U.K. Seizes Millions in Cash, Knightsbridge Properties in First Use of Dirty Money Law

(Bloomberg) — The U.K. reached a 9.8 million pound ($12.7 million) settlement in its first successful use of a controversial power designed to crack down on dirty money.

© Photographer: Dan Kitwood/Getty Images Europe
LONDON, ENGLAND – OCTOBER 07: A general view of The National Crime Agency building in Westminster on October 7, 2013 in London, England. The NCA replaces SOCA, the Serious Organised Crime Agency, which was formed in 2006. Dubbed “the British FBI”, the NCA will be tasked with tackling the most serious of crimes in the UK and replaces a number of existing bodies. (Photo by Dan Kitwood/Getty Images)

The National Crime Agency settled a so-called Unexplained Wealth Order with Mansoor “Manni” Mahmood Hussain, a Leeds businessman, the agency said Wednesday in a statement. The 40-year-old handed over more than 45 properties in London, Leeds and Cheshire, four parcels of land, and nearly 600,000 pounds in cash. The London properties include two apartments in the tony Knightsbridge neighborhood.

“This case is a milestone, demonstrating the power of Unexplained Wealth Orders, with significant implications for how we pursue illicit finance in the U.K,” Graeme Biggar, the NCA’s director general of the National Economic Crime Centre, said in a statement.

Hussain didn’t respond to several messages left with his business. The NCA accused him of using blackmail, threats of violence and ties to criminals to build his property portfolio.

The British government introduced UWOs two years ago to help stop a growing problem of criminals and dictators using the country to hide their wealth. The civil litigation tool forces people with assets of more than 50,000 pounds to prove their funds come from legitimate sources. Failure to comply with the order can allow a court to freeze the assets.

In July, a parliamentary report on Russian involvement in British politics criticized the new power. Such politically exposed persons — people who might benefit from proximity to friends and relatives in high places — can afford to fight against efforts to strip their ill-gotten assets, the lawmakers said.

While the orders appear to provide the NCA “with more clout and greater powers, the reality is that it is highly probable that the oligarchy will have the financial means to ensure their lawyers — a key group of professional enablers — find ways to circumvent this legislation,” the report said.

Earlier this year, the NCA was dealt a setback after the family of Kazakhstan’s former president overturned a freeze on the family’s 80 million-pound property portfolio. The agency has now settled the case for an undisclosed amount.

“We are just feeling our way and testing this legislation” and setbacks are “bound to happen occasionally,” Biggar told journalists.

“We will lose sometimes and there will be a cost to that but we intend to lose as rarely as possible,” he said. “We’re not going to be discouraged by the amount of money involved.”

Jonah Anderson, white collar crime lawyer at White & Case, says the breakthrough is good news after the NCA’s defeat.

“It may be that the value of the UWO is in organized crime cases rather than politically exposed persons cases,” he said by email.

(Updates with lawyer comment in last paragraph)

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