Recently, the Serious Fraud Office (“SFO”) sought an Unexplained Wealth Order (“UWO”) for the first time. UWOs are seen as a way of rooting out “dirty money” flowing into the country.
Nick Ephgrave, the director of the SFO, has described this case as a “milestone” for the agency. Phillippa Ellis and Ellie Stephens will deal with the rise of the SFO and why it must be considered a force to be reckoned with for the future.
Summary
The SFO has secured its first UWO, as it seeks to recover a Lake District property, which is believed to have been purchased with the proceeds of a £100m fraud. Valued at an estimated £1.5m and is owned by Claire Schools, the ex-wife of the convicted solicitor Timothy Schools, who was sentenced to 14 years in prison in 2022.
Claire Schools represented herself at a hearing in the Royal Courts of Justice and said she was already trying to sell the property to repay creditors, even though rental income from the house is her only source of income.
The order was successfully secured at the High Court on 17 January 2025, which ensured that if the property was to be sold, the proceeds would be secured. Ms Schools has also been ordered to provide information about how the property was obtained within 28 days. This information might enable the SFO to bring a case to seize the house at a later date. The order follows the confiscation of a further £1m from Schools in a hearing at Southwark Crown Court earlier this month.
Since being introduced by parliament in 2017, this is the first UWO used by the SFO, making the SFO the second law enforcement authority to ever use the tool.
Additionally, it is one of the first instances of a UWO being granted post-conviction and after a defendant has been ordered to repay the victims of their crime under the Proceeds of Crime Act 2002. The SFO can also glean evidence by issuing formal demands under section 2 of the Criminal Justice Act 1987.
Nick Ephgrave QPM, Director of the SFO said: “This is a milestone case for the SFO and follows on from last week’s successful £1 million recovery to go back to the victims in this case. Wherever criminal assets have been hidden or dispersed, we will progress our investigations with determination and explore new methods to recover funds for victims and the public purse.”
UWOs
A UWO is an investigative tool, that assists in determining if the source of funding for an asset and if there are reasonable suspicion that it was acquired with the proceeds of crime. If the recipient fails to prove that the asset was acquired legitimately, the SFO can apply to seize it at the High Court.
The key facts highlighted on the gov.uk website are as follows:
- Serious and organised crimes, such as, corruption, money laundering, ransomware attacks and terrorism-financing, are estimated to cost the UK economy £37 billion per year.
- The Proceeds of Crime Act 2002 provides statutory framework and broad powers to trace, investigate and recover illicit finance gained through unlawful conduct. Overall, just under £1.3 billion has been recovered from criminals using these powers, curtailing corrupt individuals’ ability to further criminality.
- The Financial Action Task Force found that the UK has one of the strongest systems in the world for combatting money laundering.
- UWOs have been granted in 4 cases since their introduction in relation to assets with a combined value of £143 million.
UWOs have a history of being difficult to obtain, however, the SFO is using the tools at its disposal to good effect. The SFO is a force to be reckoned with, which can only continue to strive for success, further to its five-year strategy where they plan to specialise, collaborate and innovate to lead the fight against serious fraud, bribery and corruption.
How can we help
Our specialist Business Crime & Investigation team can assist you in preparing for these changes and minimise the risk of non-compliance. Get in touch with our team of expert lawyers for bespoke advice.
