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Rapid Response Team: 0800 559 3500
Switchboard: +44 (0)203 947 1539
Rapid Response Team: 0800 559 3500
Switchboard: +44 (0)203 947 1539

Legal Director Syed Rahman discusses with Risk UK why the NCA’s largest asset recovery emphasises the value of account freezing orders to investigators.

Author: Syedur Rahman  17 December 2019
2 min read

The National Crime Agency (NCA) was no doubt happy to announce it had reached an out-of-court settlement with billionaire property tycoon and philanthropist Malik Riaz Hussain that sees him handing over a £50M house overlooking Hyde Park and £140M that is held in frozen accounts.

It is the NCA’s largest asset recovery and, as it is a settlement, there is no finding of guilt against Hussain or his relatives; although the surrendering of assets does at least indicate that they felt they could not defend the allegations.

Hussain’s firm had been the subject of investigations into corruption and land-grabbing and the settlement will see the £190M passed to the government of Pakistan, which has welcomed the outcome.

The reasons for the NCA’s contentment with the settlement appear fairly clear. But why was Hussain prepared to settle? Arguably because of three little words…account freezing orders.

In August 2019, eight account freezing orders were secured by the NCA at Westminster Magistrates’ Court in connection with funds totalling around £120 million. These followed an account freezing order in December 2018 for £20 million. All of the account freezing orders related to Hussain’s money held in UK bank accounts and were obtained on the grounds that the money may have been acquired illegally. Faced with such a situation, it could be argued that Hussain had little room for manoeuvre in this case. That, as far as enforcement agencies are concerned, is the beauty of account freezing orders.

Account freezing orders give enforcement agencies the means to target the assets of a corporate or individual without having to establish guilt. Introduced under Section 16 of the Criminal Finances Act 2017 (CFA), they enable the contents of bank and building society accounts to be frozen so that they can be forfeited in exactly the same way as cash can be. For the authorities, the account freezing order is perfect. In a world where those suspected of criminal activity are less and less likely to carry their wealth as cash, an account freezing order enables wealth in accounts to be targeted effectively and efficiently. Any account with a balance of £1,000 or more can be the subject of an account freezing order – a low threshold that makes such an order a very versatile tool for investigators.

If investigators have reasonable grounds to suspect that money held in an account is either property obtained through unlawful conduct or intended by any person for use in unlawful conduct they can apply to magistrates for an order. An application for one can be made without notice - meaning the subject of one will not know about it until it has been granted. This arguably gives the authorities a head start over those they investigate. But they can be successfully challenged: there is a whole process and machinery in place for the target of such an order to have their day in court and argue their case.

It is hardly surprising that such orders are becoming increasingly popular with the powers that be – or that Hussain felt compelled to reach a settlement with the NCA. It is worth noting that when it comes to the settlement there is no reference to the allegations against Hussain in respect of the recovery. He can take consolation in that.

The use of account freezing orders is hugely advantageous for enforcement agencies, as this case has shown. But as Hussain walks away with no guilt attached to him, it could also be said that account freezing orders give scope for those investigated to respond appropriately, make strong representations and negotiate intelligently in order to secure an outcome that suits them.

While the £50M property in this case could only be seized via civil recovery powers that were introduced under the Proceeds of Crime Act 2002, this case shows that the CFA is certainly starting to bite. The CFA introduced both account freezing orders and unexplained wealth orders – which have attracted their own media coverage – and these are now part of an increasing number of cases

This article originally featured on Risk UK.

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Syedur Rahman is known for his in-depth experience of serious fraud, white-collar crime and serious crime cases, as well as his expertise in worldwide asset tracing and recovery, international arbitration, civil recovery, cryptocurrency and high-stakes commercial disputes.

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