Another Friday Newsround for you. Starting with:
£10 million property empire claimed under ‘Unexplained Wealth Order’
There have been several reports in the press about the property empire owned by Leeds businessman Mansoor ‘Manni’ Mahmood Hussain being claimed by the National Crime Agency under the new ‘Unexplained Wealth Order’ (UWO) process.
What are Unexplained Wealth Orders?
UWO’s are a new tool in the fight against crime introduced by the Criminal Finances Act 2017.
They can be obtained by a number of different law enforcement agencies and require individuals who are suspected of being involved in or associated with, serious crime, to explain how they obtained property or assets worth over £50,000. UWO’s are usually accompanied by an order freezing the said assets.
In this case, the order was obtained, along with the freezing order, against Manni who was believed to be laundering money for criminals while posing as a legitimate businessman. However, the case did not proceed to trial as an agreement was reached whereby he agreed to hand over assets worth some £9,802,828.
The NCA was pretty pleased with this, Andy Lewis, head of civil recovery at the NCA, saying:
Mansoor Hussain thought he had hidden the criminality associated with the source of his property empire, but he didn’t count on our tenacity.
Far from taking his UWO response at face value, we studied what he had and hadn’t divulged. We could then use that information to look far enough back to uncover the hidden skeletons in his financial closet.
Ultimately the wealth of evidence, in this case, has led to a settlement which not only meets our operational goals, but frees up our investigators and legal team to pursue other cases.
Reports in the Law Society Gazette are more measured, pointing out that this is the first time a UWO has been obtained solely on an individual’s alleged involvement in serious organised crime.
Robert Amaee, director and founder of Amaee law and former head of anti-corruption at the Serious Fraud Office, said the NCA will be ‘relieved’ to have its first successful recovery under the new regime.
The case highlights the value of UWOs as an information gathering and investigative tool and the perils of a suspect entering the process unrepresented, but sets little by way of legal precedent that can assist the NCA in properly contested cases. While many will see this as a step in the right direction, the NCA still has a long way to go to fulfil any of the early, and perhaps unrealistically high expectations for the UWO regime.
Rachel Cook, senior associate at Peters & Peters Solicitors LLP, added:
The NCA has recovered a substantial amount of money (without a criminal prosecution) and acted to prevent future criminal conduct. Other ostensibly “clean” individuals who are operating as launderers will no doubt be concerned by this latest development. The possibilities for disrupting serious criminal activity in the UK through the use of UWOs should not be underestimated.’
This win may inform the NCA’s future strategy and who they target for UWOs, focusing on UK general crime rather than overseas individuals linked to foreign regimes.
A note at the bottom of the article adds that Manni avoided criminal prosecution for alleged money laundering and (or more likely because) the NCA were unable to mount a case in the criminal courts ‘to the necessary standard of proof’.
One can’t help wondering what else Manni had up his sleeve if he was willing to hand over £10 million worth of assets in circumstances where the NCA were unable to prosecute.
Still, hopefully, this case will worry some of the crooks. Or will it?
Huge gaps in anti-money laundering procedures?
Another article suggests that many companies may not be carrying out adequate anti-money laundering (AML) checks properly. These are supposed to be carried out by agents on both the buyers and sellers of properties. But is this being done?
Martin Cheek, managing director at anti-money laundering experts SmartSearch, has said:
The case of Mansoor Mahmood Hussain, known as ‘Manni’, clearly demonstrates the huge gaps in protection against money laundering that exist in the property market, through which criminals are able to pour millions of pounds a year.
It also highlights, again, that while some may think financial crime is ‘victimless’ because it involves moving cash through property and banks, the reality is that it funds some of the despicable criminal activity in the country.
That just one man was able to amass such an amount of wealth through illicit property deals shows how widespread the problem is if you multiply that across the number of criminals involved in this activity across the country and the rest of the world.
But despite the threat from money laundering criminals being higher than ever before, the fact is it has never been simpler for companies to protect themselves and carry out the most basic checks, electronically, which would stop it at the front door.
So let’s hope that more checks will in future be carried out by those who are supposed to do them.
Flammable cladding issues taking too long to remedy
We are more than three years on from the Grenfell fire disaster, but there are still (according to the latest figures from the Ministry for Housing, Communities and Local Government), 300 buildings still with ACM cladding systems which need to be remediated.
Not to mention another 1,700 high-rise buildings with other forms of combustible cladding systems which need replacing.
Ed Mead, co-founder and director at Viewber, has called on the government to requisition any building that the owner will not make safe by investing the funds required to so, saying
Estimates to fix everything [relating to flammable cladding] are of the order of £4.4bn. This is paltry compared to the tens of billions being thrown at Covid and sorting the issue will guarantee work for years.
Lack of survyeors
It seems from a recent government report that all residential blocks over 18 metres are required to have a fire safety assessment on cladding, but a lack of suitably qualified professionals to do the surveys is showing things down.
This is leaving flat owners unable to sell their property or remortgage to avoid existing mortgage lending reverting to more expensive standard variable rate products. Many with perfectly safe buildings, have been left out of pocket or stuck in a property that is no longer suitable for them, thus potentially reducing the level of housing stock that is on the market.
Mostly down, it seems, to this lack of professionals available to carry out the surveys.
Problems for student landlords
I spotted this article in Property Industry Eye reporting on a big problem for landlords who have traditionally provided accommodation on a ‘rent to rent’ basis for the University of Warwick. But who are now being told that their properties are no longer needed.
This is partly due to the coronavirus. However, the University has also been building is own accommodation, meaning that there will be less need for private sector rooms.
The article predicts that these landlords will be ill-equipped to manage their properties themselves having previously relied on the University to deal with things for them, and will be vulnerable to enforcement action by the Council.
The article points out that landlords in other university cities such as Manchester, have experienced similar problems. So if you are a student landlord, take note that difficult times may be coming your way.
- Boris Johnson’s 95% mortgages will put Britain back on course for a house price crash
- Conveyancing Standards Bill clears first hurdle in the Commons
- A third of private rented homes are sub-standard, claims Shelter
- Planning changes would drastically cut affordable homes, councils say
- Tenant loan scheme goes live in Wales
- Petition launched to allow evictions after two weeks’ rent arrears
- Mandatory landlord register demanded by Generation Rent activists
- RIBA welcomes minimum space standards for all permitted development homes
- Estate agents face mandatory referral fee transparency rules following shock report
- Landlords lose out as buy to let may be changed forever
Newsround will be back next week.