intended to seize money from individuals suspected of obtaining their wealth via corruption. The woman came under scrutiny after purchasing high-end properties in and around London, and spending $21 million USD over the course of a decade of shopping at luxury U.K. department store Harrods.
Unexplained Wealth Orders
The woman is the subject of two “unexplained wealth orders” (UWO) issued by the U.K. National Crime Agency (NCA).
Issuing such orders is a new power granted to U.K. law enforcement agencies earlier this year as a means of tackling suspected corruption.
A UWO requires an individual who has been reasonably suspected of involvement in serious crime, or of being connected to a person who is involved in serious crime, to explain how particular property was obtained where it seems that their known lawfully obtained income would be insufficient to allow them to obtain the property.
Donald Toon, director for economic crime at the NCA noted that UWO’s will be used to target the issue of money laundering via London’s expensive real estate market.
Woman’s Husband Sentenced for Fraud & Embezzlement
The woman’s husband was formerly the chairman of the state-controlled International Bank of Azerbaijan between 2001 and 2015. Following his resignation in 2015 he was subsequently sentenced to 15 years in prison for fraud and embezzlement.
The Woman’s Court Battles So Far
Earlier this year, the woman filed motions requesting that the UWO be thrown out and her anonymity be maintained. She denies any wrongdoing.
The British High Court recently dismissed the woman’s attempt to maintain her anonymity (she was previously only named as “Mrs. A”) and her name has been publicly revealed.
The court has now also ordered the woman to explain how she acquired the money to make such extravagant purchases in addition to the purchase of a $15 million USD home in the exclusive London neighbourhood of Knightsbridge, close to the department store as well as a golf course outside of London.
If she cannot, or is unwilling to, explain how she was able to purchase these properties, the woman may lose them.
The woman’s lawyers issued a statement noting that the issuance of a UWO “does not and should not be taken to imply any wrongdoing, whether on her part or that of her husband”, further noting that the orders are “part of an investigative process, not a criminal procedure, and it does not involve the finding of any criminal offence.”
Response to UWO’s Thus Far
Transparency International UK, an anticorruption group, told CNN that they welcome the latest developments, noting:
We are delighted that this first case is progressing in court, underlining the effectiveness of unexplained wealth orders in targeting suspicious wealth…UWOs should now be used more widely to pursue more of the £4.4 billion worth of suspicious wealth we have identified across the UK.
The group is also calling for retailers and other who provide luxury goods and services to file reports of suspicious activity with the police.
We will continue to follow developments in this interesting matter and will provide updates as they become available. As we previously blogged about, the U.K. government has been taking measures to track offshore money. This appears to be another measure to trace where large sums of money may be coming from.
If you have questions about how any of these changes may affect you, contact Mark Feigenbaum at Feigenbaum Law. We regularly assist high net-worth individuals with ensuring they are meeting their obligations vis-à-vis taxes in various jurisdictions and with complex personal and corporate tax planning. Where needed we represent clients in tax litigation. We have an expertise in navigating the complexities of the U.S., Canadian, and other tax systems and receive complex referral cases. We provide discreet, timely, and professional results for clients facing challenging or complex situations. Contact us at email@example.com, or call us at (905) 695-1269 or toll free at (877) 275-4792 to learn more about how we can help.