On 17 January, the Serious Fraud Office (SFO) secured its first Unexplained Wealth Order (UWO) in relation to 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 former wife of convicted solicitor Timothy Schools, who was sentenced in 2022 to 14 years’ imprisonment for fraud. The order requires Ms Schools to provide information within 28 days explaining how she acquired the property. Whilst she remains entitled to sell the property, she is prohibited from transferring or otherwise using the proceeds of any sale.
Given the rarity of UWOs (only 11 have been obtained since the power was introduced in 2017), it is interesting that the SFO has, finally, decided to seek a UWO rather than relying on the more traditional tools of pre-conviction restraint and post-conviction confiscation. However, the circumstances of this case suggest it should not necessarily be viewed as signalling a significant policy shift. Ms Schools was unrepresented and the value of the property is relatively modest compared with other potential UWO targets. It therefore remains to be seen whether the SFO will have the appetite to pursue larger and more heavily defended cases.
Unexplained Wealth Orders were introduced to strengthen the Proceeds of Crime regime and tackle illicit finance by extending the powers of law enforcement agencies to disrupt offending and seize assets suspected of representing the proceeds of crime. Originally unveiled as a key weapon against the wealth of corrupt overseas politicians and the assets of oligarchs (see our previous blogs), UWOs have, in practice, been used only sparingly. This is due in part to the National Crime Agency’s early, high-profile and costly defeat, although even following the introduction of the agency-friendly cap on potential costs under the Economic Crime (Transparency and Enforcement) Act 2022, the number of UWOs sought has remained low.
In practice, UWOs can be sought in relation to any asset worth more than £50,000 where there are reasonable grounds to suspect that it represents the proceeds of crime. Accountants, tax advisers and private wealth managers therefore need to understand how UWOs operate and why their clients, whether innocent or otherwise, may find themselves affected. Given the broad range of individuals who may be targeted, the reverse burden of proof that applies and the increasing pressure on UK authorities to tackle suspected dirty money, many people could find themselves having to justify the legitimacy of 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 Smyth represents individuals and corporates across the full spectrum of criminal and quasi-criminal matters.
