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World

October 4, 2018
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London High Court dismisses 'unexplained wealth' challenge

World

Thu, Oct, 18

LONDON: A legal challenge lodged at the High Court of Justice by the wife of a former banker from a non-European Economic Area (EEA) accused of fraud in a foreign country has been dismissed which means the woman, whose identity will remain anonymous till Wednesday, must disclose how she could afford £22 million in UK real estate.

The News was present in the court when Justice Michael Supperstone read out the judgment and discharged anonymity of the woman (Mrs A) and her banker husband (Mr A) but announced that the identity of the defendants shall not be reported for a week, subject to right of the defendants to appeal against his decision. This is the UK’s first ever Unexplained Wealth Order (UWO) case which means the banker’s wife from a non-EEA country must now explain to the National Crime Agency (NCA) how she was able to afford £22 million worth of UK property.

The NCA earlier this year froze her properties and if the woman fails to respond how she was able to buy these properties than her properties will be confiscated through civil proceedings.

The ruling by Justice Supperstone is seen as a landmark development that may prove to be a turning point in the UK’s fight against dirty money. The judge said that the woman and her husband were politically exposed persons (PEPs) and defined PEPs as those entrusted with prominent public functions, such as heads of state, government and military officials, and heads of government-owned entities. The husband of the woman headed a state-controlled bank in a foreign country and then shifted money to the UK to buy properties.

“This [ruling] demonstrates that the NCA is absolutely right to ask probing questions about the funds used to purchase prime property,” said Donald Toon, NCA’s director for economic crime.

The woman, identified as Mrs. A, claimed in an immigration application in 2015 to own a property in Central London that was purchased for £11.5 million in 2009 and at that time her husband was the chairman of the largest bank in a non-EEA country – the job was from 2001 to 2015. The banker was charged by authorities of that country for alleged embezzlement and large-scale fraud and sentenced in 2016 to 15 years imprisonment and ordered to pay the bank around $39 million.

Justice Michael Supperstone concluded that Mr. A is a politically exposed person who was entrusted with “public functions” as the chairman the bank, and that his wife also falls in the same category.

The NCA had argued before the judge that Mr. A was employed by the state and on his income alone couldn’t afford the London property which was paid for with a £4.05 million deposit in 2009, and the remainder £7.45 million mortgage liquidated in five years.

In her testimony, Mr A said that her husband was extremely rich when they married in 1997 but didn’t provide evidence to back those assertions.

The court heard how Mrs A spent £16million in Harrods on shopping.

Her lawyers said that a fraud conviction against her husband in his home country was unjust. It’s the case of the NCA that the woman bought two properties using money embezzled by her husband when he was a government official.

The NCA, which considers that the source of the funds to purchase the properties is unexplained, has the power to seize assets if officials believe the owner is a politically exposed person (PEP) - someone from outside the European Economic Area in a position of power that makes them liable to bribery or corruption - or someone with suspected links to serious or organised crime, and they are unable explain the source of their wealth.

Mrs A had argued that her husband is not a PEP, but the judge ruled against her and declared that both of them were PEPs. The judge noted that the woman enjoyed rides on private jets and even spent £150,000 on jewelry in one day and Harrods issued her three separate loyalty cards and she spent more than £16 million between September 2006 and June 2016 in the store.

The judge concluded that "identification of Mrs A and her husband, the non-EEA country involved and the state-owned enterprise that employed him are all matters of very real public interest".

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