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divorceyourring · 6 years ago

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Wife may lose property after husband convicted of fraud

In the first case of its kind, a wife has failed to have an “Unexplained Wealth Order” (‘UWO”) discharged.

OK, I realise that that may not mean much to many readers (it would not have meant much to me before I read up for this post), so a little explanation is required.

The story begins with the little known (well, to me at least) Criminal Finances Act 2017. That Act inserted into the Proceeds of Crime Act 2002 a provision empowering the High Court to make a UWO in respect of any property worth more than £50,000 if (amongst other things) it is satisfied that there are reasonable grounds for suspecting that the known sources of the owner’s lawfully obtained income would have been insufficient for the purposes of enabling them to obtain the property, and the owner, or anyone connected to them, is suspected of being involved in serious crime. The provision came into force on the 31st of January this year.

The effect of a UWO is to require the property owner to explain how they obtained the property. The court making the UWO can also make a freezing order, preventing the owner from dealing with the property.

If the owner does not comply with the UWO within a specified time limit or if they do not give a satisfactory explanation as to how they obtained the property, then the property could ultimately be seized.

The very first UWO was made against Mrs Zamira Hajiyeva, a foreign national, on the 27th of February, on the application of the National Crime Agency (‘NCA’), and in respect of a property purchased in 2009 for £11.5 million, via a company in the British Virgin Islands. The property is now apparently worth £22 million.

Briefly, the circumstances surrounding the application for the UWO were as follows. In 2015 Mrs Hajiyeva applied for indefinite leave to remain in the UK. In her application she informed the Home Office that she was the owner of the Virgin Islands company. However, the Virgin Islands Financial Investigation Agency informed the NCA that the owner of the company was her husband, Mr Hajiyev. In December 2015 Mr Hajiyev was arrested in his home country and charged with various offences including misappropriation, abuse of office, large-scale fraud and embezzlement in connection with a bank of which he was the chairman. In 2016 he was convicted and sentenced to 15 years’ imprisonment. In addition he was ordered to pay the bank a sum of approximately $39 million.

There was also evidence that Mrs Hajiyeva spent some £16 million at Harrods over a ten year period, using credit cards that had been issued by the husband’s bank.

Mrs Hajiyeva applied to the court to have the UWA discharged. The application was heard in the High Court by Mr Justice Supperstone. I will not go into the technical details of the grounds of the application (this is, after all, a family law blog, not a criminal law blog!), but suffice to say that Mr Justice Supperstone found that none of the grounds advanced for discharging the UWO were made out. Accordingly, the application was dismissed.

Responding to the judgment Donald Toon, the NCA Director for Economic Crime, commented:

“I am very pleased that the court dismissed the respondent’s arguments. This demonstrates that the NCA is absolutely right to ask probing questions about the funds used to purchase prime property. We will continue with this case and seek to quickly move others to the High Court. We are determined to use the powers available to us to their fullest extent where we have concerns that we cannot determine legitimate sources of wealth.”

It will be interesting to find out whether the wife does, indeed, lose the property. Whatever, the case will surely act as a warning to anyone whose spouse has been involved in serious crime: not only will they will not be able to hold on to assets acquired using the proceeds of that crime, they may not be able to hold on to assets if they cannot provide a satisfactory explanation as to how they obtained them.

You can read the full judgment of Mr Justice Supperstone here. Warning: as indicated above, the judgment goes into the technical details of UWAs, which the reader may find difficult to follow (I know I did!).

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