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Prove It or Lose It: Lost It! NCA Uses New Powers to Freeze Accounts and Secure Substantial Asset Forfeiture

On 7 February 2019, the UK’s National Crime Agency (NCA) confirmed that it had obtained account forfeiture orders over money held in bank accounts in the name of the former Moldovan prime minister’s son, Vlad Luca Filat.

Part III of our ‘Prove It or Lose It’ series anticipated the use of these draconian new powers of UK law enforcement authorities to obtain orders to freeze bank accounts and to apply for the forfeiture of money held in those accounts, where there are reasonable grounds to suspect that the money constitutes recoverable property. These powers, which lack historically enshrined safeguards, were introduced as part of the Criminal Finances Act 2017, which substantially amends the Proceeds of Crime Act 2002.

Until now, these new powers had been given little publicity, although we predict the controversial new account freezing and forfeiture powers will be widely used. The order against Mr. Filat is a high-profile example of the NCA’s intentions and has attracted a considerable amount of media attention.

Freezing orders over the accounts of Mr Filat were obtained in May 2018 after the NCA became suspicious that the funds held in the accounts were derived from the illegal activity of his father, who is currently serving a nine-year prison sentence after being convicted in June 2016 for his part in the disappearance of $1 billion from three Moldovan banks.

Following the grant of a freezing order, the City of London Magistrates Court (a lower, mostly criminal court) granted an order requiring the forfeiture of £466,321.72 held in the accounts of Mr. Filat. In making the order, District Judge Michael Snow remarked, ‘I am satisfied on the balance of probabilities that the cash was derived from his father’s criminal conduct in Moldova’.

It is not clear to what extent Mr. Filat, a 22-year-old student who reportedly paid £390,000 in rent up-front for a Knightsbridge apartment, contested the proceedings. He has 30 days from the date the order was made to appeal to the Crown Court.

Capitalising on the resultant fanfare, the NCA released a two-minute video outlining and explaining its powers to obtain unexplained wealth orders and account freezing orders as well as new powers allowing the agency to seize and apply for the forfeiture of certain ‘listed assets’ including precious metals and stones, watches, artistic works, face value vouchers, and postage stamps.

The Filat case and the NCA’s publicity push is a reminder that the authorities are intent on using the new powers available to them. Anyone who finds themselves subject to such proceedings should seek legal advice immediately.

©2019 Greenberg Traurig, LLP. All rights reserved.

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About this Author

Shareholder

Anne-Marie Ottaway focuses on white collar and economic crime and government and internal investigations. Acknowledged for her criminal defence work, Anne-Marie provides clients with advice on all aspects of investigations relating to allegations of fraud, bribery, and corruption, as well as providing advice in respect of the implementation of effective anti-fraud, bribery and corruption compliance programmes and related anti-money laundering issues. She is recognized by Chambers & Partners for her “growing reputation for defending corporate clients subject to fraud and...

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Barry Vitou, shareholder, London, UK, United Kingdom, Greenberg Traurig, white collar defense, special investigations, law enforcement
Shareholder

Barry Vitou focuses his practice on white collar defense and special investigations, advising corporates and individuals in connection with compliance, pre-investigations, investigations, and prosecutions conducted by numerous law enforcement agencies. Barry frequently represents clients under investigation by U.K. and U.S. law enforcement agencies and prosecutors, including the U.K.’s Serious Fraud Office (SFO), the Financial Conduct Authority, the Information Commissioner’s Office, the U.S. Department of Justice (DOJ), and the U.S. Securities and Exchange Commission (SEC). Barry regularly appears on television and radio, discussing the topics of corruption, money laundering, and the UK Bribery Act.

Barry counsels clients on law enforcement investigations all over the world including the European Union, Russia, and the British Overseas Territories. He also conducts internal investigations around the world and handles self-reporting actions. Barry has conducted compliance advisory mandates and global money laundering investigations for clients in numerous jurisdictions.

Experience

  • Representing a corporation under investigation by the Serious Fraud Office linked with the ongoing DOJ and SEC investigation into Unaoil bribery allegations. °

  • Representing a corporation in the first challenge (Judicial Review) of the Serious Fraud Office Section 2 (equivalent to US subpoena) powers to compel documents and information from parties outside the UK in respect of documents held outside the UK. °

  • Represented corporation in the infrastructure sector on the first failure to prevent bribery prosecution following claims of non-cooperation by the SFO and the refusal of the SFO to offer a Deferred Prosecution Agreement (DPA). Resolved matter in under a year. The case was successfully disposed of with a lower penalty and less onerous penalty than the preceding DPA. The case threw into sharp relief the lack of incentive, in certain circumstances, of entering into a DPA to dispose of a criminal offence and sparked a debate into the DPA ‘offer’ and further discounts in DPA’s which followed. °

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Gareth Hall London Investigations Attorney NCA HMRC
Associate

Gareth Hall has a range of experience representing clients throughout special investigations and criminal litigation. He has represented individuals subject to investigations conducted by the National Crime Agency (NCA), Her Majesty’s Revenue and Customs (HMRC) and the Serious Fraud Office (SFO) for a range of matters including complex conspiracies, fraud, money laundering, and bribery. Gareth also has higher rights of audience and has appeared as an advocate, representing individuals in the Crown Court.

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