The National Crime Agency (NCA) has announced the first civil recovery order (CRO) against property subject to an Unexplained Wealth Order (UWO), following a settlement agreement with the owner of the property, Mansoor Mahmood Hussain. This is the first time the NCA has recovered sums arising out of an UWO since those powers were made available to them almost three years ago and the process raises questions about the operation of those powers going forward.
Investigation and settlement
The NCA obtained an UWO against Mr Hussain in respect of eight properties in July 2019 on the basis that he was involved in serious criminality, in connection with organised crime gangs. Pursuant to the UWO, Mr Hussain, who represented himself throughout the proceedings, submitted 127 lever arch folders and a 76-page statement in an attempt to comply with the terms of the UWO by explaining the source of funds used to obtain the properties subject to the UWO.
The NCA did not accept Mr Hussain's explanation and argued that it represented non-compliance with the UWO, thereby triggering a rebuttable presumption that the properties were recoverable for the purposes of civil recovery proceedings. Further, the information submitted by Mr Hussain in purported compliance with the UWO apparently enabled the NCA to identify further potentially recoverable properties.
On 24 August 2020, the NCA agreed a settlement with Mr Hussain whereby property with a combined value of £9,802,828 was to be forfeited, and the High Court sealed the CRO on 2 October 2020. It is understood from media reporting that, as part of the settlement, Mr Hussain was permitted to retain four mortgaged properties and an unspecified amount of cash held in a bank account that was not part of the original investigation.
Questions raised
The use of a negotiated settlement to conclude enforcement proceedings is permissible in civil recovery proceedings, but it does raise questions as to why substantive criminal proceedings were not pursued via the CPS. This is particularly so in the context of the NCA's allegations in earlier proceedings that Mr Hussain was "standing at the centre of a network of organised crime as a designated 'cleanskin'…who enables those operating the criminal activities of the organised crime gangs with which he is connected by providing a money-laundering service." The media has reported that the NCA has stated that there was insufficient evidence to prosecute Mr Hussain.
In addition to not having to make a case against Mr Hussain to the required criminal standard of proof, the NCA will also benefit from this settlement, retaining half of the recovered amount under the Home Office Asset Recovery Incentivisation Scheme. The scheme has been criticised in the past due to the potential for conflict of interest where having a financial interest in the outcome of any case may impact the objectivity of an enforcement agency. The scheme is currently under review as part of the Government's three year Economic Crime Plan with a particular focus on whether recovered funds should, instead, be ringfenced by the Home Office for economic crime projects.
The NCA has sought to explain that the settlement "not only meets our operational goals, but frees up our investigators and legal team to pursue other cases." However, the UWO scheme remains a new piece of legislation which provides enforcement bodies with intrusive powers and the concepts that animate the scheme are still being defined by the courts (including what represents purported and non-compliance for the purpose of a UWO, which appear to have been key issues in this case). Although there may be circumstances where settlement is the correct resolution, it should not become the default position in these matters, particularly when the NCA (or another relevant enforcement body) may have a financial interest of their own in the outcome – going forward, it is important that the NCA is not able to set the rules of engagement and develop the operation of these very significant powers without rigorous judicial scrutiny.