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Proceeds of crime investigations

Posted on 10 January 2024

The past year has seen some noteworthy results for the SFO in relation to confiscation and civil recovery orders. In some of the cases in which the SFO was involved, the individual concerned had either fled the jurisdiction or had already paid significant amounts towards a confiscation order. The SFO's activity in this area in 2023 has reaffirmed the agency's commitment to recovering the proceeds of crime long after the prosecution and trial phase of a case has concluded. Several of the cases required the SFO to trace funds being held in a complex array of accounts and trusts, demonstrating that the SFO will not be deterred in its efforts to secure and confiscate the assets of those who have benefited from criminal conduct.

Achilleas Kallakis – Confiscation

In March, the SFO recovered a further £92,500 from Achilleas Kallakis who was one of the individuals convicted for the UK's largest ever mortgage fraud. Mr Kallakis and his co-defendant Alexander Williams were convicted and imprisoned in 2013 for their part in a scheme that enabled them to acquire a London property portfolio worth £740 million.

Mr Kallakis had donated the amount of £92,500 towards a theatre at his child's private school in 2005. When the school later removed the Kallakis name from the theatre the family took legal action against them.

The family's case against the school alerted the SFO to the existence of the donation which had been paid through a complex family trust fund. After a three-day hearing in which other parties to the trust fund declared an interest in the £92,500 the court determined that the donation represented the proceeds of Mr Kallakis' crime, and he was given 28 days to pay the amount.

In November the SFO went on to confiscate a £250,000 debenture belonging to Mr Kallakis that was held at the prestigious Queens Tennis Club in London. The SFO located the debenture by tracing the funds through a chain of offshore accounts (including the aforementioned family trust), to the £740 million fraud.

Prior to taking these steps, the SFO had previously confiscated £3.25 million from Mr Kallakis.

Mario Miranda, Petrobas – Forfeiture

In March, a court granted the SFO's application for the forfeiture of $7,699,204 held in a UK bank account that was linked to Mario Ildeu de Miranda. Mr Miranda had been convicted in Brazil in 2019 of 37 counts of money laundering in connection with a bribery scheme involving the state-owned oil company Petrobas. The money in the UK account had been transferred from Mr Miranda's Swiss bank account and moved through other banks in Switzerland, Malta, Portugal, the UAE and the Bahamas before being deposited in the UK account which was subsequently frozen by the SFO in August 2020 by virtue of an Account Freezing Order. The $7,699,204 is the largest ever amount seized by the SFO from a single bank account.

Dr Guang Jiang: Sarclad Ltd – Confiscation

In July the SFO recovered a property worth £200,000 and over £8,000 in rental profits from Dr Guang Jiang. An SFO investigation that was opened in 2013 revealed that Dr Jiang had facilitated the payment of millions of pounds worth of bribes by Sarclad to provide technology services to Chinese based steel production companies between 2004 and 2012. Dr Jiang who had been acting as Sarclad's agent in China fled the UK in 2014 in breach of his bail conditions. The SFO's continued investigation into Dr Jiang led to the discovery of a flat in Sheffield that had been transferred into the name of one of his daughters and also details of a bank account that contained the rental income for the property. The SFO had previously recovered over £350,000 from Dr Jiang's personal and company bank accounts.

Abdallah Ali Jammal: Lebanese bank – Civil Recovery proceedings

The SFO is poised to recover over £500,000 on behalf of the victims of a worldwide email fraud that was carried out by Abdallah Ali Jammal in 2002. The scheme involved unsolicited emails which were sent to victims' inboxes, falsely claiming to need their help to release considerable sums of money from countries including Nigeria, and promising a commission in return. Many victims lost tens of thousands of pounds as a result of the fraud.

The SFO determined that there is no realistic prospect of securing a conviction against Mr Jamal because he fled the UK before he could be charged.

Notwithstanding its decision not to prosecute, the SFO froze funds that were bound for a Lebanese bank that Mr Jamal's family control and which is subject to U.S. sanctions.

The SFO is working alongside the US Federal Bureau of Investigation, Australian Federal Police and European authorities to trace the stolen funds back to the accounts of the victims. The SFO has issued civil recovery proceedings in the High Court to help secure the return of the money to the victims.

Balli Steel – Confiscation

This month the SFO confiscated over £466,000 from former Balli Steel Plc. CEO Nasser Alaghband and senior executives Melis Erda. Mr Alaghband and Miss Erda were sentenced in March to over 12 years imprisonment for defrauding over 20 banks to secure loans for around half a billion dollars.

The SFO's investigation revealed that the former executives had used the funds obtained from the frauds to pay themselves large salaries and fund lavish lifestyles. Mr Alaghband and Ms Erda were given six months to pay over £100,000 and £350,000 respectively. Both will face default terms of imprisonment that will run consecutively to their original sentences if they fail to satisfy the confiscation orders.

In 2022 the SFO only had one confiscation of note and so there was a noticeable uptick in its activity in this area in 2023. Further with the SFO ramping up its activity towards the end of 2023 by announcing a number of new investigations and prosecutions it appears that there will not be any letdown in its pursuit of the proceeds of crime in the coming year.


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