On 17 January, the Serious Fraud Office (SFO) secured its first Unexplained Wealth Order, in respect of a property believed to have been purchased with the proceeds of a £100 million fraud.
The SFO reported that the property, valued at around £1.5 million, is owned by Claire Schools, the ex-wife of convicted solicitor Timothy Schools, who was sentenced in 2022 to 14 years in prison for fraud. The order obliges Ms Schools to produce information within 28 days about how she acquired the property, and while she is still entitled to sell the property she is prohibited from transferring or otherwise using the proceeds of such sale.
Given the rarity of UWOs (only 11 have been obtained since the measure was introduced in 2017), it is interesting that the SFO has – finally – decided to exercise its entitlement to seek a UWO rather than to rely on the more traditional tools of restraint pre-conviction and confiscation post-conviction. However, the particulars of this case mean that one should not assume that it heralds a significant policy shift. Ms Schools was unrepresented and the value of the property is relatively low (in the context of other targets of UWOs), so it remains to be seen whether the SFO will have the appetite to go after bigger fish where it may face better-resourced opposition.
Unexplained Wealth Orders (UWOs) were introduced to bolster the Proceeds of Crime regime and “tackle illicit finance” by extending the powers of law enforcement agencies to disrupt offending and to seize assets suspected of representing criminal property. Unveiled with a fanfare as a vital new weapon to target the wealth of corrupt overseas politicians and the properties of oligarchs [see our previous blogs], in fact UWOs have not been widely adopted. In part, surely, because of an early high-profile – and expensive – defeat for the NCA, although even since the agency-friendly cap on potential costs in 2022 (under The Economic Crime (Transparency and Enforcement) Act 2022), the number of UWOs sought has remained small.
In practice UWOs can be applied to any asset over £50,000 where there are reasonable grounds for suspecting dirty money is involved. Accountants, tax advisers and private wealth managers therefore need to understand how UWOs work and why their clients, innocent or otherwise, might be at risk. The wide range of parties that can be targeted by UWOs, the reverse burden of proof that applies and the pressure on UK authorities to be seen to do more to stamp out suspected dirty money, means that many people may find themselves fighting to retain their assets.
Further information
If you have any questions regarding this blog, please contact Ed Smyth in our Criminal team. For more information, visit our Unexplained Wealth Orders page.
About the author
Ed represents individuals and corporates across the full spectrum of criminal and quasi-criminal matters.
